Glossary

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General Warranty Deed
A deed which conveys not only all the grantor's interests in and title to the property to the grantee, but also warrants that if the title is defective or has a "cloud" on it (such as mortgage claims, tax liens, title claims, judgments, or mechanic's liens against it) the grantee may hold the grantor liable.

Gift funds
Funds donated to the borrower from certain eligible sources to assist the borrower in meeting closing costs. Generally, eligible sources are: a relative, church, municipality, or nonprofit organization.

Gift Letter
A written explanation signed by the individual giving the gift stating, "This is a bona fide gift and there is no obligation expressed or implied to repay this sum at any time."

Ginnie Mae
Nickname for Government National Mortgage Association (GNMA).

Government National Mortgage Association
A government organization that participates in the secondary market, buying, selling and guaranteeing FHA and VA loans.

Graduated Payment Mortgage (GPM)
A mortgage that has initial monthly payments set at an amount lower than that required for full amortization of the debt. The payments are then increased by a specified percentage each year during the graduated payment period. At the end of the period, payments are in an amount that will fully amortize the mortgage.

Grantee
That party in the deed who is the buyer or recipient.

Grantor
That party in the deed who is the seller or giver.

Gross Monthly Income
Total monthly income earned before tax and other deductions.

Guaranty
A promise by one party to pay a debt or perform an obligation contracted by another if the original party fails to pay or perform according to a contract.

Hazard Insurance
Protects against damages caused to property by fire, windstorms, and other common hazards.

High-Ratio Loan
Mortgage loans in excess of 80 percent of the loan amount divided by the lower of the sales price or appraised value.

Home equity line of credit (HELOC)
A real estate loan, usually in a subordinate position, that allows a borrower to borrow against equity in real estate owned with specific limitations. This is an open-end loan that permits the borrower to repay and reborrow the funds available.

Home equity loan
A mortgage on the borrower's principal residence, usually for the purpose of making home improvements or debt consolidation. This is closed-end loan repayable in accordance with a fixed schedule.

Homeowneršs Association (HOA)
A non-profit association, whose directors and officers are elected by the unit owners of a condominium or PUD project; primary responsibilities are to manage the common areas, expenses and services of the project.

Homeowners' Association Dues
The fees imposed by a condominium or homeowners' association for maintenance of common areas.

Housing and Urban Development (HUD)
The U.S. government agency that administers FHA, GNMA and other housing programs.

Housing debt-to-income ratio
The sum of all monthly housing mortgage expenses such as principal, interest, taxes and insurance (PITI), Homeowners dues, private mortgage insurance and any special assessments as a percentage of gross qualifying income.

HUD
See: Housing and Urban Development

Impound
That portion of a borrower's monthly payment held by the lender or servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. Also known as Reserves.

Index
A published interest rate complied from other indicators such as U.S. Treasury bills or the monthly average interest rate on loans closed by savings and loan organizations. Mortgage lenders use the index figure to establish rates on adjustable rate mortgages (ARM's).

Installment debt
Borrowed money that is repaid in successive payments, usually at regular intervals.

Insured Loans
A loan insured by HUD-FHA or a private mortgage insurance company.

Interest
A charge paid for borrowing money.

Interest rate
The simple interest rate, stated as a percentage, charged b a lender on the principal amount of borrowed money.