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Loanfactz DefinitionsGlossary of Legal Terms, Loan Terms and Home Construction, Repair and Maintenance Definitions. Some words have more than one meaning. Only those meanings relating to this site will be used.
Margin The number of percentage points the lender adds to the index rate to calculate the interest rate on an adjustable rate mortgage. Market Value Independently appraised value of real estate in a free competitive market. The highest price a buyer would pay and the lowest price a seller would accept, assuming that both were willing but not compelled to do so. Minimum Payment The smallest dollar amount you must pay, usually each month, on your loan account or credit card account. The minimum payment may cover interest only, or it may include both principal and interest. Monetary Involving or relating to money. Mortgage A mortgage is a legal document you sign to show that you have granted the lender a lien on your property as security for repayment of a loan, giving the lender the right to take your property if you default on the terms of the loan. Some states call it a deed of trust instead of a mortgage. Mortgage Banker Company that uses its own money to provide home loans and then usually sells them to investors (insurance companies) and Fannie Mae. Mortgage Broker A person or company engaged in the arrangement of mortgages for buyers. The broker is usually paid a commission by the lender. More about Mortgage Brokers Mortgage Insurance (MI) Mortgage Insurance (MI) or called Private Mortgage Insurance (PMI) is insurance needed for a mortgage loan with a low down payment, usually less than 20% of the price of the home or, in a refinancing, when the amount financed is greater than 80% of the appraised value of the home. Mortgage Insurance protects lenders against loss if a borrower defaults on the loan. Private mortgage insurance is provided by a private mortgage insurance company, is paid by the borrower (you), and is included in the borrowers monthly mortgage payments. More about PMI (Private Mortgage Insurance) Mortgage Insurance Premium Mortgage Insurance Premium is a monthly payment, usually part of the mortgage loan payment, paid by the borrower (you) for Mortgage Insurance (MI). Mortgage Lender The lender providing funds for a mortgage. Lenders also manage the credit and financial information review, the property and the loan application process through closing. Mortgage Life Insurance Mortgage Life Insurance is designed to pay off the remaining balance of a home mortgage loan if the borrower dies. This is to protect the survivors from the loss of their home. Mortgage Loan A mortgage loan is money you borrow from a lender to finance the purchase of real estate - the land, house, and all other buildings. Mortgage Note A mortgage note is a legally binding contract you sign when you get a home mortgage loan. It lists the conditions under which you are borrowing and the terms under which you agree to pay back the loan, for example, you borrow a specified sum of money at a specified interest rate to be paid over a fixed period of time. It is also called a note or a promissory note. Mortgage Rate The cost or the interest rate you pay to borrow the money to buy your house. Mortgagee The lender in a mortgage loan transaction. Mortgagor The borrower in a mortgage loan transaction. Mutual Funds A fund that pools the money of its investors to buy a variety of securities. |
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