Glossary of Mortgage Terms

An FHA-approved condo is a condo unit or project that meets the Federal Housing Administration's safety, financial, and legal standards. This means that it can get FHA-insured mortgage financing.

A fiduciary duty in real estate is a legal obligation that requires your agent to act in your best interest, putting your needs above their own throughout the home buying or selling process.

A first-lien HELOC is a home equity line of credit that takes the place of your main mortgage. It lets you borrow money against your home equity in the first lien position.

A fixture in real estate is a piece of personal property that is permanently attached to a home or piece of land and goes with the property when it is sold.

A float down option is a provision some lenders include with a rate lock agreement that allows you to change to a lower interest rate if market rates fall before you close on your mortgage.

Foreclosure is a legal process in which a mortgage lender takes ownership of a property after the borrower fails to make the required loan payments. This usually means that the home is sold at public auction.

Freddie Mac, officially the Federal Home Loan Mortgage Corporation (FHLMC), is a government-sponsored enterprise that buys mortgages from lenders and sells them as investments to keep home loan money flowing nationwide.

A gated community is a residential neighborhood enclosed by walls or fences with controlled entry points, designed to give residents more privacy, security, and access to shared amenities.

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 The GFE has been replaced by the Loan Estimate.