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Money Market Fund

A mutual fund that allows individuals to participate in managed investments in short-term debt securities, such as certificates of deposit and Treasury bills.

Monthly Debt

A borrower's monthly expenses including credit cards, installment loans, student loan payments, alimony and child support and housing payment expense.

Monthly Mortgage Insurance (MI) Payment

Portion of monthly payment that covers the cost of Private Mortgage Insurance.

Monthly payment

Payments to reduce the principal balance of a home loan made once a month.

Monthly Principal & Interest (P&I) payment

Portion of monthly payment that covers the principal and interest due on the loan.

Monthly Taxes & Insurance (T&I) payment

Portion of monthly payment that funds the escrow or impound account for taxes and insurance.

Mortgage

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

Mortgage banker

A company that originates, sells and services 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 brokers typically require a fee or a commission for their services.

Mortgage Company

A company whose principal activity is the origination and/or servicing of mortgage loans that are sold to other investors or securities.

Mortgage Insurance

A contract that insures the lender against loss caused by a borrower's default on a government mortgage or conventional mortgage. Mortgage insurance can be issued by a private company or by a government agency such as the Federal Housing Administration (FHA). Depending on the type of mortgage insurance, the insurance may cover a percentage of or virtually all of the mortgage loan. See private mortgage insurance (PMI).

Mortgage insurance premium (MIP)

The amount paid by a borrower for mortgage insurance, either to a government agency such as the Federal Housing Administration (FHA) or to a private mortgage insurance (MI) company.

Mortgage Life Insurance

A type of term life insurance sometimes bought by borrowers. The amount of coverage decreases as the loan's principal balance declines. In the event that the borrower dies while the policy is in force, the debt is automatically satisfied by insurance proceeds. See credit life insurance.

Mortgage Points

These are basically finance charges you pay the lender. One point equals 1% of the loan amount (for example, one point on a $75,000 loan is $750). The total number of points a lender charges depends on market conditions and the loan's interest rate.

Mortgage Reinstatement

The stoppage of foreclosure proceedings and return to the original terms of a loan that occurs when an borrower pays off the amount in default on the loan to bring the loan payments current. The borrower’s chance to reinstate ends before the public foreclosure sale in most states.

Mortgagee

The lender in a mortgage agreement.

Mortgagor

The borrower in a mortgage agreement.

Multi-dwelling Units

Properties that provide separate housing units for more than one family, although they secure only a single mortgage. Typically a 2-4 unit property.

Negative Amortization

An increase in the outstanding balance of a mortgage that occurs when the monthly payment is not large enough to cover the interest due. The amount of the shortfall is added to the remaining balance to create "negative" amortization.

Net Cash Flow

The income that remains for an investment property after the monthly operating income is reduced by the monthly housing expense, which includes principal, interest, taxes, and insurance (PITI) for the mortgage, homeowners' association dues, leasehold payments, and subordinate financing payments.

Net worth

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

No Closing Cost Loan

A loan in which the fees the borrower(s) are not required to pay cash out-of-pocket at closing for the normal closing costs. The lender typically includes the closing costs in the principal balance or charges a higher interest rate than for a loan with closing costs to cover the advance of closing costs.

No Doc Loan

These loans are designed for those who do not wish to disclose or verify their income. The following is not stated in the application: Employment, Income, or Assets. The down payment can come from anywhere and does not need to be the borrowers’ own money. The down payment for purchases must be a minimum of 10%. This type of loan is very popular among independent contractors or people with several sources of income. Typically, these loans require a half point to a full point and a half above a standard rate.

No Income No Asset Loan (NINA)

A type of reduced documentation mortgage program in which no income and no assets are disclosed on the loan application, but employment is verified. NINA loans usually fall into the Alt-A classification, and may carry a higher interest rate than a prime mortgage.

No Income Verification Loan (NIV)

This feature eliminates the need to verify earned income, although assets and unearned income must still be verified.

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