FHA Federal Housing Administration
Established in 1934 to advance homeownership opportunities for all Americans assists homebuyers by providing mortgage insurance to lenders to cover most losses that may occur when a borrower defaults this encourages lenders to make loans to borrowers who might not qualify for conventional mortgages.

Home inspection
An examination of the structure and mechanical systems to determine a homes safety makes the potential homebuyer aware of any repairs that may be needed.

Escrow account
A separate account into which the lender puts a portion of each monthly mortgage payment an escrow account provides the funds needed for such expenses as property taxes homeowners insurance mortgage insurance etc.

Settlement
Another name for closing .

Bankruptcy
A federal law Whereby a persons assets are turned over to a trustee and used to pay off outstanding debts this usually occurs when someone owes more than they have the ability to repay.

Loan fraud
Purposely giving incorrect information on a loan application in order to better qualify for a loan may result in civil liability or criminal penalties.

Mortgage Modification
A loss mitigation option that allows a borrower to refinance and/or extend the term of the mortgage loan and thus reduce the monthly payments.

Fixed-rate mortgage
A mortgage with payments that remain the same throughout the life of the loan because the interest rate and other terms are fixed and do not change.

Lien
A legal claim against property that must be satisfied When the property is sold

Index
A measurement used by lenders to determine changes to the Interest rate charged on an adjustable rate mortgage.