E – F

Earnest Money
Money given by a buyer to a seller as part of the purchase price to bind a transaction or assure payment.
Equal Credit Opportunity Act
A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status or receipt of income from public assistance programs.
Equipment Financing / Equipment Loan
Equipment financing is the practice of extending capital to a business for the purchase of equipment.
Equity
The difference between the fair market value of an asset (like a home) and the amount of debt against that asset (like a mortgage balance).
Escrow
A neutral third party that carries out the instructions of both the buyer and seller in a real estate transaction.
Fair Market Value
The amount an article (such as property or an automobile) would sell for on the open market, barring any constraints such as a need to sell or buy quickly. The fair market value for real estate is often determined by examining the range of selling prices for similar homes in the current economic climate.
Fannie Mae
Fannie Mae is the larger of two government-sponsored enterprises (GSEs) created by Congress. (The smaller one is Freddie Mac.) It purchases and sells residential mortgages that conform to the guidelines it has established. For this reason, loans bought and sold by Fannie Mae are called “conforming” mortgages. Fannie Mae is also referred to as Federal National Mortgage Association.
Federal Collection Policy Notice
Notice to VA home loan borrowers of actions the government can take in the event that they default on their VA-backed home loans. These include but are not limited to confiscating tax refunds and retirement benefits.
Federal Funds Rate
The federal funds rate is extremely important to the U.S. economy because it is the interest rate that commercial banks, also called depository institutions, charge to other lending institutions who are taking out short-term loans, usually overnight.
FHA Definition
FHA stands for Federal Housing Administration. The FHA is a U.S. government agency that offers insurance to lenders who provide loans to home buyers. Since Congress created the FHA in 1934, it has enabled millions of home buyers to purchase homes when they might not have qualified otherwise. They are a self-funding department, which means not only do they benefit mortgage loan borrowers, but they don’t cost American taxpayers money either.
FHA Down Payment
An FHA loan requires a 3.5 percent down payment on the purchase price of the loan.
FHA Loan Limit
The FHA loan limit is the maximum loan amount you can get for an FHA loan, which varies depending on the area you live in.
FHA Mortgage Insurance
FHA mortgage insurance protects lenders from losses in the event that borrowers default on their FHA mortgages. Without FHA insurance coverage, few lenders would be willing to fund home loans with minimal down payments to borrowers with low-to-moderate incomes or past credit problems.
FHA Upfront MIP
MIP stands for mortgage insurance premium and is required to close an FHA loan. It is paid as an upfront cost and as an annual premium.
Finance Charge
The total cost of credit for a mortgage. This is shown on the Truth-in-Lending disclosure, or TIL. This is a dollar amount and includes all charges associated with a home purchase that would not be incurred if the home buyer paid cash.
Fixed Rate Mortgage
A category of mortgage characterized by an interest rate that does not change over the life of the loan.
Foreclosure
A legal remedy for non-payment of a mortgage debt. The lender takes and sells the property to cover amounts owed. Any remaining proceeds are returned to the borrower.

Leave a Comment

Your email address will not be published. Required fields are marked *

Back to Top