Laguna Beach Mortgage

949-495-5885

 

Mortgage Glossary

Use this glossary to look up definitions of mortgage terms.

The definitions given here explain how the terms are used in the field of real estate finance.

 

A   B   C   D    E    F   G   H   I   J   K   L   M   N   O   P   Q   R   S   T   U   V   W   X   Y   Z

 
 
Margin
The amount a lender adds to the index on an adjustable rate mortgage to establish the adjusted interest rate.
Market Value
The highest price that a buyer would pay and the lowest price a seller would accept on a property. Market value may be different from the price a property could actually be sold for at a given time.
MIP
Mortgage insurance premium. Most often used to refer to the fee charged for FHA insurance coverage. The initial FHA premium is referred to as the OTMIP (one-time MIP) or the UFMIP (up-front MIP).
Mobil/Manufactured
Homes which are not truly mobil but are constructed in the same manner as trailers, as opposed to conventional on-site construction.
Mortgage Broker
An intermediary who brings real estate lenders and borrowers together and negotiates loan agreements between them.
Mortgage Company
A type of real estate lender that originates and services loans on behalf of large investors (acting as a mortgage banker) or for immediate resale on the secondary market; not a depository financial institution.
Mortgage Insurance
Insurance against losses resulting from mortgage default; if the borrower defaults and the lender takes a loss, the insurer will reimburse the lender for all or part of the loss.
Mortgage Loan
A loan secured by a mortgage or a deed of trust.
Mortgagee
The one who receives a mortgage from the mortgagor; the lender.
Negative Amortization
Occurs when your monthly payments are not large enough to pay all the interest due on the loan. This unpaid interest is added to the unpaid balance of the loan. The danger of negative amortization is that the home buyer ends up owing more than the original amount of the loan.
Net Worth
An individual's personal financial assets, minus his or her total personal liabilities.
Nonconforming Loan
A loan that does not meet the underwriting guidelines set by Fannie Mae and Freddie Mac, and therefore can't be sold to those agencies, except by special arrangement.
Note Rate
The interest rate specified in the loan's promissory note; also called the coupon rate or the contract rate.
Notice of Default
A notice sent by a lender (mortgagee or deed of trust beneficiary) to the borrower, informing the borrower that he or she has breached the terms of the loan agreement and warning that the lender is going to begin the foreclosure process.