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Terminology
Here Are Some Helpful Terms Used Throughout The Real Estate,
Mortgage, and Title Processes.
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Fair Credit Reporting Act |
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A consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one's credit record. |
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Fair Housing Act |
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Prohibits discrimination in housing sales or loans on the basis of race, religion, color, national origin, sex, familial status, or handicap. Your Rights under the Fair Housing Act. |
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Fair Market Value |
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The highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept. |
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Fannie Mae's Community Home Buyer's Program |
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An income-based community lending model, under which mortgage insurers and Fannie Mae offer flexible underwriting guidelines to increase a low- or moderate-income family's buying power and to decrease the total amount of cash needed to purchase a home. Borrowers who participate in this model are required to attend pre-purchase home-buyer education sessions. |
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Federal Home Loan Mortgage Corporation (FHLMC, Freddie Mac) |
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A stockholder-owned corporation chartered by Congress to create a continuous flow of funds to mortgage lenders in support of homeownership and rental housing. Freddie Mac purchases single-family and multifamily residential mortgages from lenders and packages them into securities that are sold to investors. |
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Federal Housing Administration (FHA) |
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A part of the U.S. Department of Housing and Urban Development (HUD). FHA assists 1st-time home buyers and low to moderate income borrowers who may not be able to meet down payment requirements for conventional loans by providing mortgage insurance to private lenders. It also insures loans for home improvements and buying manufactured/mobile homes. These programs operate through FHA approved lending institutions and their correspondents, such as Allegiance mortgage. |
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Federal National Mortgage Association (FNMA, Fannie Mae) |
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A stockholder-owned federally chartered corporation. Fannie Mae purchases residential home loans from mortgage lending institutions, packages the mortgages into securities and sells the securities to investors. They are the largest source of residential mortgage funds in the USA. |
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Fee Simple |
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The greatest possible interest a person can have in real estate. |
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Fee Simple Estate |
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An unconditional, unlimited estate of inheritance that represents the greatest estate and most extensive interest in land that can be enjoyed. It is of perpetual duration. When the real estate is in a condominium project, the unit owner is the exclusive owner only of the air space within his or her portion of the building (the unit) and is an owner in common with respect to the land and other common portions of the property. |
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FHA Loan |
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A loan insured by the Federal Housing Administration open to all qualified home purchasers. Interest rates on FHA loans are generally market rates, while down payment requirements are lower than for conventional loans. FHA loans cannot exceed the statutory limit. |
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FHA Mortgage |
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A mortgage that is insured by the Federal Housing Administration (FHA). Along with VA loans, an FHA loan will often be referred to as a government loan. |
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Filing Fees |
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The amount charged by public officials in your area for recording your mortgage and other documents. |
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Finance Charge |
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Your finance charge is the total of all the interest you would pay over the entire life of the loan, assuming you kept the loan to maturity, as well as all prepaid finance charges. If you pre-pay any principal during your loan, your monthly payments remain the same, but your total finance charge will be reduced. |
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Firm Commitment |
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A lender's agreement to make a loan to a specific borrower on a specific property. |
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First Mortgage |
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A mortgage that has priority as a lien over all other mortgages. |
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Fixed Rate Mortgages |
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Fixed Rate Mortgages are mortgages on which the same rate of interest is charged for the life of the loan. |
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Fixed-Rate Mortgage |
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A mortgage in which the interest rate does not change during the entire term of the loan. |
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Fixture |
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Personal property that becomes real property when attached in a permanent manner to real estate. |
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Float |
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Until you request to secure a lender's quoted interest rate, the interest rate will continue to change, or float, due to market fluctuations. Locking or securing a rate protects you from these potential fluctuations from the time your lock is confirmed to the day your lock period expires. You may choose to float your rate up until the time your lender contacts you to schedule your closing. At this time, an interest rate must be secured in order to prepare your closing documents. |
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Flood Certification Fee |
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Federal law requires that you obtain flood hazard insurance if your property lies in a flood zone. As part of our evaluation of your property, we engage a flood determination company to tell us whether or not your house lies in a flood zone. The flood certification fee covers the cost. If your house is located in a flood zone, you will be required to purchase Flood Insurance. |
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Flood Insurance |
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Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated flood areas. |
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Flood Insurance |
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Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated flood areas. |
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Flood Life of Loan Coverage |
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Flood zone determinations may change from time to time. The "Life of Loan Coverage" fee allows us to track any changes in your property's flood zone status over the life of your loan. |
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Foreclosure |
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A legal term applied to any of the various methods of enforcing payment of the debt secured by a mortgage, by taking and selling the mortgaged property, and depriving the mortgagor of possession. |
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Foreclosure |
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The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt. |
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