Manufactured Housing
Homes and
dwellings that are not built at the home site and are moved to the
location are considered manufactured housing. Manufactured housing units
must be built on a permanent chassis at a factory and then transported to
a permanent site and attached to a foundation. All manufactured homes must
be built to meet standards set forth by the U.S. Department of Housing and
Urban Development (HUD). The standards focus on such aspects as design,
strength, energy efficiency, and fire resistance.
Manufactured housing represents one of the fastest-growing housing markets
in the United States. Nearly all of the mortgage products are available
for owners of manufactured housing.
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.
Market Value
You can get
a good feel for the market value of a home by asking whether the listing
agent compiled a "comparative market analysis" (CMA). This written report
on the property examines comparable homes in the area that have recently
been sold, are currently on the market, or are currently under contract.
The CMA
will help you figure out whether the asking price is in line with other
comparable houses in the neighborhood.
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 Claim Amount
Your
maximum claim amount is the lesser of two figures:
-- Your
home's appraised value.
-- HUD 203(b) limit.
The HUD
203(b) limit is the maximum loan amount that FHA will insure for
residences in your geographical area. Check with your lender to get the
latest figures for your area.
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.
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.
Your
monthly mortgage payment is composed of four components.
Principal
refers to the part of the monthly payment that reduces the remaining
balance of the mortgage.
Interest is
the fee charged for borrowing money.
Taxes and
insurance refer to the amounts that are paid into an escrow account each
month for property taxes and mortgage and hazard insurance.
All four of
these elements are often referred to as PITI.
Your
monthly mortgage payment due may be mailed to you in a book of coupons
each year, or in a separate coupon every month.
Ask your
lender if the automated underwriting system is used, which may reduce
costs associated with your mortgage.
Mortgage
A legal
document that pledges a property to the lender as security for payment of
a debt.
Simply put,
the mortgage is the legal document that gives the lender a legal claim
against your house should you default on your loan payments. The mortgage
indicates that a specific amount of money will be loaned at a specific
interest rate so that you can buy your home. Another way of thinking of
the mortgage is that you have possession of the property but the lender
has ownership until you have repaid your loan.
The items
stated in the mortgage include the homeowner's responsibility to:
-- pay
principal
-- pay interest
-- pay taxes,
-- pay insurance on time,
-- pay to maintain hazard insurance on the property, and
-- adequately maintain the property.
The
mortgage also includes the basic information found in the note.
Should you
consistently fail to meet these requirements, your lender can seek full
repayment of the balance of the loan, foreclose on the property, or sell
the property and use the proceeds to pay off the loan balance and
foreclosure costs.
A deed of
trust is used instead of a mortgage in some states.
Mortgage Banker
A company
that originates mortgages exclusively for resale in the secondary mortgage
market.
Mortgage
companies originate and service mortgages. In other words, they make loans
to consumers. Mortgage companies then typically sell these loans to other
lenders and investors.
Some
mortgage companies may be subsidiaries of depository institutions or their
holding companies but do not receive money from individual depositors.
Mortgage Banking Companies
Mortgage
companies originate and service mortgages. In other words, they make loans
to consumers. Mortgage companies then typically sell these loans to other
lenders and investors.
Some
mortgage companies may be subsidiaries of depository institutions or their
holding companies but do not receive money from individual depositors.
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
National Association of Mortgage Brokers defines a mortgage broker as "an
independent real estate financing professional who specializes in the
origination of residential and/or commercial mortgages."
There are
an estimated 20,000 mortgage brokerage operations from coast to coast.
They originate more than half of the residential loans in the U.S.
A mortgage
broker has professional expertise that can assist mortgage seekers in
finding the best loan for them. The mortgage broker is also experienced in
offering many applicable financing options for a consumer's specific
needs.
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.
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.
Mortgage-Related Closing Costs
Mortgage-related closing costs generally are costs associated with your
loan application. They vary, but here are some of the most common ones:
-- Loan
origination fee: This fee covers the administrative costs of processing
the loan. It may be expressed as a percentage of the loan (for example, 1
percent of the mortgage amount).
-- Loan discount points: These points are additional funds you pay the
lender at closing to get a lower interest rate on your mortgage.
Typically, each point you pay for a 30-year loan lowers your interest rate
by .125 of a percentage point. If the current interest rate on a no-point,
30-year mortgage is 7.75 percent, paying one point would lower the
interest rate to 7.625. Each point is one percent of the mortgage (for
example, if your mortgage is $200,000, one point equals $2,000).
-- Appraisal fee: This fee pays for the appraisal, which the lender uses
to determine whether the value of the property secures the loan should you
default. The home buyer usually pays this fee. It may appear on the
settlement form as "POC," or "paid outside closing."
-- Credit report fee: This covers the cost of the credit report, which the
lender uses to determine your creditworthiness.
-- Assumption fee: This fee is charged if you take over the payments on
the seller's existing loan. It may range from hundreds of dollars to one
percent of the loan amount.
-- Prepaid interest: You are charged interest when you borrow money from a
lender, and you will pay interest on the mortgage amount from the date of
settlement to the beginning of the period covered by the first monthly
mortgage payment. At closing, you may be required to pay in advance the
interest for the period.
-- Escrow accounts: Also called reserves, these accounts are required if
your lender will be paying your homeowner's insurance and property taxes.
Your lender sets up the escrow account by adding the cost of the insurance
and taxes to your monthly mortgage payments. It is kept in reserve until
the bills are due. The bills are sent directly to your lender, who makes
the payments for you.
Mortgagee
The lender
in a mortgage agreement.
Mortgagor
The
borrower in a mortgage agreement.
Multidwelling Units
Properties
that provide separate housing units for more than one family, although
they secure only a single mortgage.
Multifamily Properties
We provide
financing for multifamily (buildings with five or more units) rental
properties through a nationwide network of mortgage lenders.
Multifamily Mortgage
A
residential mortgage on a dwelling that is designed to house more than
four families, such as a high-rise apartment complex.
Multifamily Properties
We provide
financing for multifamily (buildings with five or more units) rental
properties through a nationwide network of mortgage lenders.
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