Real Estate Glossary

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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 (MI).

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.