Margin is the additional points added to the index of an adjustable rate mortgage (ARM), reverse mortgage with an adjustable rate, or other variable rate loans. After these points are added, the loan's rate is set the loan. For example, if a 1-year ARM loan has a margin of 300 basis points over the yield on 1-year Treasury bills and the T-bill yield is 6.5%, the loan rate is set to 9.5%. The margin is usually based on the market and is typically between two and three percentage points. After the margin is added to the index, the amount is usually rounded up or down to a specified percentage.
When a loan, bond or security is due and payable. The maturity is the date the borrower must pay back the money borrowed through the issue of a bond.
Maximum claim amount
For a HECM reverse mortgage, this defines the lesser of the home's appraised value or the maximum FHA 203b county limit for one-unit building in the county where the property is located, even if the property is a 2 - 4 unit property.
Payments made to a borrower from the established line of credit. Guidelines and limits may vary.
A money market account is a type of savings deposit product that offers a higher rate of interest and limited check-writing privileges in exchange for limited withdrawals and higher balances.
Monthly payment is the dollar amount of your loan repayments. These are often described as PITI, which stands for Principal, Interest, Taxes and Insurance. The portion for taxes and insurance may be deposited into an escrow account.
Your mortgage balance is the unpaid principal on your mortgage loan. In the early years of an amortizing mortgage loan, most of your loan payment is applied to interest. This means that your balance drops more slowly than in later years, when a larger share of payments is applied to your balance.
A loan used to pay for your home. In exchange for a loan to buy your home, you give the mortgage lender the legal right to use your home as collateral. A first mortgage lien is the legal right you give the lender to buy your home. If you later need to borrow more money, and are willing to use the equity in your home as collateral, a lender will often make you a second mortgage loan (at a higher rate than your first mortgage) in exchange for a lien on your home that is subordinate to the first mortgage lien.