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The HSH Mortgage Glossary J-M


To view a linked word list, View the Summary

The Mortgage Glossary Index:


Joint Tenancy
Joint ownership by two or more persons such as husband and wife, business partners, etc. Each person has equal rights to the property and ownership passes to the survivor in the event of death.

Jumbo Loan
A mortgage for an amount greater than the amount eligible for purchase by Fannie Mae or Freddie Mac. See Non Conforming Loan

Lender Buy Down
A particular form of convertible mortgage offering a discounted interest rate at the beginning of the loan that gradually increases during the first few years of the loan. It provides lower initial payments and a stable final monthly rate, but the final rate may be somewhat higher than on a standard fixed rate mortgage. See Buydown

Liability Insurance
Insurance protection against claims alleging negligence or an action which resulted in bodily injury or property damage to another party. It is included in most homeowner's policies.

A legal claim against a property, such as a mortgage or a workman's claim. In general, liens must be paid off prior to title transfer.

Life Cap
For an adjustable-rate mortgage (ARM), a limit on the amount that the interest rate can increase or decrease over the life of the mortgage.

Line Of Credit
An agreement to extend credit to a borrower under specified conditions. See Home Equity Line Of Credit (HELOC)

A sum of borrowed money (principal) that is generally repaid with interest.

Loan Servicing
The process of collecting and managing monthly payments. Often a separate company, a loan servicer processes the payments, sends statements, manages the escrow/impound accounts and makes sure that taxes and insurance premiums made on time.

Loan Origination Fee
See Origination Fee

Loan Servicing
The process of collecting and managing monthly payments. Often a separate company, a loan servicer processes the payments, sends statements, manages the escrow/impound accounts and makes sure that taxes and insurance premiums made on time.

Loan To Value (LTV) Ratio
The percentage relationship between the amount of the loan and the appraised value or sales price, whichever is lower.

Lock In
An agreement in which the lender guarantees a specified interest rate for a certain amount of time. Extended lock in periods usually incur an additional fee.

See Loan To Value (LTV) Ratio

The percentage amount added to the Index value to establish the new interest rate at each adjustment. The margin remains constant over the life of the loan.

Market Value
The highest price that a motivated buyer would pay, and the lowest price that a motivated seller would accept on a property. Market value is not necessarily the price that a property could actually be sold for at a given time.

The date on which the remaining balance of a loan financial instrument becomes due and payable. The date the mortgage must be paid off.

Mechanic's Lien
A formal recorded claim against a property for work and materials for construction or repair of a property. Mechanic's liens attach to both the building(s) and land.

A change in the terms of a mortgage without refinancing. Usually, a reduction in the interest rate or other change that is beneficial to the borrower.

A formal document pledging a property as security for a loan. Not used in all states - see Deed Of Trust

Mortgage Banker
A company or individual that originates and funds mortgages, which are then sold in the secondary market.

Mortgage Broker
A independent company or individual that originates but does not fund mortgages. A mortgage broker arranges mortgages with a variety of institutions with which they have pre-established relationships.

The lender in a mortgage agreement.

Mortgage Insurance (MI)
Insurance purchased by the borrower to partially protect the lender against loss if the borrower defaults. Normally required for loans with an LTV greater than 80% (20% down). FHA loans and most first buyer programs require mortgage insurance regardless of the LTV.

Insurance purchased for non-FHA loans is commonly called PMI (Private Mortgage Insurance). Some large lenders self-insure and do not require the buyer to purchase PMI, the interest, however, rate may be slightly higher.

Normally, mortgage insurance may be dropped when the LTV drops below 80%.

Mortgage Insurance Premium (MIP)

The premium paid by a borrower either to FHA (FHA/VA loans) or to a private company for non-government insured loans.

Mortgage Life/Disability Insurance
A form of insurance where the insurance amount decreases in lock step with the remaining loan balance. It is not usually required by lenders and is relatively expensive.

The borrower in a mortgage agreement.

An ARM index also known as "12-MAT." See this page for more information and a history of the index.

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