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GLOSSARY
Floor loan
A floor loan is a type of debt most commonly associated with construction projects. The lender states a minimum amount that it's willing to lend upfront, with later funding provided as the project meets certain milestones.
Floor models
A floor model, also called a display model, is an item that's taken out of its packaging and placed on display in a retail establishment. Once the display is changed out, the retailer will sell the item, usually at a discounted price. Floor models often suffer wear and tear while on display.
Florida room
Florida room is another term for a sun room. Florida rooms are enclosed, glass structures that are attached to the outside of a home. They function as a patio would, but offer protection from the weather.
FNMA 30-year mortgage commitment delivery 60 days
FNMA 30-year mortgage commitment delivery 60 days is a measure that specifies Fannie Mae's required net yield on 30-year, fixed-rate mortgage loans that will be delivered within 30 to 60 days. Lenders use the measure to set their interest rates on conforming loans (i.e., loans they intend to sell to Fannie Mae).
For sale by owner (FSBO)
For sale by owner, or FSBO, describes a property that's being sold without agency representation. The selling owner takes responsibility for executing the documentation.
Forbearance
The ability to make interest-only payments on your student loan during a time of financial hardship. If you're having serious financial difficulty and you don't qualify for a loan deferment, you can request forbearance.
Forced liquidation
Forced liquidation is the selling of investment positions implemented by a brokerage when a customer's account doesn't meet margin requirements. Usually, the customer will be warned repeatedly to fund the account. If the warnings are ignored, the brokerage can sell off the customer's investments to minimize its risk.
Foreclosure
It is a reposession of property by a legal process due to default on terms of mortgage by the borrower. This property is sold at a public auction, the proceeds of which are used to settle mortgage debt.
Foreign currency surcharge
Foreign currency surcharge is a fee assessed by a credit card company when the customer uses the account to make a purchase in a foreign currency.
Foreign plan
A foreign plan is a Canadian pension arrangement that has complex tax consequences for Canadian taxpayers.
Foreign tax credit or deduction
A foreign tax credit or deduction is a reduction of U.S. tax liability resulting from the payment of foreign taxes on income earned overseas.
Forfeiture
Forfeiture is a penalty that results in the loss of an asset, such as when a homeowner who doesn't make the required mortgage payments is forced to give up ownership of the mortgaged property.
Freddie Mac
A government-created company that guarantees residential mortgages to help make them more affordable for families. Along with its sibling, Fannie Mae, the company purchases residential mortgages and bundles them into mortgage securities that are sold to investors; thus providing lenders with fresh funds for additional mortgages.
Freeloader
A term for a credit card holder who pays off the balance monthly and therefore pays no interest or fees.
Front end ratio
The percentage of before-tax income that goes toward monthly house payments. This is a key ratio that lenders use when deciding whether to approve a mortgage application.