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home :: Mortgage Terms
Glossary F
Mortgage Terms Glossary
F
Fair Housing Act: a law that prohibits
discrimination in all facets of the homebuying process on the basis
of race, color, national origin, religion, sex, familial status, or
disability.
Fair market value: the hypothetical
price that a willing buyer and seller will agree upon when they are
acting freely, carefully, and with complete knowledge of the
situation.
Fannie Mae: Federal National Mortgage
Association (FNMA); a federally-chartered enterprise owned by
private stockholders that purchases residential mortgages and
converts them into securities for sale to investors; by purchasing
mortgages, Fannie Mae supplies funds that lenders may loan to
potential homebuyers.
FHA: Federal Housing Administration;
established in 1934 to advance homeownership opportunities for all
Americans; assists homebuyers by providing mortgage insurance to
lenders to cover most losses that may occur when a borrower
defaults; this encourages lenders to make loans to borrowers who
might not qualify for conventional mortgages.
Fifteen-year mortgage: a loan with a
term of 15 years. Although the monthly payment on a 15-year mortgage
is higher than that of a 30-year mortgage, the amount of interest
paid over the life of the loan is substantially less.
Fixed-rate mortgage: a mortgage with
payments that remain the same throughout the life of the loan
because the interest rate and other terms are fixed and do not
change.
Flood insurance: insurance that
protects homeowners against losses from a flood; if a home is
located in a flood plain, the lender will require flood insurance
before approving a loan.
Foreclosure: a legal process in which
mortgaged property is sold to pay the loan of the defaulting
borrower.
Freddie Mac: Federal Home Loan Mortgage
Corporation (FHLM); a federally-chartered corporation that purchases
residential mortgages, securitizes them, and sells them to
investors; this provides lenders With funds for new homebuyers.
Related
Topics:
First Time Home Buyer
Home Equity Lines of
Credit Get Out of Debt
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