Real Estate Terms and Definitions

HUD The U.S. Department of Housing and Urban Development; established in 1965, HUD works to create a decent home and suitable living environment for all Americans; it does this by addressing housing needs, improving and developing American communities, and enforcing fair housing laws. Balloon Mortgage A mortgage that typically offers low rates for an initial period of time (usually 5, 7, or 10) years; after that time period elapses, the balance is due or is refinanced by the borrower. Discount point Normally paid at closing and generally calculated to be equivalent to 1% of the total loan amount, discount points are paid to reduce the interest rate on a loan. PMI Private Mortgage Insurance; privately-owned companies that offer standard and special affordable mortgage insurance programs for qualified borrowers with down payments of less than 20% of a purchase price. Borrower A person who has been approved to receive a loan and is then obligated to repay it and any additional fees according to the loan terms. After Appraisal Part of the appraisal of a property from which only a portion of that property is acquired for the planned project. This type of acquisition is often referred to as a "partial acquisition." Default The inability to pay monthly mortgage payments in a timely manner or to otherwise meet the mortgage terms. Fixed-rate mortgage A mortgage with payments that remain the same throughout the life of the loan because the interest rate and other terms are fixed and do not change. HUD1 Statement Also known as the "settlement sheet," it itemizes all closing costs; must be given to the borrower at or before closing. Ginnie Mae Government National Mortgage Association (GNMA); a government-owned corporation overseen by the U.S. Department of Housing and Urban Development, Ginnie Mae pools FHA-insured and VA-guaranteed loans to back securities for private investment

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	Did You Know?
	Stopping foreclosure with Deed-in-lieu of foreclosure can be done This won't save your house, but it is not as damaging to your credit rating as a foreclosure. You can qualify if: you are in default and don't qualify for any of the other options,your attempts at selling the house before foreclosure were unsuccessful, and you don't have another FHA mortgage in default.