Page 81 - Book6E

Equity: the difference between the fair market value of the home and the outstanding balance on your mortgage plus any outstanding home equity loans.
Federal Housing Administration (FHA): a government agency created as part of the National Housing Act of 1934 to insure loans made by banks and other private lenders for home building and home buying.
FICO: an abbreviation for Fair Isaac and Company, the company that developed the method used by most lending institutions to
calculate your score.
Fixed Rate Mortgage (FRM): the interest rate you are charged stays the same for the length of the loan. This ensures that your monthly loan payment also stays the same.
Floor: the minimum interest rate of an ARM loan. This prevents an ARM loan from ever adjusting lower than the Start Rate.
Foreclosure: the right of the lender to foreclose, repossess, or seize the property if the mortgage contract is broken.
Fully Indexed Rate: the cost of the fixed-rate mortgage is calculated by adding the Index (Prime Rate) + Margin. This determines the interest rate of your loan for the life of the loan.
Grace Period: a credit card's grace period is the time you have to pay the balance, before you are charged interest. Grace periods usually range from 10 to 55 days.
Home Equity Loan: a loan in which a borrower uses the equity in his or her home as collateral for securing the loan. This creates a lien on the borrower’s home.
Hybrid ARM: a hybrid of a fixed-rate period and an adjustable-rate period. The interest rate is fixed for the first several years of the loan; after that, the rate could adjust annually.
Glossary 73