1 Glossary

Margin: A percentage added to the index

Mortgage Insurance Premium (MIP):

for an adjustable-rate mortgage (ARM) to

The amount paid by a borrower for

establish the interest rate on each ad-

mortgage insurance, either to a govern-

justment date.

ment agency such as the Federal Hous-

ing Administration (FHA) or to a private

Market Value: The current value of your

mortgage insurance (PMI) company.

home based on what a purchaser would

Mortgage Lender: The lender providing

pay. An appraisal is sometimes used to

determine market value.

funds for a mortgage. Lenders also man-

age the credit and financial information

Maturity Date: The date on which a

review, the property and the loan appli-

mortgage loan is scheduled to be paid in

cation process through closing.

full, as stated in the note.

Mortgage Life Insurance: A type of

Merged Credit Report: A credit report

insurance that will pay off a mortgage if

issued by a credit reporting company

the borrower dies while the loan is out-

that combines information from two or

standing; a form of credit life insurance.

three major credit bureaus.

Mortgage Rate: The interest rate you

Modification: Any change to the terms

pay to borrow the money to buy your

of a mortgage loan, including changes to

house.

the interest rate, loan balance, or loan

Mortgagee: The institution or individual

term.

to whom a mortgage is given.

Money Market Account: A type of in-

Mortgagor: The owner of real estate who

vestment in which funds are invested in

short-term securities.

pledges property as security for the re-

payment of a debt; the borrower.

Mortgage: A loan using your home as

Multifamily Mortgage: A mortgage loan

collateral. In some states the term mort-

gage is also used to describe the docu-

on a building with five or more dwelling

ment you sign (to grant the lender a lien

units.

on your home). It also may be used to

Multifamily Properties: Typically,

indicate the amount of money you bor-

row, with interest, to purchase your

buildings with five or more dwelling

house. The amount of your mortgage

units.

often is the purchase price of the home

Multiple Listing Service (MLS): A

minus your down payment.

clearinghouse through which member

Mortgage Broker: An individual or firm

real estate brokerage firms regularly and

that brings borrowers and lenders to-

systematically exchange information

gether for the purpose of loan origina-

on listings of real estate properties and

tion. A mortgage broker typically takes

share commissions with members who

loan applications and may process

locate purchasers. The MLS for an area

loans. A mortgage broker also may close

is usually operated by the local, private

the loan.

real estate association as a joint venture

among its members designed to foster

Mortgage Insurance (MI): Insurance

real estate brokerage services.

that protects lenders against losses

Mutual Funds: A fund that pools the

caused by a borrower's default on a

mortgage loan. MI typically is required

money of its investors to buy a variety of

if the borrower's down payment is less

securities.

than 20 percent of the purchase price.