Real Estate Glossary

M

Margin
The set percentage a lender adds to the index to determine the current interest rate on an adjustable-rate mortgage (ARM).

Market Value
The most likely price a given property will bring if widely exposed on the market, assuming a fully informed buyer and seller.

Marketable Title
Title that is free of liens, clouds on title and legal defects.

Mechanics Lien
A lien created by statute for the purpose of securing priority of payment for the value of work performed and materials furnished in the construction or repair of improvements to real property. The lien is attached to the land as well as the improvements.

Modular Home
A factory assembled residence built in units or sections, transported to a permanent site and erected on a foundation. The term excludes mobile homes.

Mortgage
A lien or claim against real property given as security for a loan.

Mortgage- Backed Security
Bond-type investment security representing undivided interest in a pool of mortgages or deeds of trust.

Mortgage Banker
A firm that originates mortgages for sale to investors in the secondary market.

Mortgage Broker
A professional that helps consumers through the loan selection, processing, and closing of a mortgage loan. Most mortgage brokers have access to a wide range of mortgage products through many mortgage lenders.

Mortgage Disability Insurance
A disability insurance policy which will pay the monthly mortgage payment in the event of a covered disability of an insured borrower for a specified period of time.

Mortgage Insurance (MI)
Insurance written by an independent mortgage insurance company protecting the mortgage lender against loss incurred by mortgage default. Usually required for loans with a LTV of 80.01% or higher.

Mortgagee
The person or company who receives the mortgage as a pledge for repayment of the loan. Also known as the mortgage lender.

Mortgagee Clause
An insurance policy provision for payment of a claim to the mortgagee (lender) on a property rather than the named insured (owner) in the policy.

Mortgage Note
Legal documents obligating a borrower to repay a loan at a stated interest rate during a specified term. The note is secured by a mortgage.

Mortgage Warehousing
A funding facility that is used by mortgage companies to fund loans which are then sold to an investor shortly thereafter. The mortgage notes are used as collateral for this interim financing.

Mortgagor
The mortgage borrower who gives the mortgage as a pledge to repay.