The amount or percentage added to the index at each adjustment to determine the borrower's new interest rate. Margins are generally fixed for the term of the loan and are based on the lender's estimated expenses and profit goals. Index rate + Margin = Interest Rate.
The price a property brings in a given market. Commonly used interchangeably with market value, although not truly the same.
The highest price a willing buyer would pay and a willing seller accept, both being fully informed and the property exposed for a reasonable period of time. The market value may be different from the price a property can actually be sold for at a given time.
(1) Termination period of a note. For example, a 30 year mortgage has a maturity of 30 years.
(2) The date a note becomes due.
The market for short-term debt instruments. Money market investments include Treasury bills, short-term certificates of deposit, commercial paper, and other, similar instruments.
Money Market Funds
Refers to mutual funds investing solely in money market instruments.
A loan made to help the borrower buy a house or land. The lender of a mortgage then holds the title to the house until the borrower pays off the agreed upon amount.
The party lending the money and receiving the mortgage. Some state treat the mortgagee as the "legal" owner, entitled to rents from the property. Other states treat the "mortgagee" as a secured creditor, the mortgagor being the owner. The latter is the more modern and accepted view.
Either private or government which insures a mortgage lender against loss caused by a mortgagor's default. This insurance may cover part or all of the mortgage loan depending on the type of mortgage insurance.
Mortgage Insurance Premium
The consideration paid by a mortgagor for mortgage insurance either to FHA or a private mortgage insurance (PMI) company.
Any person or institution that invests in mortgages. By buying mortgage loans from lenders, the mortgage investor gives the lender funds that can be used for more lending.
Mortgage Life Insurance
A type of term life insurance. The amount of coverage decreases as the mortgage balance declines. In the event that the borrower dies while the policy is in force, the debt is automatically paid by insurance proceeds.
The party who borrows the money and gives the mortgage.
(1) A building occupied by more than one family.
(2) A building designed as a dwelling for more than one families at the same time.
An investment company that enables investors to pool their funds in order to invest in a managed portfolio of securities.