Common Real Estate Terms & Mortgage Terms Explained - Part 9

More definitions for commonly used real estate terms and mortgage terms:

MLS (Multiple Listing Service)
A group of brokers joined together in a marketing organization for the purpose of pooling their respective real estate listings. In exchange for a potentially larger audience of buyers, the brokers agree to share commissions.

A Multiple Listing Service combines the listings for all available properties in an area, except For-Sale-By-Owner (FSBO) properties, in one directory or database.

In general, access to a Multiple Listing Service database is restricted to licensed real estate agents. Those agents pay a fee to view the listing database.

Mortgagee
A bank or other financial institution that lends money to the borrower. The borrower is considered the mortgagor.

Mortgage Acceleration Clause
A clause which allows a lender (mortgagee) to demand that the entire balance of the loan be repaid in a lump sum under certain circumstances. This often comes into effect when property is sold, or when title to the property is changed.

A mortgage acceleration clause can also be triggered into action when the loan is refinanced or the borrower defaults on a scheduled payment.

PMI (Private Mortgage Insurance)
Required on virtually all conventional loans with less than 20% downpayment. The payments for PMI are included in a mortgage payment and protects the lender against loan defaulters. On FHA loans, you will pay a MIP (Mortgage Insurance Premium) which accomplishes the same purpose.

Points
1 point is equal to 1% of the loan value, paid at closing. Points can be loan origination fees or "discount points" which reduce the interest rate of the loan (you are actually paying a finance charge up front). As an example, if a lender quotes a rate of 7.5% with 1 + 1 points, 1 point is for the origination fee and 1 point is for the discount fee.