M
margin
For an adjustable-rate mortgage (ARM), the amount that is added to the index to establish the interest
rate on each adjustment date, subject to any limitations on the interest rate change.
master association
A homeowners' association in a large condominium or planned unit development (PUD) project that is
made up of representatives from associations covering specific areas within the project. In effect, it is a
"second-level" association that handles matters affecting the entire development, while the "first-level"
associations handle matters affecting their particular portions of the project.
maturity
The date on which the principal balance of a loan, bond or other financial instrument becomes due
and payable.
maximum financing
A mortgage amount that is within 5 percent of the highest loan-to-value (LTV) percentage allowed for
a specific product. Thus, maximum financing on a fixed-rate mortgage would be 90 percent or higher,
because 95 percent is the maximum allowable LTV percentage for that product.
merged credit report
A credit report that contains information from three credit repositories. When the report is created, the
information is compared for duplicate entries. Any duplicates are combined to provide a summary of a
your credit.
modification
The act of changing any of the terms of the mortgage.
money market account
A savings account that provides bank depositors with many of the advantages of a money market
fund. Certain regulatory restrictions apply to the withdrawal of funds from a money market account.
money market fund
A mutual fund that allows individuals to participate in managed investments in short-term debt
securities, such as certificates of deposit and Treasury bills.
monthly fixed installment
That portion of the total monthly payment that is applied toward principal and interest. When a
mortgage negatively amortizes, the monthly fixed installment does not include any amount for principal
reduction.
monthly payment mortgage
A mortgage that requires payments to reduce the debt once a month.
mortgage
A legal document that pledges a property to the lender as security for payment of a debt.
mortgage banker
A company that originates mortgages exclusively for resale in the secondary mortgage market.
mortgage broker
An individual or company that brings borrowers and lenders together for the purpose of loan
origination. Mortgage brokers typically require a fee or a commission for their services.
mortgagee
The lender in a mortgage agreement.
mortgage insurance
A contract that insures the lender against loss caused by a mortgagor's default on a government
mortgage or conventional mortgage. Mortgage insurance can be issued by a private company or by a
government agency such as the Federal Housing Administration (FHA). Depending on the type of
mortgage insurance, the insurance may cover a percentage of or virtually all of the mortgage loan.
See private mortgage insurance.
mortgage insurance premium (MIP)
The amount paid by a mortgagor for mortgage insurance, either to a government agency such as the
Federal Housing Administration (FHA) or to a private mortgage insurance (MI) company.
mortgage life insurance
A type of term life insurance often bought by mortgagors. The amount of coverage decreases as the
principal balance declines. In the event that the borrower dies while the policy is in force, the debt is
automatically satisfied by insurance proceeds.
mortgagor
The borrower in a mortgage agreement.
multidwelling units
Properties that provide separate housing units for more than one family, although they secure only a
single mortgage.
multifamily mortgage
A residential mortgage on a dwelling that is designed to house more than four families, such as a
high-rise apartment complex.
multifamily properties
Fannie Mae provides financing for multifamily (buildings with five or more units) rental properties
through a nationwide network of mortgage lenders.
N
negative amortization
A gradual increase in mortgage debt that occurs when the monthly payment is not large enough to
cover the entire principal and interest due. The amount of the shortfall is added to the remaining
balance to create "negative" amortization.
net cash flow
The income that remains for an investment property after the monthly operating income is reduced by
the monthly housing expense, which includes principal, interest, taxes and insurance (PITI) for the
mortgage, homeowners' association dues, leasehold payments and subordinate financing payments.
net worth
The value of all of a person's assets, including cash, minus all liabilities.
no cash-out refinance
A refinance transaction in which the new mortgage amount is limited to the sum of the remaining
balance of the existing first mortgage, closing costs (including prepaid items), points, the amount
required to satisfy any mortgage liens that are more than one year old (if the borrower chooses to
satisfy them) and other funds for the borrower's use (as long as the amount does not exceed 1
percent of the principal amount of the new mortgage).
nonliquid asset
An asset that cannot easily be converted into cash.
note
A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a
specified period of time.
note rate
The interest rate stated on a mortgage note.
notice of default
A formal written notice to a borrower that a default has occurred and that legal action may be taken.
margin
For an adjustable-rate mortgage (ARM), the amount that is added to the index to establish the interest
rate on each adjustment date, subject to any limitations on the interest rate change.
master association
A homeowners' association in a large condominium or planned unit development (PUD) project that is
made up of representatives from associations covering specific areas within the project. In effect, it is a
"second-level" association that handles matters affecting the entire development, while the "first-level"
associations handle matters affecting their particular portions of the project.
maturity
The date on which the principal balance of a loan, bond or other financial instrument becomes due
and payable.
maximum financing
A mortgage amount that is within 5 percent of the highest loan-to-value (LTV) percentage allowed for
a specific product. Thus, maximum financing on a fixed-rate mortgage would be 90 percent or higher,
because 95 percent is the maximum allowable LTV percentage for that product.
merged credit report
A credit report that contains information from three credit repositories. When the report is created, the
information is compared for duplicate entries. Any duplicates are combined to provide a summary of a
your credit.
modification
The act of changing any of the terms of the mortgage.
money market account
A savings account that provides bank depositors with many of the advantages of a money market
fund. Certain regulatory restrictions apply to the withdrawal of funds from a money market account.
money market fund
A mutual fund that allows individuals to participate in managed investments in short-term debt
securities, such as certificates of deposit and Treasury bills.
monthly fixed installment
That portion of the total monthly payment that is applied toward principal and interest. When a
mortgage negatively amortizes, the monthly fixed installment does not include any amount for principal
reduction.
monthly payment mortgage
A mortgage that requires payments to reduce the debt once a month.
mortgage
A legal document that pledges a property to the lender as security for payment of a debt.
mortgage banker
A company that originates mortgages exclusively for resale in the secondary mortgage market.
mortgage broker
An individual or company that brings borrowers and lenders together for the purpose of loan
origination. Mortgage brokers typically require a fee or a commission for their services.
mortgagee
The lender in a mortgage agreement.
mortgage insurance
A contract that insures the lender against loss caused by a mortgagor's default on a government
mortgage or conventional mortgage. Mortgage insurance can be issued by a private company or by a
government agency such as the Federal Housing Administration (FHA). Depending on the type of
mortgage insurance, the insurance may cover a percentage of or virtually all of the mortgage loan.
See private mortgage insurance.
mortgage insurance premium (MIP)
The amount paid by a mortgagor for mortgage insurance, either to a government agency such as the
Federal Housing Administration (FHA) or to a private mortgage insurance (MI) company.
mortgage life insurance
A type of term life insurance often bought by mortgagors. The amount of coverage decreases as the
principal balance declines. In the event that the borrower dies while the policy is in force, the debt is
automatically satisfied by insurance proceeds.
mortgagor
The borrower in a mortgage agreement.
multidwelling units
Properties that provide separate housing units for more than one family, although they secure only a
single mortgage.
multifamily mortgage
A residential mortgage on a dwelling that is designed to house more than four families, such as a
high-rise apartment complex.
multifamily properties
Fannie Mae provides financing for multifamily (buildings with five or more units) rental properties
through a nationwide network of mortgage lenders.
N
negative amortization
A gradual increase in mortgage debt that occurs when the monthly payment is not large enough to
cover the entire principal and interest due. The amount of the shortfall is added to the remaining
balance to create "negative" amortization.
net cash flow
The income that remains for an investment property after the monthly operating income is reduced by
the monthly housing expense, which includes principal, interest, taxes and insurance (PITI) for the
mortgage, homeowners' association dues, leasehold payments and subordinate financing payments.
net worth
The value of all of a person's assets, including cash, minus all liabilities.
no cash-out refinance
A refinance transaction in which the new mortgage amount is limited to the sum of the remaining
balance of the existing first mortgage, closing costs (including prepaid items), points, the amount
required to satisfy any mortgage liens that are more than one year old (if the borrower chooses to
satisfy them) and other funds for the borrower's use (as long as the amount does not exceed 1
percent of the principal amount of the new mortgage).
nonliquid asset
An asset that cannot easily be converted into cash.
note
A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a
specified period of time.
note rate
The interest rate stated on a mortgage note.
notice of default
A formal written notice to a borrower that a default has occurred and that legal action may be taken.
| Real Estate and Loan Glossary of Terms |
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| Capital Real Estate and Loans Nannette Truong Kazan, Broker-Real Estate Specialist |
| Cell: 714 478-4940 |
| Fax: 949 266-8911 |
| Office: 949 679-3400 |
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