Mortgage Definitions (G - I)

Ginnie Mae
A security issued by the Government National Mortgage Association and secured by mortgages serviced by certain federal agencies.

Government National Mortgage Association(GNMA)
GNMA or Ginnie Mae. A government-owned agency which buys mortgages from lending institutions, securitizes them, and then sells them to investors. Because the payments to investors are guaranteed by the full faith and credit of the U.S. Government, they return slightly less interest than other mortgage-backed securities

Graduated payment mortgage (GPM)
A type of flexiable payment mortgage where the payments increase for a specified period of time and then level off. This type of mortage has negative amortization built into it.

Growing Equity Mortgage (GEM)
A fixed rate morrtage that provides scheduled payment increases over an established period of time. The increased amount of the monthly payment is applid directly toward reducing the remaining balace of the mortgage.

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

Guarantee Mortgage
A mortgage that is guaranteed by a third party

Hazard Insurance
A form of insurance in which the insurance company protects the insured form specified losses, such as fire, windstorm and the like

Housing Expenses-to-oncome Ratio
The ratio, expressed as a percantage which results when a borrower's housing expenses are divided by his/her gross monthly income. See debt-to-income ratio

HUD-1 Statement
A document thath provides an itemized listing of the funds that are payable at closing. Items that appear on the statement include real estate commissions, loan fees, points and initial escrow amounts. Each item on the statement is represented by a sperarate number wihtin a standardized nuymbering system. The totals at the bottom of the HUD-1 statement define the seller's net proceeds and the buyer's net payment at closing.

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

Index
A published interst rate against whcih lenders measure the difference between the current interst rate on an adjustable rate mortgage and that earned by other investments (such as one, three, and five year U.S. Treasury securtity yields, the monthly average interest rate on loans closed by savings and loan institutions, and the monthly average costs-of-funds incurred by savings and loans), which is then used to adjust the interst rate on an adjustable mortgage up or down.

Indexed Rate
The sum of the published index plus the margin. FOr example if the index is 4% and the margin is 2.75%, the indexed rate wouldbe 6.75%. Often, lenders charge less than the indexed rate the first yfear of an adjustable rate mortgage.

Initial Interest Rate
This refers to the original interest rate of the mortgage at the time of closing. This rate changes for an adjustable rate mortgage (ARM). It's also known as "start rate" or "teaser"

Installment
The regular periodic payment that a borrower agrees to make to a lender.

Insured Mortgage
A mortgage that is protected by the Federal Housing Administration (FHA) or by private mortage insurance (MI)

Interest
The fee charged for borrowing money

Interest Accrual Rate
The percentage rate at which interst accrues on teh mortgage. In most cases, it is also the rate used to calculate the monthly payments

Interest Rate Buydown Plan
An arrangement that allows the prperty seller to deposit money to an account. That money is then released each month to reduce the mortagor's monthly paymetns during the early years of a mortgage.

Interest Rate Ceiling
For an adjustable rate mortgage (ARM), the maximun interst rate, as specified in the mortgage note

Interest Rate Floor
For an adjustable rate mortgage (ARM), the minimum interest rate, as specified in the mortgage note.

Interim Financing
A contruction loan made during completion of a building or a project. A permanent loan usually replaces this loan after completion

Investor
A money source for a lender