FHA Loan and Mortgage Glossary - Terms Beginning with 'G'
- Good Faith Estimate: This is an estimate of charges that is given to a borrower from a mortgage lender that represents their expectations for the loan terms based on the financial information, credit information, and the lender information that they have received at that point in time. This is only an estimate and may change by the time the loan closes.
- Graduated Payment Mortgage: This is a type of mortgage where the payments start out low, then gradually increase over time to a specific point where they level off and stay the same again. At the beginning of this loan the payments are so low that negative amortization occurs and that amount of interest is added on to the total principal of the loan to be paid later when the payment amounts increase. This type of loan is good for people who know their income will significantly increase in the near future.
- Guarantee: This is a promise to fulfill an obligation for another party in the case that that party does not fulfill the obligation on their own. For instance, the FHA and VA offer home loan mortgage guarantees that offer a type of warranty to the lender that if the borrower does not fulfill their obligation to pay that they will give a specified amount of that loan back to the lender.