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Glossary

Mortgage Terms Defined

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  • Fannie Mae
    A congressionally chartered, shareholder-owned company that is the nation's largest supplier of home mortgage funds.
  • Federal Home Loan Mortgage Corporation (FHLMC - Freddie Mac)
    Quasi-governmental agency that purchases conventional mortgages from insured depository institutions and HUD-approved mortgage bankers.
  • Federal Housing Administration
    A government agency, division of the Department of Housing and Urban Development (HUD), that insures residential mortgage loans made by private lenders and sets standards for underwriting mortgage loans.
  • Federal Reserve
    The central bank of the United States and major regulatory agency for many commercial banks.
  • Fee Simple
    Absolute ownership of a property.
  • FHA Mortgage
    A mortgage that is insured by the Federal Housing Administration (FHA). Also known as a government mortgage.
  • FICO Score
    FICO® scores are the most widely used credit score in U.S. mortgage loan underwriting. This 3-digit number, ranging from 300 to 850, is calculated by a mathematical equation that evaluates many types of information that are on your credit report. Higher FICO® scores represent lower credit(...)
  • First Mortgage
    The primary lien against a property.
  • Fixed Installment
    The monthly payment due on a mortgage loan including payment of both principal and interest.
  • Fixed Rate Mortgage (FRM)
    A mortgage interest that are fixed throughout the entire term of the loan.
  • Flood Insurance
    A form of hazard insurance required by lenders to cover properties in a flood zone.
  • Floor
    The minimum rate of interest payable on an adjustable-rate mortgage.
  • Forbearance
    Grace period given when a lender postpones foreclosure to give a borrower time to catch up on overdue payments.
  • Foreclosure-Reposession
    Legal process by which the lender forces the sale of a property because the borrower has not met the mortgage terms.
  • Freddie Mac
    See Federal Home Loan Corporation.
  • Full Amortized ARM
    An adjustable-rate mortgage (ARM) with a monthly payment that is sufficient to amortize the remaining balance, at the interest accrual rate, over the amortization term.
  • GNMA
    A government-owned corporation that assumed responsibility for the special assistance loan program formerly administered by Fannie Mae. Popularly known as Ginnie Mae.
  • Grace Period
    A period of time during which a loan payment may be made after its due date without incurring a late penalty.
  • Gross
    Before taxes.
  • Gross Income
    Total income before taxes and expenses are deducted.
  • Growing Equity Mortgage (GEM)
    A fixed-rate mortgage that provides scheduled payment increases over an established period of time. The increased amount of the monthly payment is applied directly toward reducing the remaining balance of the mortgage.
  • Guarantee
    To assume liability for another’s debts in the event of a default.
  • Guarantee Mortgage
    A mortgage that is guaranteed by a third party.
  • Hazard Insurance
    Protects the insured against loss due to fire or other natural disaster in exchange for a premium paid to the insurer.
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