Archive for the ‘financial’ Category

Preparing for Home Ownership

March 15, 2010

1. Decide what you can afford. Generally, you can afford a home equal in value to between two and three times your gross income.

2. Develop your home wish list. Then, prioritize the features on your list.

 3. Select where you want to live. Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, and safety.

 4. Start saving. Do you have enough money saved to qualify for a mortgage and cover your down payment? Ideally, you should have 20 percent of the purchase price saved as a down payment. Also, don’t forget to factor in closing costs. Closing costs — including taxes, attorney’s fee, and transfer fees — average between 2 and 7 percent of the home price.

5. Get your credit in order. Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.

6. Determine your mortgage qualifications. How large of mortgage do you qualify for? Also, explore different loan options — such as 30-year or 15-year fixed mortgages or ARMs — and decide what’s best for you.

7. Get preapproved. Organize all the documentation a lender will need to pre-approved you for a loan. You might need W-2 forms, copies of at least one pay stub, account numbers, and copies of two to four months of bank or credit union statements.

 8. Weigh other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you can use the money you’ve saved to buy your fist home without paying a penalty for early withdrawal. Can you receive a gift from family?

 9. Calculate the costs of homeownership. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.

10. Contact a REALTOR®. Find an experienced REALTOR® who can help guide you through the process.  Not everyone real estate agent is a Realtor®.  Contact me today for more info: 310-398-2332,

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California Real Estate buyer tax credit

March 3, 2010

H.R. 3548 provides both for the extension of the first-time homebuyer tax credit and expansion of it to qualified non-first-time buyers as well.  A few of the provisions of this new law include the following: 

(1)  Both the $8,000 first-time homebuyer tax credit and the $6,500 tax credit for “move-up” buyers (see 4 below) would sunset on April 30, 2010. However, purchasers who have binding contracts as of April 30, 2010 (before May 1, 2010), would still qualify for the credit as long as they complete the transaction within 60 days (or June 30, 2010).

(2)  The amendment establishes income limits of $125,000 for an individual or $225,000 for a couple for both credits.

(3)  The cost of the home being purchased cannot exceed $800,000 for both categories in order to be eligible for the credit. 

(4)  “Move up” buyers (an individual or his/her spouse, if married) are qualified if he/she “has owned and used the same residence as such individual’s principal residence for any 5-consecutive-year period during the 8-year period ending on the date of the purchase of a subsequent principal residence.”

For purchases made in 2010, taxpayers would be able to claim the credit on their 2009 income tax return. Homebuyers would not have to repay the credit, provided the home remains their principal residence for 36 months after the purchase date. However, this recapture provision would not apply in the case of a member of the Armed Forces, military intelligence or Foreign Service who is on qualified official extended duty. In addition, members of the military who have been deployed overseas for 90 days or more in 2008 or 2009 would have until April 30, 2011, to claim the homebuyer tax credit.

The amendment also includes anti-fraud language that gives the IRS the authority to do greater oversight during the processing of the return rather than waiting for an audit situation. The amendment requires the taxpayer claiming the credit to be 18 or older and requires a HUD-1 settlement statement to be attached when claiming the credit.

Do I have to give the buyer my furniture?

February 11, 2010

It is a good idea to begin this conversation with your agent before your property hits the market.  There are laws on the books about what is a fixture: “The California legislature has declared that a thing is affixed to the land when it is attached and imbedded into a wall permanently by means of cement, plaster, nails, bolts and screws is a fixture.  Also, it is affixed to the land so as to be regarded as a permanent part of it, such as a building, a tree or bridge, as well as anything that is similarly affixed to an already affixed object such as the doors of a building, or permanently installed cabinets, or built-in appliances”.   California Department of Real Estate Reference Guide.

So how does this affect you?  You may have a lovely chandelier in your dining room that was given to you by a family member and it holds strong sentimental value, the best advice is to remove it and put another one in its place.  Invariably the new buyer will want what you want.  You should have your agent insert the exclusion in your contract with your agent and in the MLS.  I have had buyers ask for flat screen TV’s, patio furniture (a lot of furniture), bar stools, furniture, fish in the coy pond.  Jokingly, some buyer’s upon first seeing the house may ask for the family pet or that fantastic car in driveway.   The most common requests are for the refrigerator, washer, dryer and stove, and sometimes fireplace equipment, which may match the fireplace screen. Some refrigerators and stoves are built-in, or built as part of the structure, and it would damage framing around these items to remove them.   I had one transaction in 22 years where the lender disallowed the transfer of the washer, dryer and ‘frig, and considered them personal property.  All we had to do was remove the items from the contract.  If there are a number of items, for instance, a house full of furniture, the lender may ask for it to be taken out of the contract as they lend on real estate and not personal property.  Some buyers offer to buy some of the seller’s personal items.

If you think about when you bought your home the thought of forking out more money after the closing may not figure into your budget.  You might be able to ask for them on a subsequent purchase.

For info on what your house in Los Angeles is worth or to search your new home go to my site DonnaBenton.com.

Real Estate 101 Glossary V-Z

December 31, 2009

The last blog  of the year with the last letters of this glossary.  Thank you for joining me this year and have a Happy, healthy and prosperous New Year!

VACANCY RATE   The current percentage of vacant properties in a given area, regardless of why they are vacant.

VA MORTGAGE  A mortgage that is guaranteed by the Department of Veterans Affairs (VA).

VARIANCE   An exception to municipal zoning regulations granted for a specific time period to allow for non-conforming use of the land.

VENT PIPE   A pipe allowing gas to escape.

VESTED   Having the right to use a portion of a fund such as an IRA. Typically vesting occurs over time. If you are 100% vested, you have a right to 100% of the fund.

VETERANS AFFAIRS, DEPARTMENT OF (VA)   The successor to the Veteran’s Administration, this government agency is responsible for ensuring the rights and welfare of our nation’s veterans and their dependents. Among other duties, the VA insures home loans made to veterans.

VOLTAGE   An expression of electric force, or pressure. One volt being the force needed to move one amp against one ohm resistance.

WALK-THROUGH INSPECTION   A process whereby an appraiser examines a property in preparation for estimating its value. Also, the process of inspecting a property for any damage prior to that property being bought or sold.

WARRANTY   An affidavit given to stipulate the condition of a property. The person giving the warranty assumes liability if the condition turns out to be untrue.

WATT   An expression of amount of electrical power. Volt times amps equals watts.

WEAR AND TEAR   A term used to indicate the normal damage inflicted on a property through every-day use.

WEATHER STRIPPING   Material used around windows and doors to prevent drafts.

WEEP HOLE  Drainage hole that allows water to escape.

ZERO LOT LINE   A municipal zoning category wherein a building or other fixture may abut the property line.

ZONE   A specific area within a municipality or other jurisdiction which conforms to certain guidelines regarding the use of property in the zone. Typical zones include single-family, multi-family, industrial, commercial and mixed-use.

Real Estate 101 glossary P-R

November 28, 2009

Here we are after Thanksgiving.  Forget the turkey, I was stuffed.

PARTIAL INTEREST   A shared ownership in a piece of property. May be divided among two or more parties.

PARTIAL PAYMENT   A payment of less than the regular monthly amount. Usually, a lender will not accept partial payments.

PERIODIC PAYMENT CAP   The limit on how much regular monthly payments on an Adjustable Rate Mortgage can change during one adjustment period.

PERIODIC RATE CAP   The limit on how much the interest rate on an Adjustable Rate Mortgage can change during any one adjustment period.

PERSONAL PROPERTY Owned items which are not permanently affixed to the land.

PERSONAL RESIDENCE   The primary domicile of a person or family.

PLANNED UNIT DEVELOPMENT (PUD)   A coordinated, real estate development where common areas are shared and maintained by an owner’s association or other entity.

PLAT   A plan or chart of a piece of land which lays out existing or planned streets, lots or other improvements.

POINT   A percentage of a mortgage amount (one point = 1 percent).

PRE-APPROVAL   The process of applying for a mortgage loan and becoming approved for a certain amount at a certain interest rate before a property has been chosen. Pre-approval allows the borrower greater freedom in negotiations with sellers.

PREFABRICATED  Any building or portion thereof which is manufactured and assembled off site, then erected on a property.

PREPAYMENT  Payment made that reduces the principal balance of a loan before the due date and before the loan has become fully amortized.

PREPAYMENT PENALTY   A fee that may be charged to a borrower who pays off a loan before it is due.

PRE-QUALIFICATION   Less formal that pre-approval, pre-qualification usually means a written statement from a loan officer indicating his or her opinion that the borrower will be able to become approved for a mortgage loan.

PRIME RATE   The interest rate that banks and other lending institutions charge other banks or preferred customers.

PRINCIPAL   The amount owed on a mortgage which does not include interest or other fees.

PRINCIPAL BALANCE   The outstanding balance of principal on a mortgage. Does not included interest due.

PRINCIPAL, INTEREST, TAXES, AND INSURANCE (PITI)   The most common constituents of a monthly mortgage payment.

PRIVATE MORTGAGE INSURANCE (PMI)  A form of mortgage insurance provided by private, non-government entities. Normally required when the LOAN TO VALUE RATIO is less that 20%.

PROPERTY  Any item which is owned or possessed.

PURCHASE AGREEMENT   A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.

QUADRAPLEX  Any building designed to accommodate four families.

QUALIFYING RATIOS   Two ratios used in determining credit worthiness for a mortgage loan. One is the ratio of a borrower’s monthly housing costs to monthly income. The other is a ratio of all monthly debt to monthly income.

QUITCLAIM DEED   A legal document which transfers any ownership an individual has in a piece of property. Often used when the amount of ownership is not known or is unclear.

RAFTER  A structural element of the roof, sloping from the peak to the outer walls.

RANCH HOUSE   An architectural style typified by a single-story, low-roof construction. Popular in the western U.S.

RATE LOCK   A guarantee from a lender of a specific interest rate for a period of time.

RAW LAND   Any land which has not been developed.

REAL ESTATE   A piece of land and any improvements or fixtures located on that land.

REAL ESTATE AGENT   A licensed professional who facilitates the buying and selling of real estate.

REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA)  A federal law requiring lenders to give full disclosure of closing costs to borrowers.

REAL PROPERTY   Land, improvements and appurtenances, and the interest and benefits thereof.

REALTOR®  A real estate agent or broker who is a member of the NATIONAL ASSOCIATION of REALTORS®.

RECEPTACLE   An electrical outlet to plug into.

RECORDER   A local government employee whose role it is to keep records of all real estate transactions within the jurisdiction.

RECORDING   The filing of a real estate transaction with the appropriate government agent (normally the RECORDER). A real estate transaction is considered final when it is recorded.

REFINANCE TRANSACTION   A new loan to pay off an existing loan. Typically to gain a lower interest rate or convert equity into cash.

REGISTER   Where air from a furnace or air conditioning system enters the room.

RELOCATION SERVICE   Any company or agency that assists corporate employees in relocating from one place to another. Services may include hiring and coordinating real estate agents, moving companies, utilizes and the like.

REMAINING BALANCE   Back to top
The amount of principal, interest and other costs that has not yet been repaid.

REMAINING TERM   The amount of time remaining on the original amortization schedule.

REMODEL   An activity designed to improve the value or desirability of a property through rebuilding, refurbishing, redecorating or adding on to it.

REPAYMENT PLAN   A plan to repay delinquent payments, agreed upon between a lender and borrower, in an effort to avoid foreclosure.

REPLACEMENT RESERVE FUND  An account, or fund, setup for the replacement of short life items, such as carpeting, in the common areas of a cooperative property.

RESIDENTIAL PROPERTY  A piece of property whose highest and best use is the maintenance of a residence.

REVOLVING DEBT   A type of credit that allows the borrower/customer to make charges against a predetermined line of credit. The customer then pays monthly installments on the amount borrowed, plus interest.

RIDGE BOARD   The structural member of a roof where the rafters join at the top.

RIGHT OF FIRST REFUSAL   An agreement giving a person the first opportunity to buy or lease a property before the owner offers it for sale to others.

ROOF PITCH   The degree of slope in a roof.

RURAL  An area outside of an established urban area or metropolitan district.

Real Estate 101 glossary L-M

November 13, 2009

Here is “l” and “m”,  couldn’t think of anything with a ‘k”.

 

LALLY COLUMN  A concrete filled steel pipe used to support beams.

 LATE CHARGE  An extra charge, or penalty added to a regular mortgage payment when the payment is made late by an amount of time specified in the original loan document.

LATENT DEFECTS Any defect in a piece of property which is not readily apparent, but which has an impact of the value. Structural damage or termite infestation would be examples of latent defects.

 LEASE Lola and mea REMAX logo A contract between a property owner and a tenant specifying the payment amount, terms and conditions, as well as the length of time the contract will be in force.

 LEASEHOLD ESTATE  A type of property ”ownership” where the buyer actually has a long-term lease on the property.

LEASE OPTION  A lease agreement that gives the tenant an option to buy the property. Usually, a portion of the regular monthly rent payment will be applied towards the down payment.

LEGAL DESCRIPTION  The description of a piece of property, identifying its specific location in terms established by the municipality or other jurisdiction in which the property resides. Often related in specific distances from a known landmark or intersection.

 LENDER  The person or entity who loans funds to a buyer. In return, the lender will receive periodic payments, including principal and interest amounts.

 LIABILITIES  A person’s outstanding debt obligations.

 LIABILITY INSURANCE  Insurance that covers against potential lawsuit brought against a property owner for alleged negligence resulting in damage to another party.

LIEN  Any claim against a piece of property resulting from a debt or other obligation.

 LIFE CAP  A limit on how far the interest rate can move for an Adjustable Rate Mortgage.

 LIKE-KIND PROPERTY  Any property which is substantially similar to another property.

LINE OF CREDIT  An extension of credit for a certain amount for a specific amount of time. To be used by the borrower at his discretion.

LIQUID ASSET  Any asset which can be quickly converted into cash at little or no cost, or cash itself.

 LOAN Money borrowed, to be repaid with interest, according to the specific terms and conditions of the loan.

 LOAN OFFICER  A person that “sells” loans, representing the lender to the borrower, and the borrower to the lender.

LOAN ORIGINATION  How a lender refers to the process of writing new loans.

LOAN SERVICING  The processing of payments, mailing of monthly statements, management and disbursement of escrow funds etc Typically carried out by the company you make payments to.

LOAN-TO-VALUE RATIO (LTV)  The comparison of the amount owed on a mortgaged property to its fair market value.

LOCK-IN  An agreement between a lender and a borrower, guaranteeing an interest rate for a loan if the loan is closed within a certain amount of time.

 LOCK-IN PERIOD  The amount of time the lender has guaranteed an interest rate to a borrower.

MAJOR DEFICIENCY  A deficiency that strongly impacts the usability and habitability of a house. Or a deficiency that may be very expensive to repair.

MANUFACTURED HOUSING  Once known as ”mobile homes,” manufactured housing is any building which has been constructed off site, then moved onto a piece of real property.

MARGIN  The difference between the interest rate and the index on an adjustable rate mortgage.

MARGINAL LAND  Land whose value has been diminished due to some internal defect or external condition. In most cases, the cost to correct the flaw or condition is as much or more than the expected return from the property.

MASTER ASSOCIATION  An umbrella organization that is made up of multiple, smaller home owner’s associations. Often found in very large developments or condominium projects.

MATURITY   The date on which the principal balance of a financial instrument becomes due and payable.

 MERGED CREDIT REPORT    A credit report derived from data obtained from multiple credit agencies.

METES AND BOUNDS   A traditional way of describing property, generally expressed in terms of distance from a known landmark or intersection, and then following the boundaries of the property back to its origin.

METROPOLITAN AREA  The accumulated land in and around a city or other municipality which falls under the political and economic influence of that entity.

MINERAL RIGHTS  The legal right to exploit and enjoy the benefits of any minerals located below the surface of a parcel of land.

MISREPRESENTATION  A statement by one party in a transaction that is incorrect or misleading. Most misrepresentations are deemed to be intentional and thus may constitute fraud. Others, however, some are rendered through simple mistakes, oversights or negligence.

 MORTGAGE  A financial arrangement wherein an individual borrows money to purchase real property and secures the loan with the property as collateral.

MORTGAGE BANKER  A financial institution that provides primary and secondary mortgages to home buyers.

MORTGAGE BROKER  A person or organization that serves as a middleman to facilitate the mortgage process. Brokers often represent multiple mortgage bankers and offer the most appropriate deal to each buyer.

MORTGAGEE  The entity that lends money in a real estate transaction. 

MORTGAGE INSURANCE  A policy that fulfills those obligations of a mortgage when the policy holder defaults or is no longer able to make payments.

 MORTGAGE INSURANCE PREMIUM (MIP)  A fee that is often included in mortgage payments that pays for mortgage insurance coverage.

MORTGAGE LIFE INSURANCE  A policy that fulfills the obligations of a mortgage when the policy holder dies.

MORTGAGOR  The entity that borrows money in a real estate transaction.

MULTI-FAMILY PROPERTIES  Any collection of buildings that are designed and built to support the habitation of more than four families.

Real Estatte 101 Glossary “I, & J'”

November 8, 2009

Lola and me

Been in LaJolla for Tom Ferry seminar.

Enjoy the I’s and J’s.

IMPROVED LAND   Any parcel of land which has been changed from its natural state through the creation of roads, buildings or other structures.

IMPROVEMENTS   
Any item added to vacant land with the intent of increasing its value or usability.

IMPROVEMENT RATIO   The comparative value of an improved piece of land to its natural, unaltered state.

INCOME APPROACH   The process of estimating the value of property by considering the present value of a stream of income generated by the property.

INCOME PROPERTY   A piece of property whose highest and best use is the generation of income through rents or other sources.

INDEPENDENT APPRAISAL   An estimation of value created by a professional, certified appraiser with no vested interest in the value of the property.

INSPECTION   The examination of a piece of property, its buildings or other amenities.

INSURABLE TITLE   The title to property which has been sufficiently reviewed by a title insurance company, such that they are willing to insure it as free and clear.

INTEREST RATE   A percentage of a loan or mortgage value that is paid to the lender as compensation for loaning funds.

INVESTMENT PROPERTY   Any piece of property that is expected to generate a financial return. This may come as the result of periodic rents or through appreciation of the property value over time.

JAMB   The side of a door frame.

JOINT TENANCY   A situation where two or more parties own a piece of property together. Each of the owners has an equal share, and may not dispose of or alter that share without the consent of the other owners.

JOISTS   Horizontal beams laid on edge to support flooring or a ceiling.

JUDGMENT   An official court decision. If the judgment requires payment from one party to another, the court may put a lien against the payee’s property as collateral.

JUDICIAL FORECLOSURE   A type of foreclosure conducted as a civil suit in a court of law.

JUMBO LOAN   A mortgage loan for an amount greater than the limits set by Fannie Mae and Freddie Mac. Often called non-conforming loans.a REMAX logo

Real Estate 101 Glossary “G & H”

November 2, 2009

Lola and me!cid_image6I am combining these two today.  Enjoy

GABLE ROOF   A steeply angled, triangular roof.

GALVANIZED PIPE  Iron pipe with a galvanized (zinc) coating.

GAMBREL ROOF  A ”barn-like” roof, where the upper portion of the roof is less-steeply angled than the lower part.

GENERAL LIEN  A broad-based claim against several properties owned by a defaulting party.

GEORGIAN   A classic, English-style hose characterized by simple rectangular shape and multiple stories.

GFI   Ground Fault Interrupter. A type of circuit breaker required in areas where water is present.

GINNIE MAE   A wholly owned corporation created in 1968 within the U.S. Department of Housing and Urban Development to serve low-to moderate-income homebuyers.

GIRDER   A main supporting beam.

GOVERNMENT MORTGAGE  
Any mortgage insured by a government agency, such as the FHA or VA.

GRADE   The slope of land around a building. Also ground level.

GRANTEE   Any person who is given ownership of a piece of property.

GRANTOR   Any person who gives away ownership of a piece of property.

GROSS AREA   
The sum total of all floor space, including areas such as stairways and closet space. Often measured based on external wall lengths.

GROUTING   Material used around ceramic tile.

GUTTER The trough around the edge of the roof that catches and diverts rain.

HALF-SECTION   320 acres.

HAZARD INSURANCE   
Insurance covering damage to a property caused by hazards such as fire, wind and accident.

HEADER   
The framing elements above an opening such as a window or door.

HEARTH   
The floor of a fireplace or the area immediately in front of it.

HEIGHT ZONING   A municipal restriction on the maximum height of any building or other structure.

HIDDEN AMENITIES   
Assets of a property which contribute to its value, but are not readily apparent. Examples might include upgraded or premium building materials.

HIGHEST AND BEST USE   The most profitable and likely use of a property. Selected from reasonably probable and legal alternative uses, which are found to be physically possible, appropriately supported and financially feasible to result in the highest possible land value.

HOME EQUITY CONVERSION MORTGAGE (HECM)   
Also known as a reverse annuity mortgage. It allows home owners (usually older) to convert equity in the home into cash. Normally paid by the lender in monthly payments. HECM’s typically do not have to be repaid until the borrower is no longer occupying the home.

HOME EQUITY LINE OF CREDIT   
A type of mortgage loan that allows the borrower to draw cash against the equity in his home.

HOME INSPECTION   
A complete examination of a building to determine its structural integrity and uncover any defects in materials or workmanship which may adversely affect the property or decrease its value.

HOME INSPECTOR   A person who performs professional home inspections. Usually, with an extensive knowledge of house construction methods, common house problems, how to identify those problems and how to correct them.

HOMEOWNER’S ASSOCIATION   
An organization of home owners in a particular neighborhood or development formed to facilitate the maintenance of common areas and to enforce any building restrictions or covenants.

HOMEOWNER’S INSURANCE   
A policy which covers a home owner for any loss of property due to accident, intrusion or hazard.

HOMEOWNER’S WARRANTY   
An insurance policy covering the repair of systems and appliances within the home for the coverage period.

HUD MEDIAN INCOME   
Median family income for a particular county or metropolitan statistical area (MSA), as estimated by the Department of Housing and Urban Development (HUD).

HUD-1 STATEMENT   A standardized, itemized list, published by the U.S. Department of Housing and Urban Development (HUD), of all anticipated CLOSING COSTS connected with a particular property purchase.

Tax Credit Extended

October 29, 2009

Lola and meYeah

a REMAX logo Senators agreed Wednesday to extend a popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers. The tax credit provides up to $8,000 to first-time homebuyers but is set to expire at the end of November. The Commerce Department said Wednesday that new home sales fell 3.6 percent in September, and some industry representatives blamed uncertainty about the tax credit. Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev. The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, according to a summary of the legislation being circulated among lawmakers. House leaders have said they support extending the tax credit for homebuyers. Sen. Chris Dodd, D-Conn., has been negotiating for several weeks with Sen. Johnny Isakson, R-Ga., to craft an extended tax credit for homebuyers that would pass the Senate. Lawmakers didn’t release a cost estimate for extending the tax credit, though similar proposals were projected to cost about $10 billion. Industry representatives said uncertainty about the tax credit is hurting new home sales. September’s decline was the first since March. It takes 45 days to 60 days to close on a house, making it unlikely a sale made today would be consummated by the end of November, said Lucien Salvant, spokesman for the National Association of Realtors. “Buyers right now have an incentive to hold off, not knowing whether the credit will be extended,” Salvant said. About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.

Real Estate 101 Glossary “F”

October 25, 2009

Lola and mea REMAX logoToday I will tackle “F”.

FACADE   
The front exposure of any building. Often used to describe an artificial or false front which is not consistent with the construction of the rest of the building.

FAIR CREDIT REPORTING ACT   
A federal law regulating the way credit agencies disclose consumer credit reports and the remedies available to consumers for disputing and correcting mistakes on their credit history.

FAIR MARKET VALUE  
The price at which two unrelated parties, under no duress, are willing to transact business.

FANNIE MAE   
A private, shareholder-owned company that works to make sure mortgage money is available for people to purchase homes. Created by Congress in 1938, Fannie Mae is the nation’s largest source of financing for home mortgages.

FASCIA   
The boards that enclose the eaves.

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC)   
The U.S. Government agency created in 1933 which maintains the stability of and public confidence in the nation’s financial system by insuring deposits and promoting safe and sound banking practices.

FEDERAL HOUSING ADMINISTRATION (FHA)   
A sub-agency of the U.S. Department of Housing and Urban Development created in the 1930’s to facilitate the purchase of homes by low-income, first-time home buyers. It currently provides federally-subsidized mortgage insurance for private lenders.

FEE APPRAISER   
A certified, professional appraiser who forms an opinion of the fair market value of property and receives a set fee in exchange.

FEE SIMPLE   
A complete, unencumbered ownership right in a piece of property.

FEE SIMPLE ESTATE   
A form or ownership, or holding title to real estate. It is the most complete form of title, having an unconditional and unlimited interest of perpetual duration.

FHA MORTGAGE  
A mortgage that is insured by the Federal Housing Administration (FHA).

FINAL VALUE ESTIMATE   
The opinion of value of a piece of property resulting from an appraisal following the USPAP guidelines.

FIRST MORTGAGE   
The primary loan or mortgage secured by a piece of property.

FIXED-RATE MORTGAGE (FRM)   
A mortgage which has a fixed rate of interest over the life of the loan.

FIXTURE   
Any piece of personal property which becomes permanently affixed to a piece of real property.

FLASHING   
The metal used around the base of roof mounted equipment, or at the junction of angles used to prevent leaking.

FLOOD INSURANCE   
Supplemental insurance which covers a home owner for any loss due to water damage from a flood. Often required by lenders for homes located in FEMA-designated flood zones.

FLOOR PLAN   
The representation of a building which shows the basic outline of the structure, as well as detailed information about the positioning of rooms, hallways, doors, stairs and other features. Often includes detailed information about other fixtures and amenities.

FLUE   
The furnace exhaust pipe, usually going through the roof.

FLUSH VALVE   

The valve between the toilet bowl and the tank.

FOOTING   
The partially buried support for a vertical structural member such as a post.

FORECLOSURE   
The process whereby a lender can claim the property used by a borrower to secure a mortgage and sell the property to meet the obligations of the loan.

FORFEITURE   

The loss of property or money due to the failure to meet the obligations of a mortgage or loan secured by that property.

FOUNDATION  
The solid structural element upon which a structure is built.

FRONTAGE   
The segment of a property that runs along a point of access, such as a street or water front.

FUNCTIONAL OBSOLESCENCE  
A decrease in the value of property due to a feature or lack thereof which renders the property undesirable. Functional obsolescence can also occur when the surrounding area changes, rendering the property unusable for its originally intended purpose.