Mortgage Glossary

MARGIN


The number of percentage points the lender adds to the index rate to calculate the ARM interest rate at each adjustment.

MATURITY


The date on which the principal balance of a loan becomes due and payable.

MONTHLY ARM


With this loan, the interest rate is recalculated every month. Compared to other options, the rate is usually loawe on this ARM because the lender is only committing to a rate for a month at a time, so his culnerability is significantly reduced.

MONTHLY FIXED INSTALLMENT


That portion of the total monthly payment that is applied toward principal and interest. When a mortgage negatively amortizes, the monthly fixed installment does not include any amount for principal reduction and doesn't cover all of the interest. The loan balance therefore increases instead of decreasing.

MORTGAGE


A legal document that pledges a property to the lender as security for payment of a debt.

MORTGAGE BANKER


A company that originates mortgages exclusively for resale in the secondary mortgage market.

MORTGAGE BROKER


An individual or company that brings borrowers and lenders together for the purpose of loan origination.

MORTGAGE INSURANCE


A contract that insures the lender against loss caused by a mortgagor's default on a government mortgage or conventional mortgage. Mortgage insurance can be issued by a private company or by a government agency.

MORTGAGE INSURANCE PREMIUM (MIP)


The amount paid by a mortgagor for mortgage insurance.

MORTGAGE LIFE INSURANCE


A type of term life insurance In the event that the borrower dies while the policy is in force, the debt is automatically paid by insurance proceeds.

MORTGAGOR


The borrower in a mortgage agreement.

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 of 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.

NET WORTH


The value of all of a person's assets, including cash.

NON LIQUID ASSET


An asset that cannot easily be converted into cash.

NOTE


A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.

ORIGINATION FEE


A fee paid to a lender for processing a loan application. The origination fee is stated in the form of points. One point is 1 percent of the mortgage amount.

OWNER FINANCING


A property purchase transaction in which the party selling the property provides all or part of the financing.

907 E Strawbridge Ave Ste 101, Melbourne, FL 32901

NMLS # 1425046 | (321) 450-1886

VA: 6393340000 | FHA: 00392-0000-4

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Copyright Rejoice Mortgage Inc. 2020 This offer is made by Obsidian Financial Services Inc. d/b/a Rejoice Mortgage Inc. NMLS #1425046 1600 Sarno Rd. Suite 215, Melbourne, FL 32935, which is not affiliated with your current lender nor is it an agency of the federal government. Obsidian Financial Services Inc. d/b/a Rejoice Mortgage Inc. is approved by HUD/FHA, Fannie Mae, Freddie Mac and Ginnie Mae. This is not a government form. This is not a credit decision or a commitment to lend.This website is not authorized by the New York State Department of Financial Services. Until this website is authorized, no mortgage loan applications for properties located in New York will be accepted through this site.