Glossary

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F-J


Fair Credit Reporting Act (FCRA?) Freddie Mac HUD
Fannie Mae Gift HUD-1 Uniform Settlement Statement
Federal Housing Administration (FHA) Good-Faith-Estimate Index
Fee Simple Gross Income Initial Interest Rate
First Mortgage Hazard Insurance Interest Rate
First time homebuyer Home Equity Line of Credit Interest Rate Cap
Fixed Rate Mortgage Home Equity Loan Joint Liability
Float Homeowners association Joint Tenancy
Flood Insurance Homeowners association dues Jumbo Loan
Foreclosure Homeowners Insurance

Fair Credit Reporting Act (FCRA?)
A consumer protection law that regulates the disclosure and use of consumer credit information by consumer and credit reporting agencies. Also established procedures to dispute the accuracy or completeness of any information contained in your credit report file. Any dispute that results from a decision made in whole or in part of review of your credit history requires the credit reporting agency that prepared the report to investigate free of charge and notify you of the investigation results.
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Fannie Mae
One of two Federal agencies that purchase home loans from lenders. (The other is Freddie Mac). Both agencies finance their purchases primarily by packaging mortgages into pools, then issuing securities against the pools. The securities are guaranteed by the agencies. They also raise funds by selling notes and other liabilities. Because of their massive size, the agencies have had a major influence on the evolution of underwriting practices.
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Federal Housing Administration (FHA)
An agency of the U.S. Department of Housing and Urban Development (HUD). Its main activity is the insuring of residential mortgage loans made by private lenders. The FHA sets standards for construction and loan underwriting but does not lend money, plan or construct housing.
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Fee Simple
An unconditional, unlimited estate of inheritance that represents the greatest estate and most extensive interest in land possible. It is of everlasting duration.
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First Mortgage
Often referred to as primary mortgage. This is the main mortgage against a property.
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First time homebuyer
Generally, you would be considered a first time homebuyer if you have never owned a home, or, if you not owned a home in 3 years or more.
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Fixed Rate Mortgage
A mortgage in which the interest rate does not change during the entire term of the loan.
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Float
Interest rate and points that are subject to change prior to the loan closing date or the borrower electing to lock in the interest rate and points. The principal and interest (P&I) payment will continue to adjust, either up or down until the interest rate and points have been locked.
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Flood Insurance
A form of hazard insurance required by lenders to cover properties that are located in federally designated flood zones.
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Foreclosure
The legal process that a borrower in default under a mortgage, is deprived of their interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale applied to the mortgage debt.
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Freddie Mac
One of two Federal agencies that purchase home loans from lenders. (The other is Fannie Mae). Both agencies finance their purchases primarily by packaging mortgages into pools, then issuing securities against the pools. The securities are guaranteed by the agencies. They also raise funds by selling notes and other liabilities. Because of their massive size, the agencies have had a major influence on the evolution of underwriting practices.
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Gift
Money that you expect to receive as a gift that can be used in qualifying you for the loan or that you will use as part of your down payment.
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Good-Faith-Estimate
A document provided by the lender to the consumer that is required by the Real Estate Settlement Procedures Act (RESPA) and the U.S. Department of Housing and Urban Development (HUD). It discloses an estimate of the settlement charges you are likely to incur at or before closing. This disclosure has estimated costs that may be different from the actual costs due at closing/settlement. The Good Faith Estimate also identifies the relationship that the lender may have with vendors that will provide settlement services for which the consumer will be required to pay.
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Gross Income
The total income before taxes and/or expenses are deducted.
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Hazard Insurance
Refer to Homeowners Insurance.
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Home Equity Line of Credit
Also referred to as Equity Line of Credit (HELOC). This loan is a line of credit that is typically based upon the available equity of the property taking into account the first mortgage lien. A maximum credit line is usually determined, with the homeowner being able to use the funds as desired, operating much like that of a credit card.
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Home Equity Loan
Also referred to as Equity Loan. A closed-end loan secured by real estate. A home equity loan typically is the second mortgage lien on a property.
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Homeowners association
A non-profit association that manages the common areas of a planned unit development (PUD) or condominium project. In a condominium project, it has no ownership interest in the common elements. In a PUD project, it holds title to the common elements.
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Homeowners association dues
Monthly fees associated with owning a condominium or living in a planned unit development (PUD). These fees can cover building and property maintenance, trash removal services, cost of landscaping public areas, homeowners/hazard insurance, and other fees.
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Homeowners Insurance
Also referred to as Hazard Insurance. Insurance coverage that compensates the consumer for physical damage to a property from fire, wind, vandalism, or other hazards. The policy typically combines personal liability insurance and property hazard insurance coverage for a dwelling and its contents.
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HUD
U.S. government agency established to implement federal housing and community development programs; oversees the Federal Housing Administration (FHA).
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HUD-1 Uniform Settlement Statement
Also referred to as the closing statement. A closing document that provides an itemized listing of the funds that are payable at settlement. Items that appear on the statement include real estate commissions, loan fees, points, and initial escrow amounts. The totals at the bottom of the HUD-1 statement define the seller's net proceeds and the buyer's net payment at settlement. The form for the statement is mandated by the Real Estate Settlement Procedures Act (RESPA) and the U.S. Department of Housing and Urban Development (HUD).
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Index
A published interest rate to which the interest rate on an Adjustable Rate Mortgage loan (ARM) is tied. Some commonly used indices include the 1 Year Treasury Bill, 6 Month LIBOR, and the 11th District Cost of Funds (COFI). A margin is generally added to the index to determine the interest rate adjustments on the ARM, subject to any applicable limits, such as rate caps on interest rate changes.
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Initial Interest Rate
The original interest rate of an Adjustable Rate Mortgage (ARM) loan at the time of settlement. This rate will change according to the specific ARM loan schedule. See Adjustment Period.
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Interest Rate
An annual rate charged the borrower for the use of credit.
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Interest Rate Cap
A safeguard built into Adjustable Rate Mortgage (ARM) loans to prevent drastic changes in interest rates.
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Joint Liability
Liability shared among two or more people, each of whom is liable for the full amount of the debt.
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Joint Tenancy
A form of property co-ownership that gives each tenant equal undivided interest and rights in the property, including the right of survivorship.
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Jumbo Loan
A mortgage larger than the maximum eligible for purchase by the two Federal agencies, Fannie Mae and Freddie Mac.
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