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Glossary

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M

Glossary

We've organized the most common financial terms and explained them in simple, friendly ways.

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Medical Payments Coverage (MP)

In no-fault states, medical payments coverage is required for claims involving your own bodily injuries or those caused to passengers in your vehicle, up to the policy limit. 

Monthly Installment

With loans, this is the amount doe every month, which goes toward your principal balance and interest, in order to pay off your debt and remain in good standing with your lender.

Mortgage Insurance Premium (MIP)

For FHA loans, a mortgage insurance premium (MIP) is levied no matter the size of the down payment. If a borrower pays at least a 10% down payment, the MIP will be canceled after 11 years. However, if a borrower pays less than 10% on their down payment, they are required to pay the MIP over the life of the loan.

Mortgage Points

When closing on a house, a borrower will have the option to buy mortgage points from the lender, also known as discount points. This additional fee, tacked onto closing costs, is essentially a way to "buy down the rate" (i.e., lower the rate) of the mortgage and save on interest over the life of the loan.