FHA Loan and Mortgage Glossary - Terms Beginning with 'M'

  • Margin: This is the percentage amount that a lender will add to the index interest rate in order to determine what interest rate will be charged on adjustable rate mortgage loans.
  • Market Value: This is the property value at a current rate of sale. If the real estate market is growing in an area the market value could increase daily. This value represents what a buyer would pay for a property in a certain area, and what the seller would sell it for.
  • Mortgage: This is a legal contract between a lender and a borrower where the lender offers a specified amount of money to the borrower providing that the borrower agrees to the terms of the loan, and a lien is held on the property until the debt has been fully paid.
  • Mortgage Broker: This is a person or company that assists a borrower in obtaining a mortgage in exchange for a fee or commission.
  • Mortgage Disability Insurance: This is an insurance policy for homeowners that allow for their mortgage to get paid in the case they become sick or disabled.
  • Mortgage Insurance: This is an insurance policy that is required by some lenders for borrowers who have under a 20% down payment. The insurance guarantees the recovery of the loan in the case the borrower defaults and foreclosure occurs.
  • Mortgage Insurance Premiums: Also known as MIP. This is the amount of money that a borrower must pay at the closing of the loan, and as part of the monthly mortgage payment until they have reached a minimum of 20% equity in the home.
  • Mortgage Modification: This is when a mortgage lender is willing to refinance or extend the term of a loan in order to lower the monthly payments so that a borrower will not have to face foreclosure.
  • Mortgagee: The lender or company that has a lien on the title of a property in return for lending money to the buyer at specified terms.
  • Mortgagor: borrower of a mortgage loan who agrees to the terms of the loan.