Magnetic Ink Character Recognition (MICR) 

A language that is universally used by bankers on checks, consisting of Arabic type numbers printed on the bottom of each check. The special ink used in printing these numbers is capable of being magnetized when processed through automated check processing equipment. SECU uses this process on its checks.

Maker 

Person who signs a check or note; person who promises to pay an obligation when due.

Margin 

The amount (expressed as a percentage) added to the index for an Adjustable Rate Mortgage (ARM) to establish the interest rate on each adjustment rate. For example, if the index rate is 6%, and the fully indexed rate is 8.75%, the margin is 2.75%.

Market Price 

Last reported price at which the stock or bond sold, or the current quote.

Market Value 

The current value of your home based on what a willing purchaser would pay. The value determined by an appraisal is sometimes used to determine market value.

Maturity 

The date when a note or other obligation becomes due and payable

Money Market Account

Offered by full service brokers, these are similar to checking accounts but usually pay higher rates. Minimum deposit levels are higher than checking, and access to the account may be limited.

Money Market Fund

A mutual fund that invests in short term corporate and government debt and passes the interest payments on to shareholders.

Mortgage

Backed securities Securities issued by government related agencies that buy up mortgage loans from lenders such as banks and savings and loan associations.

Mortgage Banker 

A company that originates loans and resells them to secondary mortgage lenders like Fannie Mae or Freddie Mac.

Mortgage Broker 

Any person who for compensation or gain, or in the expectation of compensation or gain (a) makes a residential mortgage loan or assists a person in obtaining or applying to obtain a residential mortgage loan or (b) holds himself or herself out as being able to make a residential mortgage loan or assist a person in obtaining or applying to obtain a residential mortgage loan. Mortgage brokers may be involved in a high percentage of high cost loans, and sometimes receive a payment from the lender for steering the client to a higher cost loan (otherwise known as a "yield spread premium") or for the volume of loans the brokers steer towards the lender (otherwise known as "volume based compensation").

Mortgage Brokers Practices Act (MBPA) 

A law that is designed to promote honest and fair dealings and to preserve public confidence in the lending industry by preventing fraudulent practices on consumers.

Mortgage Insurance Premium (MI or PMI) 

A monthly payment usually part of the mortgage payment paid by a borrower for mortgage insurance.

Mortgage Insurance 

A policy that protects lenders against some or most of the losses that can occur when a borrower defaults on a mortgage loan; mortgage insurance is required primarily for borrowers with a down payment of less than 20% of the home's purchase price.

Mortgage Lender 

The lender providing funds for a mortgage. Lenders also manage the credit and financial information review, the property and the loan application process through closing.

Mortgage Life Insurance 

Term life insurance paid by the borrow in which the amount of coverage decreases as the mortgage balance declines. In the even the borrower dies while the policy is in force, the debt is automatically satisfied by insurance proceeds.

Mortgage Modification 

A loss mitigation option that allows a borrower to refinance and/or extend the term of the mortgage loan and thus reduce the monthly payments.

Mortgage Rate 

The cost or the interest rate you pay to borrow the money to buy your house.

Mortgage 

A loan secured by a lien on your home. In some states the term mortgage is also used to describe the document you sign to show that you have granted the lender a lien on your home; other states use a deed of trust document instead of a mortgage. It may also be used to indicate the amount of money you borrow, with interest, to purchase your house. The amount of your mortgage is usually the purchase price of the home minus your down payment.

Mortgagee 

A person or firm to whom property is conveyed a security for a loan (lender)

Mortgagor 

One who borrows money, giving as security a mortgage or deed of trust on real property (borrower).

NCUA 

National Credit Union Association is an independent federal financial regulatory agency responsible for chartering, supervising, examining and insuring all federal credit unions. Additionally, it insures the member accounts of those state chartered credit unions which choose, or are required by state law, to have federal insurance.

Negative Amortization 

Occurs when the monthly payments are not large enough to pay all the interest due on the loan that month. This unpaid interest is added to the balance of the loan. The danger of the negative amortization is that the borrower ends up owing more than the original loan amount. The benefit is that the initial payments are lower.

Net asset value (NAV) 

The result of dividing a fund’s total assets by the number of shares outstanding.

Net Monthly Income 

Your take-home pay after taxes. It is the amount of money that you actually receive in your paycheck.

Note 

A contract involving a loan of money.

Offer 

Indication by a potential buyer of a willingness to purchase a home at a specific price; generally put forth in writing.

On Line

Data processing operations that have direct access to a computer, giving the user direct and immediate access to the computer system via terminal devices.

Open House 

When the seller's real estate agent opens the seller's house to the public. You do not need a real estate agent to attend an open house.

Open End Credit

A credit plan under which a creditor allows an applicant to make purchases or obtain loans up to a preapproved limit without negotiating a new contract each time.

Opportunity Cost 

The cost of passing up one investment in favor of another.

Origination Fee 

A fee paid to a lender or mortgage broker for originating a loan application. It may be stated as a percentage of the mortgage amount, or "points", or as a fixed dollar amount and paid at closing.

Origination 

The process of preparing, submitting, and evaluating a loan application; generally includes a credit check, verification of employment, and a property appraisal.

Overdraft 

A negative balance in an account caused by the amounts of checks or withdrawals being posted to the account exceeding the balance.

Partial Claim 

A loss mitigation option offered by the FHA that allows a borrower, with help from a lender, to get an interest free loan from HUD to bring their mortgage payments up to date.

Payee 

The person to whom a check or other obligation is payable.

Payroll Deduction 

Allows members to send part of their pay, retirement, insurance or investment checks directly to any SECU account.

Periodic Rate 

A rate of finance charge imposed for a given amount of time.

Personal Identification Number (PIN) 

A member's secret identification number that must be used when accessing an automated teller machine (ATM).

PITI 

Acronym for (Principal + Interest + Taxes + Insurance) = the four elements of a monthly mortgage payment; payments of principal and interest go directly towards repaying the loan while the portion that covers taxes and insurance goes into an escrow account to cover the fees when they are due.

Point Of Sale Terminal (POS)

Computer terminal that enables a bank customer to access account funds at the place a sale is made, usually a supermarket or retail store.

Points (Loan Discount Points) 

Fees described as percentages. For example, "2 points" equals 2% of the loan amount. (e.g., two points on a $100,000 mortgage would cost $2,000).

Portfolio 

The collection of all of your investments.

Postdated Check 

A check dated in the future. The check is not acceptable for processing until that date has been reached.

Power of Attorney 

A legal document authorizing a person to act as an agent for another person.

PreApproval Letter

A letter from a mortgage lender indicating that you qualify for a mortgage of a specific amount. It also shows a home seller that you are a serious buyer.

PreApproval

Where the consumer actually applies for a loan before s/he has found the house s/he wants to buy. The lender guarantees the consumer a fixed loan amount as long as s/he buys within a certain time period and meets the qualification requirements at the time of purchase. This is much more convincing to a seller than a Pre qualification.

Preauthorized Payments 

Free service which provides members with a convenient method of paying fixed amount, recurring bills; primarily mortgage payments and insurance premiums. Funds are automatically withdrawn from the member's Share Draft account each month to honor these payments. The combined account statement serves as the record of payment.

Predatory Lender 

Abusive lending practices that include making a mortgage loan to an individual who does not have the income to repay it; or charges higher interest rates that include unnecessary fees and charges, and/or does not fully disclose the loan terms, or writes the terms in such a way that ensures an unreasonable amount of profit for the lender.

Pre Foreclosure Sale

Allows a defaulting borrower to sell the mortgaged property to satisfy the loan and avoid foreclosure.

Premium 

An amount paid on a regular schedule by a policyholder that maintains insurance coverage.

Prepayment Penalties 

Charges assessed to a borrower if an account is paid off before the due date.

PrePayment Penalty 

A fee charged by a lender if the borrower pays the loan off early, generally to make up for interest the lender anticipated earning but will not earn as a result of the payoff. Not all loans have a prepayment penalty. Sometimes a loan will have an optional prepayment penalty in exchange for a lower rate or fee.

PrePayment 

Paying on principal, or paying above the minimum payment required by the lender. In the beginning years of the loan, the minimum payment is usually all interest. Anything added to that payment would go to paying off the principal. The more the borrower prepays, the shorter the term of the loan will be. Be sure to check if there are any Prepayment Penalties.

PreQualification letter 

A letter from a mortgage lender that states that you are pre qualified to buy a home but does not commit the lender to a particular mortgage amount.

PreQualification

A meeting with a lender or mortgage broker to determine how much money the lender would probably be willing to lend to the borrower and how much the monthly payments would be. This is usually a free service with no guarantees.

Primary Residence/ Principal Residence 

The residence of the borrower which is intended to be occupied on a permanent basis.

Prime Rate 

The interest rate, that is charged by commercial financial institutions for loans made to those larger business borrowers that have the highest credit ratings, it is usually the best rate available.

Principal 

The amount of money borrowed to buy your house or the amount of the loan that has not yet been paid back to the lender. This does not include the interest you will pay to borrow that money. The principal balance (sometimes called the outstanding or unpaid principal balance) is the amount owed on the loan at any given time. It is the original loan amount minus the total repayments of principal you have made to date.

Private Mortgage Insurance (PMI) 

Insurance provided by non government insurers that protect lenders against loss if a borrower defaults. This insurance is usually required when a borrower makes less than a 20% down payment. When the borrower's equity in the property equals 20%, s/he may request the insurance to be cancelled.

Promissory Note (Loan Note) 

This document represents the legal, contractual obligation of the debtor. The principal, interest rate, term and payment schedule, and default and delinquency provisions are reflected in this document.

Promissory Note 

A written promise made by one person to pay another person a certain sum of money on demand or at a future date.

Property Appreciation 

See Appreciation.

Purchase Money Mortgage 

The mortgage loan obtained to purchase a home.