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Glossary of mortgage terms - M

Not sure what a MIG is or what fixed-rate and leasehold all means? We can help you through the maze of jargon with our easy-to-use mortgage glossary. Find the words you want using the buttons below.

Mortgage

Most of us do not buy our homes outright for cash - instead we borrow money to do so. There are no shortage of choices when it comes to deciding what kind of mortgage will suit you. The main types are repayment and interest only. In legal terms, a mortgage is a deed pledging freehold or leasehold property as security for a loan. The lender advances money and receives certain rights, including the authority to sell the property if repayments are not maintained. Your mortgage offer document sets out the details of the home loan.

Mortgage Guarantor

This is a person who will guarantee that the mortgage repayments are made in the event of default by the borrower. Usually this will be a parent or relative of a borrower. It should be remembered that a guarantor would be fully liable for repayment of the mortgage amount if a borrower defaults. The guarantor should therefore be confident that the borrower will meet all the necessary monthly payments.

Mortgage Indemnity Guarantee (MIG)

This is an insurance policy designed to protect the lender (the mortgagee) against loss in the event of you defaulting and ceasing to repay your mortgage. The policy may be insisted on by the lender at the start of the loan, but it’s usually the borrower who pays the premium. Some mortgage lenders have in the past been criticised for not explaining clearly enough that the policy is for their benefit, not that of the borrower. The premium payable is determined by the level of perceived risk to the home lender of you defaulting on the loan. In such circumstances, the lender would repossess and sell the property, possibly at a loss.

Mortgage Offer

This is the document issued by a mortgage ender to a prospective borrower following approval of the mortgage application. Your mortgage offer will set out in detail the conditions on which the mortgage is being made available to you and the mortgage term - the length of time over which the loan is being made available. Mortgage offers are typically peppered with legal terminology such as mortgagee (the lender) and mortgagor (the borrower) and the contract will set out whether the lender requires you to buy mortgage protection insurance.

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  1. To treat our customers fairly and with honesty and integrity in a courteous manner at all times.
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THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT

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