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Mortgage Glossary

 

Margin The number of percentage points the lender adds to the index rate to calculate the ARM interest rate at each adjustment.
Maturity The date on which the principal balance of a loan becomes due and payable.
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 and doesn't cover all of the interest. The loan balance therefore increases instead of decreasing.
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 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.
Mortgage Insurance Premium (MIP) The amount paid by a mortgagor for mortgage insurance.
Mortgage Life Insurance A type of term life insurance In the event that the borrower dies while the policy is in force, the debt is automatically paid by insurance proceeds.
Mortgagor The borrower in a mortgage agreement.
Monthly ARM With this loan, the interest rate is recalculated every month. Compared to other options, the rate is usually loawe on this ARM because the lender is only committing to a rate for a month at a time, so his culnerability is significantly reduced.

 

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