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Gulfport Mortgage Terms Glossary – E-O

Earnest Money

The earnest money is a set amount of funds given by the buyer when they make an offer on a property. This payment on a Gulfport mortgage is given as a sign of good faith and shows that the buyer is serious about purchasing the home.

Equity

Equity refers to the amount a home is worth. The value may be set above or below the amount of the home and it determines the amount the buyer can borrow from a bank.

Escrow Account

An escrow account is kept separate from the loan payment and is the place where the mortgage lender issues payments like property taxes and insurance.

Fair Market Value

This term refers to the value the property would receive in the current marketplace.

FHA Loan

A loan issued by a lender approved by the Federal Housing Administration. It is intended to assist borrowers who cannot receive approval for traditional loans.

Fixed Rate Mortgage

This term refers to a conventional mortgage that retains the same monthly payments and interest rates for the entire loan.

Good Faith Estimate

A good faith estimate shows an itemized list of all the expected costs and fees associated with the loans. It is required by law to be issued during the loan application process.

Hazard Insurance

Sometimes called homeowner’s insurance, this term is for insurance that protects the home in the event of damage.

HUD Loan

A HUD loan is granted to homebuyers who plan on fixing a property and is included in the mortgage.

Maturity

The maturity of a loan is how long it will last before it is paid off in full.

Mortgage Insurance

This is a kind of insurance that is intended to protect the lender if the purchaser of the property defaults.

Mortgage Insurance Premium

The mortgage insurance premium (MIP) is a 1.5 percent fee that is added to any FHA loan and is paid during the closing process.

Origination Fee

This is a type of fee that is charged by the lender when they process the loan. It will be disclosed during the Good Faith Estimate.

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