Joint tenancy A form of
co-ownership that gives each tenant equal interest and equal rights in
the property, including the right of survivorship.
Judgment A decision made by a court of law. In judgments
that require the repayment of a debt, the court may place a lien against
the debtor's real property as collateral for the judgment's creditor.
Judgment lien A lien on the property of a debtor resulting
from the decree of a court.
Judicial foreclosure A type of foreclosure proceeding used
in some states that is handled as a civil lawsuit and conducted entirely
under the auspices of a court.
Jumbo loan A loan that exceeds Fannie Mae’s legislated
mortgage amount limits. Also called a nonconforming loan.
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.
Top of page
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.
Top of page
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.
Multi-dwelling 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.
Negative amortization A gradual
increase in mortgage debt that occurs when the monthly payment is not
large enough to cover the entire principal and interest due. The amount
of the shortfall is added to the remaining balance to create "negative"
amortization.
Net cash flow The income that remains for an investment
property after the monthly operating income is reduced by the monthly
housing expense, which includes principal, interest, taxes, and
insurance (PITI) for the mortgage, homeowners' association dues,
leasehold payments, and subordinate financing payments.
Top of page
Net operating income Sellers and their agents, typically arrive
at the advertised NOI by using gross scheduled rents and ignoring
deductions for such things as uncollected rent, vacancies, redecorating,
adjustments for deferred maintenance and management costs.
Net worth The value of all of a person's assets, including
cash, minus all liabilities.
No cash-out refinance A refinance transaction in which the
new mortgage amount is limited to the sum of the remaining balance of
the existing first mortgage, closing costs (including prepaid items),
points, the amount required to satisfy any mortgage liens that are more
than one year old (if the borrower chooses to satisfy them), and other
funds for the borrower's use (as long as the amount does not exceed 1
percent of the principal amount of the new mortgage).
Non-liquid asset An asset that cannot easily be converted
into cash.
Note A legal document that obligates a borrower to repay a
mortgage loan at a stated interest rate during a specified period of
time.
Note rate The interest rate stated on a mortgage note.
Notice of default A formal written notice to a borrower
that a default has occurred and that legal action may be taken
|
