Mortgage Glossary
There are a lot of unfamiliar terms that get tossed around during the mortgage process. But don't worry, we've put together this glossary to help you get a better grasp of any terms that may be less than clear.
F
Façade
The front outside wall of a building.
Face Interest Rate
The percentage interest rate that is shown on the actual loan note or document.
Factory Orders
Economic indicator that measures the total volume of orders placed with U.S. factories. Also includes inventory and order backlog components, which can offer insight into inflation and growth in the manufacturing sector. Frequency: monthly. Source: Commerce Department.
Fair Credit Reporting Act
A federal consumer protection regulation that controls the disclosure of credit information and establishes procedures for correcting mistakes in your credit file.
Fair Market Rent
The amount that a property would command if it were currently available to rent or lease.
Fair Market Value
The highest price that a willing, but not compelled, buyer would pay, and the lowest price that a willing, but not compelled, seller would accept.
Fannie Mae
FNMA (Federal National Mortgage Association) One of the congressionally chartered, publicly owned companies that is the largest source of home mortgage funds.
Federal Funds Rate
Interest rate charged by banks, with excess reserves at a Federal Reserve district bank, to banks needing overnight loans to meet reserve requirements. The federal funds rate is the most sensitive indicator of the direction of interest rates, since it is set daily by the market, unlike the prime rate and the discount rate, which are periodically changed by banks and by the Federal Reserve Board, respectively.
Federal Housing Administration (FHA)
An area of the U.S. Department of Housing and Urban Development (HUD) that insures low downpayment mortgages granted by some lenders. The loan must meet the established guidelines of FHA in order to qualify for the insurance.
Federal Open Market Committee (FOMC)
Policy committee in the Federal Reserve System that sets short-term monetary policy objectives for the Fed. The committee is made up of the seven governors of the Federal Reserve Board, plus five of the 12 presidents of the Federal Reserve Banks.
Fee Simple
Absolute ownership of real property; the greatest possible interest a person can have in real estate.
Fee Simple Estate
An unconditional, unlimited estate of inheritance that represents the greatest possible interest in land that can be enjoyed.
FHA Co-insured Mortgage
A mortgage for which the Federal Housing Administration (FHA) and the originating lender share the risk of loss in the event of the borrower’s default.
FHA Mortgage
A mortgage insured by the Federal Housing Administration (FHA). FHA loans are also known as government mortgages.
Finance Charge
The total dollar amount credit will cost.