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
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.
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.
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
A mutual fund that allows individuals to participate in managed
investments in short-term debt securities, such as certificates
of deposit and Treasury bills.
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.
A mortgage that requires payments to reduce the debt once
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
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.
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
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 complex.
Mae provides financing for multifamily (buildings with five
or more units) rental properties through a nationwide network
of mortgage lenders.