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mortgage loan glossary G

Use the alphabet letters below to navigate to the words in this glossary.

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- G -

Gift Letter

If a home buyer uses money offered by a relative, a friend or an eligible third party toward a down payment, the lender will require the donor to provide documentation. The donor must write a letter stating they have offered a gift of money to the home buyer or complete and sign a form called a gift letter proving that the money does not have to be repaid. When the funds are deposited into the home buyer's bank account, the lender requires a receipt of the transaction.
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Ginnie Mae (Government National Mortgage Corporation or GNMC)

A government-owned corporation within the U.S. Department of Housing and Urban Development (HUD), that buys VA and FHA loans from lenders, securitizes them and sells Ginnie Mae securities to investors. The Ginnie Mae guaranty allows mortgage lenders to obtain a better price for their mortgage loans in the secondary market. The lender can then use the proceeds to make new mortgage loans available.
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Good Faith Estimate

An estimate of all closing costs that a lender must provide a prospective borrower within three days of submitting a mortgage loan application. It provides an itemization of closing costs including prepaid expenses, lender and third party fees as well as all other expenses the borrower will be required to pay.
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Graduated Payment Mortgage (GPM)

A mortgage that has lower payments initially (with potential negative amortization), which increase each year until the loan is fully amortized.
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Growing Equity Mortgage (GEM)

The GEM, while amortized like a conventional mortgage, uses a unique repayment method to save interest expense by 50% or more. Instead of paying a set amount each month, GEMs have a graduated payment increase that can be calculated by increasing the monthly payment two to five percent annually during the loan, or the monthly payments can be set to increase based on the performance of a specific market index. As monthly payments rise, all additional money paid by borrowers is used to reduce the principal balance, which results in a loan paid off in less than 15 years.
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