Jargon Buster
Maintenance charge
The cost of maintaining and repairing communal parts of
a building.
Maintenance fee
The monthly assessment members of a homeowners association
pay for the repair and maintenance of common areas.
Major defects
Particular features that may affect either the present
value, or the ability to resell the property at a later
date. It will be up to the surveyor to judge what the
urgent and significant matters are that could affect the
market value of the property. Identified in homebuyers
report/ full survey.
Mandatory products
These are supplementary products that some businesses
insist you purchase along with the core thing that you
are buying. This is often buildings insurance, income
protection products or something else that is sometimes
sold in conjunction with a mortgage.
Margin
The lender's "retail markup" on the mortgage. For example,
if the index rate for an adjustable rate mortgage is 5
percent but the lender has a 2.5 percentage-point margin,
the rate the borrower will pay is 7.5 percent.
Market conditions
Factors affecting the sale and purchase of homes at a
particular point in time.
Market value
The price that a piece of property sells for at a particular
point in time.
MIG - Mortgage Indemnity Guarantee
This is insurance for the lender paid by the consumer
in a one-off payment, on 'high' LTV mortgages. This protects
the lender in the event that you default on the loan and
the sale of the property is not enough to repay the amount
that they are owed. Some lenders will insist you pay this
if your mortgage is for as low as 75% of the value of
the property, but 90% is a more common level. Some lenders
will not insist on it regardless of the loan value. You
can often add this fee to the loan, but be aware that
you will then be paying interest on it until the loan
is repaid in full.
Modification
A change in any of the terms of the loan agreement.
Monthly fee
A fee charged once a month.
Monthly repayment
This is the amount you pay to your lender each month towards
the cost of your loan.
Mortgage
The name given to a loan used to buy a property.
Mortgage acceleration clause
A clause which allows a lender to demand that the entire
balance of the loan be repaid in a lump sum under certain
circumstances. The acceleration clause is usually triggered
if the home is sold, title to the property is changed,
the loan is refinanced or the borrower defaults on a scheduled
payment.
Mortgage advance
The money loaned to the buyer, by the lender.
Mortgage application
Forms used to assess whether you meet the lender's underwriting
criteria. These criteria are set to ensure that barring
any unforeseeable change in circumstances, you will be
able to support the mortgage and meet the repayments.
Questions relate to such things as income & status, equity,
personal details, credit history etc.
Mortgage application fee
A charge purely for applying for a mortgage. Paid to the
lender upfront at the time of application it is usually
between £100 and £300.This type of fee is becoming less
common than an arrangement fee. As with arrangement fees,
this type of mortgage fee is usually found with the special
deals from lenders possibly to restrict the number of
applicants by only attracting serious buyers. Some of
the time this fee is refunded on completion of the mortgage.
Mortgage arrears
The amount of back pay you owe your mortgage lender for
failing to meet your mortgage requirements.
Mortgage broker
An independent agent who shops around for the best mortgage
deal on behalf of his clients.
Mortgage cash deficit
Money still owed and the end of the repayment period of
an interest only mortgage.
Mortgage cash surplus
Money left over at the end of a mortgage term, over and
above the amount required to pay back the debt.
Mortgage certificate
The first document provided by an mortgage lender which
shows any prospective seller that you can actually get
a mortgage to cover the purchase price. It also provides
a handy reference for some of the key features of your
mortgage, and what your repayments will be for the introductory
offer period, if there is one.
Mortgage code
The mortgage code is a set of standards defined by the
Council of Mortgage Lenders, that lenders voluntarily
subscribe to. It sets out codes of conduct on how a lender
or intermediary should act when arranging your mortgage,
as well as how you should be dealt with once your mortgage
is in place. It also tells you how to complain in the
event of a lender not keeping to the code and who to complain
to.
Mortgage code arbitration scheme
An arbitration service between members of the public and
lenders.
Mortgage confirmation
When you get a written confirmation of your offer, you
usually receive two things. Firstly, there will usually
be some form of standard covering letter, thanking you
for your hugely valued business and welcoming you into
a family of customers that have their mortgage lender
in common. In addition to the letter, you will receive
a written mortgage confirmation. This will normally set
out some of your personal details, some facts about the
property, your salary details, your solicitors (if you
have appointed them by this stage), and will require a
signature.
Mortgage debt
The amount outstanding on your mortgage.
Mortgage deed
This is the agreement which explains the conditions of
the mortgage (loan). It is a document to be signed by
all parties to the remortgage on your property, and will
be sent to HM Land Registry to register the remortgage.
Mortgage incentives
The lender may offer a discount or fee-free period on
buildings insurance, accident and sickness insurance,
redundancy insurance, or payment protection insurance.
This is often done to encourage you to take up the policy,
which you are then fairly likely to keep in the longer
term. Other common incentives include a free valuation
and money towards solicitor's fees.
Mortgage lien
The unpaid balance on the mortgage loan.
Mortgage payment protection insurance (MPPI)
An MPPI policy pays your mortgage for you if you become
unable to work for an extended period of time, as a result
of redundancy, accident, sickness or disability. It should
provide enough income to cover all your monthly mortgage
expenses. If you have a repayment mortgage, this should
be your capital and interest repayment and if you have
an interest-only mortgage, the MPPI should cover your
interest payment as well as your normal monthly contribution
to the investment vehicle that will repay your loan.
Mortgage reference fee
If you apply for a remortgage or a new mortgage, the new
lender will want a mortgage reference from your existing
lender. You will probably have to pay for this. Costs
£20 - £50
Mortgage term
The period over which the mortgage loan is to be repaid.
Mortgage types
For example, repayment or interest. Or fixed, capped,
tracker, discount or stepped rate etc.
Mortgagee
A bank or other financial institution that lends money
to the borrower. The borrower is considered the mortgagor.
Mortgagor
The mortgagor is another term for the borrower.
MPC
Monetary Policy Committee of the Bank of England. Meets
monthly to discuss and alter interest rates etc.
Multifamily mortgage
A mortgage on a multifamily dwelling with more than four
families, typically an apartment building.
