Glossary of Mortgage Terms

A gift of equity is when a property seller sells a home for less than its appraised market value so that the buyer, usually a family member, can use the difference to help pay for the home.

Before closing, lenders used to give borrowers a Good Faith Estimate (GFE), which used to be a standard way to show them the estimated costs, fees, and terms of a mortgage loan. The GFE has been replaced by the Loan Estimate.

The gross rent multiplier (GRM) is a simple ratio that shows how much an investment property costs compared to how much money it makes in rent each year. This is a quick way to see how one property compares to another.