Glossary of Mortgage Terms

Before it was replaced by more reliable options, LIBOR was a benchmark interest rate that big banks around the world used to set the cost of borrowing money for adjustable-rate loans, like mortgages.

Loss mitigation is the term for the options and strategies that a mortgage servicer gives a homeowner to help them avoid losing their home when they can't make their monthly payments anymore.

A low-income home loan is a type of mortgage that helps families with incomes below the area median income level buy a home. It has flexible credit, a lower down payment, and rules about who can get one based on their income.

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.

A mechanic’s lien is a legal claim on a property by a contractor, subcontractor or material supplier for work or materials used to improve the property that have not been paid for.

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.