Property Reference: M

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Mansion

A mansion is a large and stately dwelling house. The word itself derives (through Old French) from the Latin word mansus the past participle of manere “to dwell”. The English word “manse” originally defined a property large enough for the parish priest to maintain himself, but a mansion is no longer self-sustaining in this way (compare a Roman or medieval villa). ‘Manor’ comes from the same root— territorial holdings granted to a lord who would remain there— hence it is easy to see how the word ‘Mansion’ came to have its meaning.

Market value

The value of something as expressed by transactions in a market place.

Market value is typically measured and expressed using a unit of account.

Mews

Mews is a chiefly British term, used in the plural, referring to stables with living quarters surrounding a courtyard, or living quarters adapted from stables. They are usually found on narrow streets in larger cities.

The term comes from the French muer and Latin mutare (to change), originally applied in French to the moulting of a hawk or falcon, and then to the caging of the bird. The term likely came to English because of the Royal Mews at Charing Cross, where the royal hawks were kept starting in 1377. The name remained when it became the royal stables starting in 1537.

Mortgage

A mortgage is a device used to create a lien on real estate by contract. The mortgage is an instrument that the borrower (called the mortgagor) uses to pledge real property to the lender (called the mortgagee) as security for a debt, also called hypothecation.

The mortgage instrument contains two parts:

* the mortgage, which is the pledge
* the note, which is the actual evidence of the debt and promise to repay (sometimes called a promissory note).

To protect the lender, a mortgage is recorded in the public records creating a lien (when there are multiple liens, order of recording determines priority). Since mortgage debt is often the largest debt owed by the debtor, banks and other mortgage lenders run title searches of the real property to make certain that the lien of the mortgage is prior to anyone else’s claim.

Mortgage History

At common law, a mortgage was a conveyance that on its face was absolute and conveyed a fee simple estate, but which was in fact conditional, and would be of no effect if certain conditions were met — usually, but not necessarily, the payment of a debt by the original landowner. Hence the word “mortgage,” Law French for “dead pledge;” that is, it was absolute in form and in theory required no further steps to be taken by the creditor.

In many U. S. states, however, a mortgage has been converted by statute to a device for creating a security interest in land. When the landowner fails to perform on the obligation secured by the mortgage, the mortgage holder must file a foreclosure to cause the property to be sold at auction, usually by the sheriff.

Mortgage finance industry

Mortgage lending is a major category of the business of finance in the United States of America. Mortgages are commercial paper and can be conveyed and assigned freely to other holders. In the USA the Home Owners Loan Corporation, the Federal Housing Administration administer the programmes colloquially known as “Ginnie Mae” and “Freddie Mac” (aka the GSE’s—the government sponsored entities) to foster mortgage lending and thus to encourage home ownership and construction.

Mortgage loan types

There are many types of mortgage loans. The two basic types of amortized loans are the fixed rate mortgage (FRM) and adjustable rate mortgage (ARM).

In a FRM, the interest rate, and hence monthly payment, remains fixed for the life (or term) of the loan. In the US, the term is usually for 10, 15, 20, or 30 years. In the UK the fixed term can be as short as five years, after which the loan reverts to a variable rate.

In an ARM, the interest rate will periodically (annually or even monthly) adjust up or down to some market index. Adjustable rates transfer part of the interest rate risk from the lender to the borrower, and thus are widely used where unpredictable interest rates make fixed rate loans difficult to obtain. Since the risk is transferred, lenders will usually make the initial interest rate of the ARM’s note anywhere from 0.5% to 2% lower than the average 30-year fixed rate.

A partial amortization or balloon loan is one where the amount of monthly payments due are calculated (amortized) over a certain term, but the outstanding principal balance is due at some point short of that term. A balloon loan can be either a Fixed or Adjustable in terms of the Interest Rate. Many Second Trust mortgages use this feature. The most common way of describing a balloon loan uses the terminology X due in Y, where X is the number of years over which the loan is amortized, and Y is the year in which the principal balance is due.

Other loan types:

* term loan or interest-only loan
* equity loan
* blanket loan
* package loan
* wraparound mortgage
* seasoned mortgage
* reverse mortgage
* budget loan
* deed of trust
* bridge loan
* hard money loan

Multiple Listing Service

Multiple Listing Service (MLS) is a real estate listing service that combines the listings for all available properties in an area, except For-Sale-By-Owner (FSBO) properties, in one directory or database.