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.
