Mortgage Glossary
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MANDATORY DELIVERY COMMITMENT:
A lender's written promise to deliver certain funds at specified dates upon terms set out in the commitment.
MARGIN:
The difference or the added amount. In mortgages, the difference between the index interest rate and the interest rate charged on the variable or adjustable rate mortgage. Expressed in the contract as a percentage (i.e. "prime plus three per cent").
MATURITY DATE:
The date upon which a mortgage loan comes due and payable.
MINIMUM DOWNPAYMENT:
The least amount of money a purchaser can provide toward the purchase price of a house under a mortgage loan program.
MINIMUM PAYMENT:
The lowest amount a borrower is allowed to pay toward a loan, line of credit or other debt in a given period of time.
MONTHLY DEBT SERVICE:
The periodic payments required to remain current on all outstanding loans.
MONTHLY FIXED INSTALLMENT:
Periodic payment that is applied toward accumulated interest and reduction of principal.
MONTHLY HOUSING EXPENSE:
The total of the costs of maintaining a home per month, including financing, realty taxes and house insurance.
MONTHLY TOTAL EXPENSES:
The total when monthly housing expense is added to monthly debt service.
MORTGAGE:
A loan which is secured against property (i.e. registered on title as a claim or encumbrance on the property). Often used to purchase the property itself.
MORTGAGE BACK:
Also known as a "vendor take-back mortgage". Financing of a purchase of property whereby the vendor accepts only a portion of the purchase price up front and accepts a mortgage (with periodic payments and interest chargeable) for the remainder.
MORTGAGE BANKER:
A firm that offers mortgages for property purchases but, at times, may require financial support from larger institutions to help cover the outlay of cash.
MORTGAGE BROKER:
A middleman who serves to bring borrowers together with lenders. Offers the service of doing the shopping for the borrower while often collecting a fee from the chosen lender rather than from the borrower.
MORTGAGE COMMITMENT:
See "commitment letter".
MORTGAGE CORRESPONDENT:
An authorised agent of a lender for a geographic area.
MORTGAGE DISABILITY INSURANCE:
A policy of insurance which promises to pay periodic mortgage payments for the borrower during any future period that borrower may be disabled from working and, therefore, incapable of making the payments himself.
MORTGAGE INSURANCE:
A policy of insurance which promises to pay out the amount owing in the event that the borrower defaults.
MORTGAGE LIFE INSURANCE:
A policy of insurance which promises to pay out the remaining balance owing on a mortgage should the borrower die. The amount payable by the insurer declines as the mortgage is paid down and the policy ends upon the paying out of the mortgage.
MORTGAGE LOAN SERVICING:
The lender's actions in collecting mortgage payments, allocating payments to principal, interest and escrow accounts, paying out property taxes and insurance over the life of the loan.
MORTGAGE LOAN UNDERWRITING:
The action of reviewing an application for a loan and then advising the lender as to the risk factor in making the loan.
MORTGAGE PROGRAM:
The bundle of features of a particular kind of mortgage offered to the public.
MORTGAGE VALUE:
The estimate worth of a particular asset which is established for the purposes of obtaining financing secured against that asset.
MORTGAGEE:
The lender in a mortgage transaction. Also known as "chargee".
MORTGAGEE IN POSSESSION:
A lender that has taken over control and occupancy of a property upon default of the borrower to collect income from the property and prepare for foreclosure and sale.
MORTGAGOR:
The borrower, purchaser or homeowner in a mortgage transaction. Also known as "chargor".
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