Ark Mortgage Inc. Glossary of Terms

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.

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.

FHA Coinsured Mortgage

A mortgage that is insured by the Federal Housing Administration (FHA). Also known as a government mortgage.

FHA Mortgage

A fee or commission paid to a Loan Officer for finding a mortgage loan for a prospective borrower.

Finder's Fee

A lender’s agreement to make a loan to a specific borrower on a specific property.

Firm Commitment

A mortgage that is the primary lien against a property.

First Mortgage

The monthly payment due on a mortgage loan. The fixed installment includes payment of both principal and interest.

Fixed Installment

A mortgage in which the interest rate does not change during the entire term of the loan.

Fixed-Rate Mortgage (FRM)

Personal property that becomes real property when attached in a permanent manner to real estate.

Fixture

Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated flood areas.

Flood Insurance

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.

Foreclosure

The loss of money, property, rights, or privileges due to a breach of legal obligation.

Forfeiture

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.

401(K)/403(B)

Fee Simple Estate

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