FHA Loan and Mortgage Glossary - Terms Beginning with 'F'
- Fair Credit Reporting Act: This is a Federal Law that protects consumers from fraud and incorrect information damaging their credit history, credit score, and credit report. It also established certain procedures for credit reporting agencies for garnishing information for inquiring companies and individuals.
- Fair Market Value: The amount a home could be sold for at the current market value based on the real estate market, the amount other similar homes in the area have sold for recently, and the price which the buyer and seller agree on.
- Fannie Mae: This is a company that was charted by the U.S. Government and offers the most funds for home mortgages.
- Farmers Home Administration: this organization offers home loans to farmers who can not get conventional loans based on income, employment, and other qualifications.
- Federal Housing Administration: Also know as the FHA. This is part of the U.S. Department of Housing and Urban Development, also known as HUD, which offers home loan guarantee programs to buyers. Those people who are interested in an FHA home loan need to apply with and FHA approved lender and follow the guidelines. The FHA will guarantee a portion of the loan so that it is easier to qualify for a loan for the borrower.
- Finder's Fee: This a fee paid to a mortgage broker for the service of their finding a mortgage for a borrower.
- First Adjustment: This is when the first interest rate increase occurs on adjustable rate mortgage loans.
- First Mortgage: This is the primary or first lien holder on a property. The first mortgage lien holder always takes precedence over all other liens on the property when it is sold or foreclosed.
- Fixed Rate Mortgage: This is the most widely used type of mortgage because it allows for the borrower to keep a constant and steady payment for the life of their home loan. This type of mortgage has a fixed interest rate for the entire term of the loan.
- Flood Insurance: Most average homeowners insurance does not cover floods. This type of insurance covers flood damage to a property and is required by lenders if your home is located in a Federal flood area of the country.
- Foreclosure: This is action taken by the lender when a borrower stops making their home loan payments and does not contact or is not willing to receive communications from their lender. Foreclosures are court proceedings that strip the borrower of their rights to the property as a result of breaking the legally binding mortgage loan contract.
- Freddie Mac: This is a company commissioned by the Federal Government to purchase conventional mortgage loans from lenders in order to provide a secondary market for home loans.