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.
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.
The date on which the principal balance of a loan, bond, or other financial instrument becomes due and payable.
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.
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.
A legal document that pledges a property to the lender as security for payment of a debt.
A company that originates mortgages exclusively for resale in the secondary mortgage market.
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 lender in a mortgage agreement.
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
The borrower in a mortgage agreement.
Properties that provide separate housing units for more than one family, although they secure only a single mortgage.
A residential mortgage on a dwelling that is designed to house more than four families, such as a high-rise apartment