An adjustable-rate mortgage (ARM) with monthly payments that are sufficient to liquidate the remaining principal balance over the amortization term.
Fully Amortized ARM
FHLMC (Federal Home Loan Mortgage Corporation) One of the congressionally chartered, publicly owned companies that is the largest source of home mortgage funds.
Insurance that protects a homeowner from the cost of damages to a property due to flooding or high water. It is required by law that properties located in areas prone to flooding have flood insurance. The federal government determines whether an area is prone to flooding and considered to be in a flood plain.
An inspection to determine if a property is located in an area prone to flooding also known as a flood plain. The federal government determines whether an area is in a flood plain. Lenders generally rely on the flood certification to determine if flood insurance will be required in order to obtain a mortgage. For our comparison purposes, the cost of the flood certification is considered to be a third party fee.
Fixed Rate Mortgage
A mortgage in which the monthly principal and interest payments remain the same throughout the life of the loan. The most common mortgage terms are 30 and 15 years. With a 30-year fixed rate mortgage your monthly payments are lower than they would be on a 15 year fixed rate, but the 15 year loan allows you to repay your loan twice as fast and save more than half the total interest costs.
The monthly payment due on a mortgage loan which includes both principal and interest.
A mortgage that is the first loan recorded in the public record and generally the primary loan against a property.
A lending institution’s agreement to give a loan to a specific borrower on a specific property.
A fee paid to a mortgage broker for finding a mortgage for a potential borrower.
The total dollar amount credit will cost.
A mortgage insured by the Federal Housing Administration (FHA). FHA loans are also known as government mortgages.
FHA Co-insured Mortgage
A mortgage for which the Federal Housing Administration (FHA) and the originating lender share the risk of loss in the event of the borrower’s default.
Fee Simple Estate
An unconditional, unlimited estate of inheritance that represents the greatest possible interest in land that can be enjoyed.
Absolute ownership of real property; the greatest possible interest a person can have in real estate.
Federal Open Market Committee (FOMC)
Policy committee in the Federal Reserve System that sets short-term monetary policy objectives for the Fed. The committee is made up of the seven governors of the Federal Reserve Board, plus five of the 12 presidents of the Federal Reserve Banks.
Federal Housing Administration (FHA)
An area of the U.S. Department of Housing and Urban Development (HUD) that insures low downpayment mortgages granted by some lenders. The loan must meet the established guidelines of FHA in order to qualify for the insurance.
Federal Funds Rate
Interest rate charged by banks, with excess reserves at a Federal Reserve district bank, to banks needing overnight loans to meet reserve requirements. The federal funds rate is the most sensitive indicator of the direction of interest rates, since it is set daily by the market, unlike the prime rate and the discount rate, which are periodically changed by banks and by the Federal Reserve Board, respectively.
FNMA (Federal National Mortgage Association) One of the congressionally chartered, publicly owned companies that is the largest source of home mortgage funds.
Fair Market Value
The highest price that a willing, but not compelled, buyer would pay, and the lowest price that a willing, but not compelled, seller would accept.
Fair Credit Reporting Act
A federal consumer protection regulation that controls the disclosure of credit information and establishes procedures for correcting mistakes in your credit file.
Economic indicator that measures the total volume of orders placed with U.S. factories. Also includes inventory and order backlog components, which can offer insight into inflation and growth in the manufacturing sector. Frequency: monthly. Source: Commerce Department.
Face Interest Rate
The percentage interest rate that is shown on the actual loan note or document.