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Glossary - F

Mortgage Brokers Glossary - F

Fair Housing Act:

A law which prohibits inequity in all aspects of the home buying process on the basis of color, sex, religion, national origin, race, disability or familial status.

Fair Market Value:

The imaginary price that a willing buyer and seller will agree upon when they are acting carefully, freely and with complete information of the situation.

First Mortgage:

Gives the lender a primary lien/charge against your house and property which has precedence over all other mortgages. Priority is determined by the date and time registered, so a first mortgage was literally and legally registered "first". A new first mortgage can therefore only be registered as a "first" mortgage upon the discharge of an existing one if the holder of a second mortgage "postpones" (i.e., "puts back in time") to a time immediately following the registration of the new first mortgage.

Five-Percent Down Program:

This allows buyers to obtain up to 95% financing on properties up to a certain value. The loan must be insured against default by CMHC (Canada Mortgage and Housing Corporation) or GE Capital Mortgage Insurance Corporation. This maximum home value will vary according to location (local Realtors should know the applicable limit) and eligibility can vary with personal circumstances.

Fixed-rate Mortgage:

A mortgage with payments which remain the same all through the life of the loan because the interest rate as well as other terms are fixed and do not change.

Flood Insurance:

Insurance which protects homeowners against losses from a flood; if a home is situated in a flood plain; the lender will necessitate flood insurance before approving a loan.

Foreclosure:

A legal process in that mortgaged property is sold to pay the loan of the defaulting borrower.