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Fair Credit Reporting Act: A consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one's credit record.
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Fair market value (FMV): The price at which a property would change hands between a seller and a buyer, neither having to sell or buy, and both having reasonable knowledge of all relevant facts.
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Family limited partnership: A form of partnership where a family’s assets are pooled into one family owned partnership in which each partner owns an interest. Shares can be gifted to family members to take advantage of the annual gift tax exclusion.
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Fannie Mae: Fannie Mae is a New York Stock Exchange company and the largest non-bank financial services company in the world. It operates pursuant to a federal charter and is the nation's largest source of financing for home mortgages. Over the past 30 years, Fannie Mae has provided nearly $2.5 trillion of mortgage financing for over 30 million families.
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Federal Housing Administration (FHA): An agency of the U.S. Department of Housing and Urban Development (HUD). Its main activity is the insuring of residential mortgage loans made by private lenders. The FHA sets standards for construction and underwriting but does not lend money or plan or construct housing.
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Fee simple: Standing alone these words create an absolute estate in the person to whom property is given. These words may be followed by a condition or special limitation on the estate.
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Fee simple estate: An unconditional, unlimited estate of inheritance that represents the greatest estate and most extensive interest in land that can be enjoyed. It is of perpetual duration. When the real estate is in a condominium project, the unit owner is the exclusive owner only of the air space within his or her portion of the building (the unit) and is an owner in common with respect to the land and other common portions of the property.
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FHA coinsured mortgage: A mortgage (under FHA Section 244) for which the Federal Housing Administration (FHA) and the originating lender share the risk of loss in the event of the mortgagor's default.
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FHA mortgage: A mortgage that is insured by the Federal Housing Administration (FHA). Also known as a government mortgage.
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Financing: Rolling the costs of getting your loan (originator fees, closing costs, and so on) into the total loan balance in order to pay these extra costs along with your loan repayment.
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Finder's fee: A fee or commission paid to a mortgage broker for finding a mortgage loan for a prospective borrower.
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Firm commitment: A lender’s agreement to make a loan to a specific borrower on a specific property.
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First mortgage: A mortgage that is the primary lien against a property.
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Fixed installment: The monthly payment due on a mortgage loan. The fixed installment includes payment of both principal and interest.
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Fixed-rate mortgage (FRM): A mortgage in which the interest rate does not change during the entire term of the loan.
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Fixture: A thing which has been so permanently attached to real property that it is regarded as part of the real property. An example is a furnace affixed to a house.
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Flood insurance: Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated flood areas.
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Foreclosure: The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.
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Forfeiture: The loss of money, property, rights, or privileges due to a breach of legal obligation.
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401(k)/403(b): An employer-sponsored investment plan that allows individuals to set aside tax-deferred income for retirement or emergency purposes. 401(k) plans are provided by employers that are private corporations. 403(b) plans are provided by employers that are not for profit organizations.
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401(k)/403(b) loan: Some administrators of 401(k)/403(b) plans allow for loans against the monies you have accumulated in these plans -- monies must be repaid to avoid serious penalty charges.
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fully amortized ARM: An adjustable-rate mortgage (ARM) with a monthly payment that is sufficient to amortize the remaining balance, at the interest accrual rate, over the amortization term.