Dictionary of Mortgage Terms M - O

:: A Dictionary of Mortgage Terms -- M - O

Mortgage Insurance

Money that is used to insure the mortgage loan if the borrower puts less than twenty percent down.

Mortgagee

The lender.

Mortgagor

The borrower.

Negative Amortization

When a borrower’s monthly payments do not cover the interest due on the mortgage loan. The interest that isn’t paid is added to the remaining balance, and in the end, the borrower ends up paying more than what was originally planned.

Net Effective Income

A borrower’s total income less income tax.

Non Assumption Clause

A part of the mortgage loan contract where the lender must approve the assumption of the mortgage.

Office of Thrift Supervision

Formerly known as the Federal Home Loan Bank Board, the OTS is the regulatory agency for savings institutions.

One-year adjustable

This type of mortgage loan has rates that change annually. The change is based on an index and a margin that is set by the lender.

Origination Fee

The lender charges this fee for the preparation of all loan documents, to make any necessary background credit checks, property appraisal, etc. This fee is typically calculated as a percentage of the amount of the loan.