Glossary of Mortgage Terms

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 credit certificate (MCC) is a federal tax credit issued by state or local housing finance agencies that lets eligible home buyers claim a portion of their annual mortgage interest as a dollar-for-dollar reduction in federal income taxes.

Mortgage curtailment is the practice of making extra payments toward your loan’s principal balance, which reduces the total interest you owe and shortens the time it takes to pay off your home.

A mortgage default happens when you break the terms of your home loan agreement, most commonly by missing monthly payments, and it can trigger serious consequences including foreclosure if left unresolved.

When a borrower misses one or more monthly mortgage payments, they are in danger of defaulting on the loan and possibly losing their home.

Mortgage insurance is a way for lenders to protect themselves from losing money if a borrower doesn't pay back their loan. The type of mortgage insurance depends on the loan program used to buy the home.