M

Management Agreement
A contract between the owner of property and someone who agrees to manage it.

Margin
A constant (fixed) amount over an index that determines a lender’s yield on an adjustable rate loan. The interest rate of an adjustable rate loan is determined by adding a margin to an index. The size of the margin is typically a function of the index used and the credit worthiness of the borrower. Typical margins on a Prime Rate based loan would be 0.0 to 5.0 so that if the Prime Rate were 8.25% and the margin were 2.0 (typical for an “average” borrower), the interest rate would be 10.25% (8.25 + 2.0). (See definition of “index” above.).

Marketable Title
A title free from defect.

Master Lease
A controlling lease. You control the property, maintain it, lease it out, but you do not own it and you do not have the ability to claim depreciation. This is a good strategy, a specialized one but a good one.

Maturity
The date on which the principal balance of a loan, bond, or other financial instrument becomes due and payable

Maximum Financing
A loan amount within 5 percent of the highest loan-to-value ratio allowed for a property.

Mechanic’s Lien
A lien given by law upon a building or other improvement upon land as security for the payment of labor and materials furnished for improvement.

Merged Credit Report
A report that draws information from the Big Three credit-reporting companies: Equifax, Experian, and Trans Union Corp.

Minimum Payment
The minimum amount that must be paid monthly on an account. On the HELOC product, the minimum payment is interest only during the draw period. On the Fixed Rate Second products, the minimum payment is principal and interest.

Monthly Mortgage Insurance (MI) Payment
Portion of monthly payment that covers the cost of Private Mortgage Insurance.

Monthly Payment (P&I)
This is the monthly mortgage payment on a home loan, this includes principal and interest, but excludes any amounts that are applied to taxes and insurance.

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 lien against real property given by a borrower to a lender as security for money borrowed.

Mortgage (Open-End)
A mortgage that allows additional money to be borrowed (up to the original loan amount) without refinancing the loan or paying additional financing charges .

Mortgage Balance
See Principal Balance.

Mortgage Insurance Premium (MIP)
The payment made by a borrower of FHA insured mortgages to provide a reserve that protects lenders against losses from very high loan-to-value loans.

Mortgage Loan
A loan which is secured by a mortgage lien filed against real property.

Mortgage-Interest Deduction
The tax write-off that the Internal Revenue Service allows most owners to claim for annual interest payments made on real estate loans. mortgagee

Mortgagee
The entity to whom the mortgage is given; i.e., the lender.

Mortgagor
The entity who gives the mortgage; i.e., the borrower.

Multi-Dwelling Property
A property that contains individual units for several households but carries only one mortgage.