Margin - The lender's "retail markup" on the mortgage.

Market conditions - Factors affecting the sale and purchase of homes at a particular point in time.

Market value - The price that a piece of property sell for at a particular point in time.

Master planned community - A suburban plan that includes homes and commercial, work, educational and community facilities.

Maximum financing - A loan amount within 5 percent of the highest loan-to-value ration allowed for a property.

Mechanic's lien - Subcontractors or suppliers sometimes will file an encumbrance, or mechanic's lien, against a property to seek payment.

Mediation - A dispute-resolution process in which a neutral party works to resolve contract differences.

Median price - The price of the house that falls in the middle of the total number of homes for sale in that area.

Merged credit report - A report that draws information from the "Big Three" credit-reporting companies: Equifax, Experian and Trans Union Corp.

Metes and bounds - A land surveying method of describing land in terms of shape and boundary dimensions.

Mint condition - Mint condition, or blue ribbon condition, refers to a house that looks as close to new as possible.

Mixed-use development - A project that combines several different functions, such as residential space above a commercial establishment or an entire development combining commercial, residential and public accommodations.

Mortgage - A legal document specifying a certain amount of money to purchase a home at a certain interest rate, and using the property as collateral.

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

Mortgagor - The person who borrows money to purchase a house. The lender is called the mortgagee.

Mortgage acceleration clause - A clause which allows a lender to demand that the entire balance of the loan be repaid in a lump sum under certain circumstances. The acceleration clause is usually triggered if the home is sold, title to the property is changed, the loan is refinanced or the borrower defaults on a scheduled payment.

Mortgage banker - A company that provides home loans using its own money. The loans are usually sold to investors such as insurance companies and Fannie Mae.

Mortgage broker - A company that matches lenders with prospective borrowers who meet the lender's criteria. The mortgage broker does not make the loan, but receives payment from the lender for services.

Mortgage insurance - Required by lenders in some loans to protect them from a possible default. All conventional loans with less than a 20 percent down payment require private mortgage insurance, or PMI.

Mortgage interest deduction - The tax write off that the IRS allows most owners to claim for the annual interest payments they make on their real estate loans.

Mortgage life insurance - A special type of insurance that will pay off a mortgage if the borrower dies before the debt is retired.

Motivated buyer - Any buyer with a strong incentive to make a purchase.

Motivated seller - Any seller with a strong incentive to make a deal.

Move-in condition - A house that is ready for a new occupant.

Move up buyer - A buyer who has purchased a home before and is looking for a bigger or more expensive home.

Multiple listing service - The service combines the listings for all available homes in an area, except For-Sale-By-Owners (FSBO) properties, in one directory or database.

Multiple offers - Multiple purchase offers occur in hot markets or hot neighborhoods.

Negative amortization - The situation occurs when a borrower's monthly payment is not large enough to cover both the principal and interest of a loan. As a result, the outstanding balance of the loan actually grows larger with each payment rather than smaller. Most fixed-rate loans are not subject to negative amortization, but many adjustable-rate mortgages are susceptible.

Net worth - The worth of a person or company based on the difference between total assets and liabilities.

No cash out refinance - The amount of the new mortgage covers the remaining balance of the first loan, closing costs, any liens and cash no more than 1 percent of the principal on the new loan.

No-documentation loan - A loan application that does not require verification of income but typically is granted in cases of large down payments.

Non-assumption clause - A loan provision that prohibits the transfer of a mortgage to another borrower without lender approval.

Notice of default - A lender's initial action when a mortgage payment is late and attempts to reconcile the issue out of court have failed.

Option - A situation in which a buyer puts down money for the right to purchase a piece of real estate within a set time period but does not have an obligation to buy.

Original principal balance - The amount of principal owed on a loan before a borrower makes any payments.

Origination fee - A fee charged by most lenders (also called points) for processing a loan. A point is 1 percent of the total loan amount.

Owner financing - A transaction in which the seller of a property agrees to finance all or part of the purchase.

Patent defect - A visible deficiency in a piece of property, such as a cracked concrete slab.

Payment cap - A legal limit on the mortgage amount a monthly payment can increase on an adjustable-rate mortgage. 

Percolation test - A test used to determine the ability of soil to accommodate a septic system.

Personal property - Any moveable property in a house such as furniture or appliances.

Pest-control inspection - A common pest-control inspection is a termite inspection, which is required in some states, such as California.

PITI (principal, interest, taxes, insurance) - When a buyer applies for a loan, the lender will calculate the principal, interest taxes and insurance. The figure is designed to represent the borrower's actual monthly mortgage-related expenses.

Planned communities - The concept began in the 19th century and describes any town or neighborhood built with certain guidelines and goals.

Planned unit development - Residents own the home and the land, and share the use and financial responsibility for the common areas.

Possession - When a buyer signs the papers and receives the keys to the house, the buyer officially takes possession.

Power of attorney - A document that authorizes an individual to act on behalf of someone else.

Pre-approval letter - A letter from a lender that informs a seller about the amount of money that a potential buyer can obtain.

Pre-paid expenses - The costs for taxes, insurance and assessments paid before the due date.

Pre-paid interest - Interest paid before it is due.

Prepayment penalty - Lenders can impose a penalty on a borrower who pays a loan off before its expected end date.

Prequalification - Many lenders will prequalify a borrower who is shopping for a loan by completing a preliminary assessment of the buyer's ability to pay for a home.

Price range - The range of how much a buyer is willing to pay for a home.

Principal - The amount of money that the borrower owes on a mortgage.

Principle of conformity - The idea that a house will more likely appreciate in value if its size, age, condition and style are similar to, or conform to, other houses in the neighborhood.

Private mortgage insurance - A special type of loan insurance that many lenders require borrowers to purchase if the borrower's down payment is less than 20 percent of the home's purchase price.

Probate sale - A real estate sale triggered by the death of the owner, with proceeds to be divided among heirs or creditors.

Production homes - Homes that are mass-produced by one builder in a project.

Property line - The official dividing line between properties.

Property report - A disclosure issued by the state when a time-share project is located or sold.

Property tax - Property taxes are calculated at about 1.5 percent of the current market value.

Property value - The value of a piece of property is based on the price a buyer will pay at a certain time.

Proration - Agreed upon percentages of certain expenses associated with a piece of property that must be paid by the buyer or the seller at the time of closing.

Purchase agreement - A document which details the purchase price and conditions of the transaction.

Purchase money mortgage - A mortgage that a borrower obtains to acquire a property.