The Glossary Mortgage Terminology

Del Financial's Glossary consists of the more commonly used definitions, meanings, and descriptions used within the mortgage and real estate industry. As always, if you have any questions, please call us at (800) 469-5861.

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Margin
the number of percentage points the lender adds to the index rate to calculate the ARM interest rate at each adjustment.
Market Value
the amount a willing buyer would pay a willing seller for a home. An appraised value is an estimate of the current fair market value.
Maturity
the date when the principal balance of a loan becomes due and payable.
Modification
when a lender agrees to modify the terms of a mortgage without refinancing the loan.
Mortgage
a lien on the property that secures the Promise to repay a loan. A security agreement between the lender and the buyer in which the property is collateral for the loan. The mortgage gives the lender the right to collect payment on the loan and to foreclose if the loan obligations are not met.
Mortgage Banker
a company that originates loans and resells them to secondary mortgage lenders like Fannie Mae or Freddie Mac.
Mortgage Broker
a firm that originates and processes loans for a number of lenders.
Mortgage Life and Disability Insurance
term life insurance bought by borrowers to pay off a mortgage in the event of death or make monthly payments in the case of disability. The amount of coverage decreases as the principal balance declines. There are many different terms of coverage determining amounts of payments and when payments begin and end.
Mortgage Insurance
a policy that protects lenders against some or most of the losses that can occur when a borrower defaults on a mortgage loan; mortgage insurance is required primarily for borrowers with a down payment of less than 20% of the home's purchase price. The cost of mortgage insurance is usually added to the monthly payment. Mortgage insurance is maintained on conventional loans until the outstanding amount of the loan is less than 80 percent of the value of the house or for a set period of time (7 years is common).
Mortgage Insurance Premium (MIP)
a monthly payment -usually part of the mortgage payment - paid by a borrower for mortgage insurance.
Mortgage Interest Deduction
the interest cost of a mortgage, which is a tax - deductible expense. The interest reduces the taxable income of taxpayers.
Mortgagee
the lender in a mortgage agreement.
Mortgagor
the borrower in a mortgage agreement
Multifamily Housing
a building with more than four residential units.
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