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M

Term Definition
Management Agreement
A contract between a property’s owner and a person who agrees to manage the property.

Margin
A fixed amount over an index that determines the yield of a lender on an adjustable rate loan. An adjustable rate loan’s index rate is determined by adding a margin to an index. The margin’s size is typically a function of the index used and the credit worthiness of the borrower. Typical margins on a Prime Rate-based loan are between 0.0 to 5.0. For example, if the Prime Rate is 8.25% and the margin is 2.0 (which is typical for an "average" borrower), the interest rate is 10.25% (8.25 + 2.0). (See definition of "index" above.)

Marketable Title
A title that is free from any defects.

Master Lease
A controlling lease on a property.

Maturity
The date on which a borrower must pay the principal balance of a loan, bond, or other financial instrument.

Maximum Financing
A loan amount that comes within 5 percent of the highest allowed loan-to-value ratio on a property.

Mechanic's Lien
A lien placed upon a building or other improvement that functions as security for the payment of labor and materials furnished for improvement.

Merged Credit Report
A report that combines information from Equifax, Experian, and Trans Union Corporation—the "big three" credit companies.

Minimum Payment
The minimum amount that must be paid on an account each month. Includes payments to the principal as well as interest.

Modified Internal Rate of Return (MIRR)
In certain cases, IRR tends to overstate the true rate of return. The IRR measure assumes that every cashflow received over time by investor is reinvested at the internal rate of return. So for example, if you have an IRR of 20% at the end of year 15%, the calculation assumes that each cashflow receinved in years 1-14 is reinvested at 20%. In reality, this may or may not be the case, since it may be tough to constantly find other investments that yield 20%. For that reason, it's prudent to also use the MIRR measure. This calculation allows you to specify the cost of your capital as well as the reinvestment rate you expect to achieve when investing the cashflows from the property. Note that for certain under-performing investments, MIRR will actually be higher than IRR, if you reinvest the cashflows at a higher rate than the IRR.

Monthly Mortgage Insurance (MI) Payment
The portion of a monthly payment that covers Private Mortgage Insurance’s cost.

Monthly Payment (P&I)
The monthly mortgage payment on a home loan. The payment includes principal and interest, but excludes any amounts applied to taxes and insurance.

Monthly Principal & Interest (P&I) Payme
A portion of a monthly payment that covers a loan’s principal and interest due.

Monthly Taxes & Insurance (T&I) Payment
A portion of a monthly payment that covers the escrow or impound account for purposes of taxes and insurance.

Mortgage
A lien against real property received by a lender from the borrower that functions as security for money borrowed.

Mortgage (Open-End)
A mortgage that allows additional money to be borrowed without the obligation to refinance the loan or pay additional finance charges. The amount borrowed must not exceed the original loan amount.

Mortgage Balance
See Principal Balance.

Mortgage Insurance Premium (MIP)
The payment that a borrower of FHA-insured mortgages makes in order to provide a reserve protecting lenders against losses from very high loan-to-value loans.

Mortgage Loan
A loan that is secured by a mortgage lien against a real property.

Mortgage-Interest Deduction
A tax deduction that the Internal Revenue Service allows most owners to claim. Under this deduction, owners may deduct annual interest payments made on real estate loans.

Mortgagee
The person to whom the mortgage is given—the lender.

Mortgagor
The person who gives the mortgage--the borrower.

Multi-Dwelling Property
A property containing individual units for two or more households, but holds only a single mortgage.

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