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Real Estate Glossary

Real Estate Glossary
Glossary of real estate terms

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Term	Definition
Managing risk	The steps taken by an investor or manager to control or reduce investment risk.

Manufactured Housing	Homes 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.

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.

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 approach	The 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 rate	Interest rate currently demanded by lenders and investors.

Market rent	The current rent that real estate would bring if available for rent.

Market Value	You 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 title	A 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 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 Claim Amount	Your 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 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.

Meander line	The approximate border of a natural body of water.

Meandered	Area such as a lake on which taxes are not paid.

Mechanic's lien	A 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 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.

Meridian	Map lines running north and south to locate land under the governmental survey system.

Metes and bounds	A method of legal description using measurements, boundaries, and directions.

Mixed-Income	Refers 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.

Modernization	Program authorized by the Housing Act of 1937 for upgrading low-rent public housing projects.

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 housing costs	The total of a homeowner's mortgage loan pay-ment and expenses for utilities, general home repair, and upkeep.

Monthly Payment Mortgage	A 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.

Moratium	A period of time when a lender may waive interest and/or principal payment on a loan.

Mortgage	A 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 agreement	A 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 Banker	A 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 America	National organization which seeks to improve mortgage practices and marketing activities.

Mortgage Banking Companies	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 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. 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 commitment	A 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 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.

Mortgage Insurance Premium	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 insurance premium (MIP)	The fee paid by a borrower to FHA or a private insurer for mortgage insurance.

Mortgage interest rate	The rate of interest in effect for the monthly payment due.

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.

Mortgage margin	The set percentage the lender adds to the index value to determine the interest rate of an ARM.

Mortgage note	A 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 N	Mortgage 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 Costs	Mortgage-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.

Mortgagee	The lender in a mortgage agreement.

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.

Multiple listing	Sharing 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.

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