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Online Loan Glossary
M
Margin: an amount the
lender adds to an index to determine the interest rate
on an adjustable rate mortgage.
Margin: The number of
percentage points the lender adds to the index rate to
calculate the ARM interest rate at each adjustment.
Margin: The number of percentage points the lender adds
to the index rate to determine the annual percentage
rate.
Minimum- payment: The
minimum amount that you must pay (usually monthly) on
your account. Under some plans, the minimum payment may
cover interest only; under others, it may include both
principal and interest.
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 insurance premium (MIP): a monthly payment -usually part of the mortgage payment
- paid by a borrower for mortgage insurance.
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.
Mortgage Modification: a
loss mitigation option that allows a borrower to
refinance and/or extend the term of the mortgage loan
and thus reduce the monthly payments.
Mortgage: a lien on the
property that secures the Promise to repay a loan.
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Online Loan Glossary
N
National Insurance:A form of tax on salary which funds state
benefits.
National Savings & Investments:The government savings scheme.
Negative Amortization:Amortization means that monthly payments
are large enough to pay the interest and reduce the
principal on your mortgage. Negative amortization occurs
when the monthly payments do not cover all the interest
cost. The interest cost that isn’t covered is added to
the unpaid principal balance. This means that even after
making many payments, you could owe more than you did at
the beginning of the loan. Negative amortization can
occur when an ARM has a payment cap that results in
monthly payments not high enough to cover the interest
due.
Negative Equity:You are considered to be in negative
equity if the money you owe on your mortgage is greater
than the value of your property.
Net Interest:Interest earned once basic level tax has
been deducted.
Notice Accounts:These accounts require notice to be given
to withdraw funds to avoid any penalty, such as loss of
interest.
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