Glossary of Mortgage Terms

A (14) | B (6) | C (19) | D (8) | E (6) | F (12) | G (5) | H (8) | I (7) | J (2) | K (1) | L (7) | M (12) | N (4) | O (2) | P (11) | Q (1) | R (8) | S (5) | T (8) | U (3) | V (3) | W (2) | Y (1) | Z (1)
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fair market value

The price a property can realistically sell for, based upon comparable selling prices of other properties in the same area.

Fannie Mae

Nickname for Federal National Mortgage Association (FNMA).

Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac)

A quasi-governmental, federally-sponsored organization that acts as a secondary market. investor to buy and sell mortgage loans. FHLMC sets many of the guidelines for conventional mortgage loans, as does FNMA.

Federal Housing Administration (FHA)

An agency within the Department of Housing and Urban Development that sets standards for underwriting and insures residential mortgage loans made by private lenders. One of FHA's objectives is to ensure affordable mortgages to those with low or moderate income. FHA loans may be high loan-to-value, and they are limited by loan amount. FHA mortgage insurance requires a fee of 1.5 percent of the loan amount to be paid at closing, as well as an annual fee of 0.5 percent of the loan amount added to each monthly payment.

Federal National Mortgage Association (FNMA or Fannie Mae)

A private corporation that acts as a secondary market. investor to buy and sell mortgage loans. FNMA sets many of the guidelines for conventional mortgage loans, as does FHLMC. The major purpose of this organization is to make mortgage money more affordable and more available.

fee simple

The maximum form of ownership, with the right to occupy a property and sell it to a buyer at any time. Upon the death of the owner, the property goes to the owner's designated heirs. Also known as fee absolute.

FHA

See: Federal Housing Administration.

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 whose rate remains constant throughout the life of the mortgage.

flood insurance

The Federal Flood Disaster Protection Act of 1973 requires that federally-regulated lenders determine if real estate to be used to secure a loan is located in a Specially Flood Hazard Area (SFHA). If the property is located in a SFHA area, the borrower must obtain and maintain flood insurance on the property. Most insurance agents can assist in obtaining flood insurance.

FNMA

See: Federal National Mortgage Association

Freddie Mac

Nickname for Federal Home Loan Mortgage Corporation (FHLMC).