Mortgage Glossary: F - O

 

• Glossary:
• A - E
• F - O
• P - Z

• Fannie Mae: The Federal National Mortgage Association (FNMA), a federally-chartered private corporation that deals in purchasing first mortgages.
• FHA: A division of the US Department of Housing and Urban Development (HUD), whose main activity insuring is residential mortgage loans made by private lenders. This helps to encourage lenders to approve loans to borrowers who might not otherwise be able to get a convential loan.
• Financial Index: A number that is used in determining the interest rate changes on Adjustable Rate Mortgages.
• Fixed-Rate Mortgages: A mortgage that has an interest rate that does not change throughout the life of the loan.
• Freddie Mac: Federal Home Loan Mortgage Corporation (FHLMC), a corporation chartered by Congress in 1970, whose purpose is to purchase mortgages in the secondary mortgage market.
• Ginnie Mae: Government National Mortgage Association (GNMA), is a government owned agency within HUD. The agency buys mortgages and pools them together to form securities that are then sold to investors. This helps to provide funding that can be lent eligible borrowers.
• Grant: Financial assistance awarded by a government agency or private organization, usually based on either merit or need, that does not need to be repaid.
• Guarantee Mortgage: A loan that is guarunteed by a third party. If the original borrower defaults on the loan then repayment falls to the guarantor.
• HUD: The Department of Housing and Urban Development, the US government agency responsible for administering FHA, GNMA and other housing programs.
• Interest: The amount of money charged by the lender for the actual loan, usually expressed in a percentage of the total amount borrowed.
• Loan: Money that is borrowed and must at some point be repaid.
• Market Conditions: Factors that can affect the purchase price of a home, or the interest rate available on mortgages.
• Market Rate: The current average rate that is being charged by lending institutions for conventional, fixed-rate loans.
• Market Trends: Market trends are described as periods when buyers consistently outnumber sellers, or vice versa.
• Market Value: The price that a piece of property sells for at a particular point in time, and thus establishes it's worth or current value.
• Mortgage: This is a legal agreement when property is used as collateral to guarantee payment of a debt, which specifies a certain amount of money to purchase a home at a certain interest rate.
• Mortgage Insurance: Required by lenders, it is a special type of loan insurance to protect them from a possible default. All conventional loans with less than a 20 percent down payments require private mortgage insurance, or PMI.
• Origination Fee: Is a fee charged by most lenders to process a loan. These are also called points. A point is one percent of the total loan amount.