Mortgage Definitions (J - M)

Jumbo Loan
A loan which is larger than the limits set by the FEDERAL NATIONAL MORTGAGE AASSOCIATION and the Federal Home loan MOrtgage Corporation. Because jumbo loans cannot be funded by these two agencies, they usually carry a higher interest rate.

Late Charge
The penalty a norrower must pay when a payment i smade a stated number of datys after the due date

Lease-Purchase Mortgage Loan
A alternatice financing option that allows low and moderate income home buyers to lease a home with an option to buy. Each month's rent payment consists of prin cipal, interset, taxes and insurance (PITI) payments on teh first mortgage plus an extra amount that accumulates in a savings account for a down payment

Liabilities
Aperson's financial obligations. Liabilities include long term and short term debt

Lien
A claim upon a piece of property for the payment or satisfaction of a debt or obligation

Lifetime Payment Cap
For an adjustable rate mortgage (ARM) a limit on the amount that ht einterst rate can increase or decrease over th life of the mortgage

Lifetime Rate 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 loan. See Cap

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

Loan to Value Ratio
The relationship between teh amount of the mortgage loan and the apprasied value of the property expressed as a percentage

Lock
A lender's guarantee that the mortgage rate quoted will be good for a specific number of days from the day of application

Margin
The amount a lender adds to the index in an adjustable rate mortgage to establish the adjusted interest rate

Market Value
The highest price that a buyer would pay and the lowest price a seller would accept on a property. Market value may be different form teh price a property could actually be sold for at a give time.

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

MIP (MOrtage Insurance Premium)
Insurance from FHA to the lender against incurring a loss on a account of the borrower's default

Monthly Fixed Installment
The portion of the toal monthly payment that is applied toward principal and interst. When a mortgage negatively amortizes, the monthly fixed installment does not include any amount for principal reduction and doens't cover all of the interst. 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 for resale in the secondary mortgage market.

Mortgage Broker
An individual or company that charges a service fee to bring borrowers and lenders together for the purpose of loan origination

Mortgagee
The lender

Mortgage Insurance
Money paid to insure the mortgage when the odwn payment is less than 20 percent. See private mortgage debt is automatically payid by insurance proceeds

Mortgagor
The borrower of homeowner