Glossary of Mortgage Terms

A manufactured home is a factory-built dwelling constructed on a permanent steel chassis under federal HUD Code standards, then transported to a home site for installation.

The maximum allowable offer (MAO) is the highest price a real estate investor can pay for a property and still make a good profit after paying for repairs and selling costs.

MERS, or Mortgage Electronic Registration Systems, is a private electronic database that tracks who owns and services residential mortgage loans across the country, cutting down on the paperwork that used to come with every loan transfer.

A modular home is a factory-built house that is made in parts, taken to a building site, and put together on a permanent foundation. It must follow the same local building codes as traditional stick-built homes.

A mortgage is a loan that is backed by real estate and lets the borrower buy or refinance a home. The lender keeps a lien on the property until the debt is paid off in full.

Mortgage amortization is the process of paying off a home loan through regular monthly payments that split between interest and principal until the balance reaches zero.

A mortgage banker is a person or business that makes, funds, and sometimes services home loans for the bank where they work.

A mortgage bond is a type of investment that is backed by a group of home loans. The real estate itself is used as collateral, which means that investors can get their money back if the borrowers stop making payments.

A mortgage buydown is a deal in which a fee paid upfront lowers the interest rate on a home loan. This can be for the first few years or for the entire loan term.

A mortgage commitment letter is a letter from your lender that says they have looked over your loan application, approved it, and are ready to close on the loan once the final conditions are met.