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Buy-Down
When the lender and/or the home builder subsidized the mortgage by lowering the interest rate during the first few years of the loan. While the payments are initially low, they will increase when the subsidy expires. These are sometimes used to qualify borrowers for a loan amount that they would not otherwise qualify for but will be able to pay in subsequent years as their income increases. |
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Federal National Mortgage Association (FNMA)
A tax-paying corporation created by Congress to support the secondary market in mortgages on residential properties. FNMA sells residential mortgages to lenders (Conventional, FHA insured, and VA guaranteed). FNMA also purchases pools of mortgages from lenders with securities, also know as Fannie Mae, the largest single holder of home mortgages in the United States. |
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Home Equity Line of Credit (HELOC)
A revolving line of credit secured on the equity in the mortgagor's house, usable for any purpose. |
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Purchase Money Mortgage
A mortgage given by the purchaser to secure a loan for part or all of the purchase price. Such a mortgage becomes a lien on the property simultaneously with the passing of title, and if immediately recorded becomes prior to any lien against the purchaser. |
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