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AThere are 942 entries in the glossary.Pages: «1 2 3 4 5 6 7 8 9 10 » Managing riskThe steps taken by an investor or manager to control or reduce investment risk. Manufactured HousingHomes and dwellings that are not built at the home site and are moved to the location are considered manufactured housing. Manufactured housing units must be built on a permanent chassis at a factory and then transported to a permanent site and attached to a foundation. All manufactured homes must be built to meet standards set forth by the U.S. Department of Housing and Urban Development (HUD). The standards focus on such aspects as design, strength, energy efficiency, and fire resistance. Manufactured housing represents one of the fastest-growing housing markets in the United States. Nearly all of the mortgage products are available for owners of manufactured housing. MarginFor 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. Margin (also known as Spread)The number of percentage points the lender adds to the index rate to calculate the ARM interest rate at each adjustment. Market approachThe process of comparing the subject property to equivalent properties sold recently to arrive at an estimate of value for a property being appraised. Market interest rateInterest rate currently demanded by lenders and investors. Market rentThe current rent that real estate would bring if available for rent. Market ValueYou can get a good feel for the market value of a home by asking whether the listing agent compiled a "comparative market analysis" (CMA). This written report on the property examines comparable homes in the area that have recently been sold, are currently on the market, or are currently under contract. The CMA will help you figure out whether the asking price is in line with other comparable houses in the neighborhood. Marketable titleA title that is free and clear of objectionable liens, clouds, or other title defects. A title which enables an owner to sell his property freely to others and which others will accept without objection. Master AssociationA 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. MaturityThe date on which the principal balance of a loan, bond, or other financial instrument becomes due and payable. Maximum Claim AmountYour maximum claim amount is the lesser of two figures: (1) Your home's appraised value; (2) HUD 203(b) limit. The HUD 203(b) limit is the maximum loan amount that FHA will insure for residences in your geographical area. Check with your lender to get the latest figures for your area. Maximum FinancingA 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. Meander lineThe approximate border of a natural body of water. MeanderedArea such as a lake on which taxes are not paid. Mechanic's lienA lien that can be filed by mechanics or material suppliers; it is against real property created by statute for the purpose of securing payments for services performed or materials furnished in the construction or repair of buildings or making other improvements to land. Merged Credit ReportA 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. MeridianMap lines running north and south to locate land under the governmental survey system. Metes and boundsA method of legal description using measurements, boundaries, and directions. Mixed-IncomeRefers to a resident mix that includes families with various income levels within one development. Mixed-income developments combine public housing families with other residents in order to decrease the economic and social isolation of these families. ModernizationProgram authorized by the Housing Act of 1937 for upgrading low-rent public housing projects. ModificationThe act of changing any of the terms of the mortgage. Money Market AccountA 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 FundA 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 InstallmentThat 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 housing costsThe total of a homeowner's mortgage loan pay-ment and expenses for utilities, general home repair, and upkeep. Monthly Payment MortgageA mortgage that requires payments to reduce the debt once a month. Your monthly mortgage payment is composed of four components. Principal refers to the part of the monthly payment that reduces the remaining balance of the mortgage. Interest is the fee charged for borrowing money. Taxes and insurance refer to the amounts that are paid into an escrow account each month for property taxes and mortgage and hazard insurance. All four of these elements are often referred to as PITI. Your monthly mortgage payment due may be mailed to you in a book of coupons each year, or in a separate coupon every month. Ask your lender if the automated underwriting system is used, which may reduce costs associated with your mortgage. MoratiumA period of time when a lender may waive interest and/or principal payment on a loan. MortgageA legal document that pledges a property to the lender as security for payment of a debt. Simply put, the mortgage is the legal document that gives the lender a legal claim against your house should you default on your loan payments. The mortgage indicates that a specific amount of money will be loaned at a specific interest rate so that you can buy your home. Another way of thinking of the mortgage is that you have possession of the property but the lender has ownership until you have repaid your loan. The items stated in the mortgage include the homeowner's responsibility to:

Pay principal

Pay interest

Pay taxes

Pay insurance on time

Pay to maintain hazard insurance on the property

Adequately maintain the property

The mortgage also includes the basic information found in the note. Should you consistently fail to meet these requirements, your lender can seek full repayment of the balance of the loan, foreclose on the property, or sell the property and use the proceeds to pay off the loan balance and foreclosure costs.A deed of trust is used instead of a mortgage in some states.Comments: Need Help? Mortgage agreementA document signed by a borrower and a lender giving the lender the right to take the borrower's house if the borrower does not repay the loan. Mortgage BankerA company that originates mortgages exclusively for resale in the secondary mortgage market. Mortgage companies originate and service mortgages. In other words, they make loans to consumers. Mortgage companies then typically sell these loans to other lenders and investors. Some mortgage companies may be subsidiaries of depository institutions or their holding companies but do not receive money from individual depositors. Mortgage Bankers Association of AmericaNational organization which seeks to improve mortgage practices and marketing activities. Mortgage Banking CompaniesMortgage companies originate and service mortgages. In other words, they make loans to consumers. Mortgage companies then typically sell these loans to other lenders and investors. Some mortgage companies may be subsidiaries of depository institutions or their holding companies but do not receive money from individual depositors. Mortgage BrokerAn 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. The National Association of Mortgage Brokers defines a mortgage broker as "an independent real estate financing professional who specializes in the origination of residential and/or commercial mortgages." There are an estimated 20,000 mortgage brokerage operations from coast to coast. They originate more than half of the residential loans in the U.S. A mortgage broker has professional expertise that can assist mortgage seekers in finding the best loan for them. The mortgage broker is also experienced in offering many applicable financing options for a consumer's specific needs. Mortgage commitmentA written notice from the bank or other lending institution saying it will advance mortgage funds in a specified amount to enable a buyer to purchase a house. Mortgage InsuranceA 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. Mortgage Insurance PremiumThe 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 insurance premium (MIP)The fee paid by a borrower to FHA or a private insurer for mortgage insurance. Mortgage interest rateThe rate of interest in effect for the monthly payment due. Mortgage Life InsuranceA 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. Mortgage marginThe set percentage the lender adds to the index value to determine the interest rate of an ARM. Mortgage noteA legal document obligating a borrower to repay a loan at a stated interest rate during a specified period of time-, the mortgage note is secured by a mortgage. Mortgage note (also none as Promissory NMortgage note (also none as Promissory Note or Note) A written agreement to repay a loan. The agreement is secured by a mortgage, serves as proof of an indebtedness, and states the manner in which it shall be paid. The note states the actua l amount of the debt that the mortgage secures and renders the mortgagor personally responsible for repayment. Mortgage-Related Closing CostsMortgage-related closing costs generally are costs associated with your loan application. They vary, but here are some of the most common ones:

Loan origination fee: covers the administrative costs of processing the loan.

Loan discount points: These points are additional funds you pay the lender at closing to get a lower interest rate on your mortgage. Typically, each point you pay for a 30-year loan lowers your interest rate by .125 of a percentage point.

Appraisal fee: pays for the appraisal, which the lender uses to determine whether the value of the property secures the loan should you default. The buyer usually pays this fee.

Credit report fee: covers the cost of the credit report.

Assumption fee: charged if you take over the payments on the seller's existing loan.

Prepaid interest: You are charged interest when you borrow money from a lender, and you will pay interest on the mortgage amount from the date of settlement to the beginning of the period covered by the first monthly mortgage payment. At closing, you may be required to pay in advance the interest for the period.

Escrow accounts: Also called reserves, these accounts are required if your lender will be paying your homeowner's insurance and property taxes.

 MortgageeThe lender in a mortgage agreement. MortgagorThe borrower in a mortgage agreement. Multidwelling UnitsProperties that provide separate housing units for more than one family, although they secure only a single mortgage. Multifamily MortgageA residential mortgage on a dwelling that is designed to house more than four families, such as a high-rise apartment complex. Multiple listingSharing of property sales listings by a number of real estate brokers with an agreement as to how the costs and commissions are to be split. Mutual Mortgage Insurance Fund (MMI)One of four separate funds within the FHA Fund; provides funds for home mortgage insurance. National Association of Home BuildersAn organization which represents home builders at all levels of government and provides information on new developments in the housing industry. It is also responsible for initiating the Homeowners Warranty Corporation which provides a guarantee of workmanship in residential homes. National Association of Housing and RedeAn organization which develops new techniques related to the finance, design, construction and management of housing. The NAHRO also plays a key role by consulting with Federal Agencies and the Congress on U.S. housing policy. National Association of Real Estate BrokThe oldest minority trade association in America founded in 1947 on the principle that all citizens have the right to equal housing opportunities, regardless of race, creed, or color. Internet Site: www.nareb.com National Association of Realtors (NAR)An organization which represents the interests of realtors and promotes education, professional standards, and modern techniques in real estate practices. National Tenants Organization (NTO)Organization which represents tenants in subsidized housing. Navigable waterA waterway capable of passage by watercraft; navigable if so designated by a U.S. or state map. Negative AmortizationA 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. Negative leverageSituation where the cost of funds exceeds the rate of return on the real estate. Net Cash FlowThe 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 leaseA lease agreement in which the tenant pays rent plus all taxes, insurance, repairs and other costs. Net Operating Income (NOI)The property gross earnings less the operating expenses, but before interest and depreciation expenses are deducted. Net Present Value (NPV)The sum of the present values of all future cash flows netted against the initial investment, discounted at a given rate. Net WorthThe value of all of a person's assets, including cash, minus all liabilities. Net-Net-Net Lease (NNN)See tripple net lease. No Cash-Out RefinanceA 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). Nominal interest rateThe interest rate stipulated in an agreement. Non-recurring closing costsSee Closing costs. Nonconforming useA use of land that lawfully existed before a zoning ordinance that is legally continued after the effective date of the ordinance, even though the use no longer conforms to the new zoning regulations. Nonliquid AssetAn asset that cannot easily be converted into cash. Nontraditional credit historyA record of credit performance shown with receipts and bill and check stubs from payments to landlords, utility companies, child-care providers, and others. A method for loan applicants who do not have a credit history from, for example, car-loan or credit card payments. NoteA legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time. One way to think of the mortgage note is that it is a legal "IOU." Often called the promissory note, it represents your promise to pay the lender according to the agreed upon terms of the loan, including when and where to send your payment. The note lists any penalties that will be assessed if you don't make your monthly mortgage payments. It also warns you that the lender can "call" the loan -- demand repayment of the entire loan before the end of the term -- if you violate the terms of your mortgage. Note RateThe interest rate stated on a mortgage note. Notice of DefaultA formal written notice to a borrower that a default has occurred and that legal action may be taken. NuisanceThe wrongful interference by one person with the use and enjoyment of real estate owned by another. Occupancy DateThis provision is a good way to help ensure that your home will be ready for occupancy after the closing takes place. As part of your formal purchase offer, consider including a provision that holds the seller responsible for paying you rent should they not move out on or prior to the agreed-upon date. This allows you, for example, to use the money you receive to pay your own rent if you are leasing your current residence. OfferWhen you make an offer on a house, it means you are making a formal bid to buy a home. You can work with your real estate sales professional to put together a written bid that abides by the laws in your state. Your offer should include such aspects as the address of the home, the sales price, the type of mortgage financing you will use to purchase the home, any personal property that might be included as part of the sale, and a target date for closing and occupancy. An earnest money deposit typically accompanies the offer. Your real estate sales professional can provide guidance on other elements of the offer. Once you have made an offer, the seller has the opportunity to accept, decline, or make a counter-offer. If your offer is accepted, you have a ratified sales contract. This contract is the starting point for working with an approved lender to get the mortgage that's right for you. One-Year Adjustable-Rate MortgageThis adjustable-rate mortgage (ARM) offers a low initial interest rate with an interest rate that adjusts annually after the first year. The rate cap per annual adjustment is usually 2 percent; the lifetime adjustment caps can be 5 percent or 6 percent. This type of mortgage may be right for you if you anticipate a rapid increase in income over the first few years of your mortgage. That's because it lets you maximize your purchasing power immediately. It may also be the right mortgage for you if you plan to live in your home for only a few years. Advantages:

Maximizes your buying power immediately, especially if you expect your income to rise quickly in the next few years.

A low first-year interest rate and a 2 percent annual rate cap.

Some one-year ARMs let you convert to a fixed-rate loan at certain adjustment intervals.

 Ongoing CostsHome buyers should not forget that there are on-going costs associated with owning a home. They include, but are not limited to:

Monthly mortgage payment

Mortgage insurance

Homeowner's insurance

Property taxes

Utilities, such as gas, oil, water and electricity

Another cost home buyers should consider is how much it will cost to maintain their home. These costs include everything from cleaning and minor repairs to yard work and painting. Condominium owners and people living in planned unit developments should factor in any homeowners' association fees or similar costs. Open-end mortgageA mortgage that provides for the borrowing of additional funds. Operating expensesSuch as real estate taxes, insurance premiums, etc. Operating ratioRatio of operating expenses to effective gross income. Opportunity costThe "cost" of selecting one alternative is the benefit foregone from the next best alternative. OptionA Contract given by the owner of a property to another person, giving the latter a right to buy or lease the property at a certain price within a specified period of time. OptioneeA person who holds an option. OptionorAn owner who gives an option to another person. Original Principal BalanceThe total amount of principal owed on a mortgage before any payments are made. OriginationThe process that a lender goes through to get complete and correct informa-tion about a loan applicant's income and credit. Origination FeeA fee paid to a lender for processing a loan application. The origination fee is stated in the form of points. One point is 1 percent of the mortgage amount. The loan origination fee covers the administrative costs of processing the loan. It is often expressed in points. One point is 1 percent of the mortgage amount. For example, a $100,000 mortgage with a loan origination fee of 1 point would mean you pay $1,000. OverhangThe portion of a roof extending beyond the walls. Owner FinancingA property purchase transaction in which the property seller provides all or part of the financing. Package mortgageA mortgage that includes personal property as part of the security. Partial PaymentA payment that is not sufficient to cover the scheduled monthly payment on a mortgage loan. Partially amortizedThe payments do not repay the loan over its term and thus a lump sum mortgage loan (balloon) is required to repay the loan. Participation mortgageA loan in which two or more lenders participate. PartnershipAn association of two or more persons to carry on a business for profit as co-owners. Party wallA wall erected on the line between two adjacent properties for the use of both parties. Payment capA provision of some ARMs limiting the amount by which a borrower's payments may increase regardless of any interest rate increase; may result in negative amortization. See Adjustable-rate mortgage. Payment Change DateThe date when a new monthly payment amount takes effect on an adjustable-rate mortgage (ARM) or a graduated-payment adjustable-rate mortgage (GPARM). Generally, the payment change date occurs in the month immediately after the adjustment date. Percentage leaseA lease in which the rent amount is based on a percentage of gross sales (monthly or annually) made by the tenant. Percentage rentThe additional rent (over a base amount) paid by tenants to owners based on tenant sales over a specified dollar amount. 

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