A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
P
- PAM
See Pledged account mortgage.
- Payment
change date
The date when a new monthly payment amount takes effect on an adjustable-rate mortgage
(ARM) or a graduated-payment mortgage (GPM). Generally, the payment change date occurs in
the month immediately after the adjustment date.
- Periodic
payment cap
For an adjustable-rate mortgage (ARM), a limit on the amount that payments can
increase or decrease during any one adjustment period. See Caps (payment).
- Permanent
loan
A long term mortgage, usually ten years or more. Also called an "end loan."
- PITI
See Principal, Interest, Taxes
and Insurance.
- Plat
A map or chart of a lot, subdivision or community drawn by a surveyor showing boundary
lines, buildings, improvements on the land, and easements.
- Pledged
account mortgage (PAM)
Money is placed in a pledged savings account and this fund plus earned interest is
gradually used to reduce mortgage payments.
- PMI
See Private mortgage insurance.
- Points (loan discount points)
Prepaid interest assessed at closing by the lender. Each point is equal to 1 percent of
the loan amount (e.g., two points on a $100,000 mortgage would cost $2,000).
- Power
of attorney
A legal document that authorizes another person to act on one's behalf. A power of
attorney can grant complete authority or can be limited to certain acts and/or certain
periods of time.
- Pre-Approval
The process of determining how much money you will be eligible to borrow before you apply
for a loan.
- Preferred
stock
Stock that takes priority over common stock with regard to dividends and liquidation
rights. Preferred stockholders typically have no voting rights.
- Pre foreclosure sale
A procedure in which the borrower is allowed to sell his or her property for an amount
less than what is owed on it to avoid a foreclosure. This sale fully satisfies the
borrower's debt.
- Prepaid expenses
Necessary to create an escrow account or to adjust the seller's existing escrow account.
Can include taxes, hazard insurance, private mortgage insurance and special assessments.
- Prepayment
Payment of mortgage loan, or part of it, before due date. Mortgage agreements often
restrict the right of prepayment either by limiting the amount that can be prepaid in any
one year or charging a penalty for prepayment. The Federal Housing Administration does not
permit such restrictions in FHA insured mortgages.
- Prepayment
penalty
Money charged for an early repayment of debt. Prepayment penalties are allowed in some
form (but not necessarily imposed) in many states.
- Pre-qualification
The process of determining how much money a prospective home buyer will be eligible to
borrow before he or she applies for a loan.
- Primary
mortgage market
Lenders making mortgage loans directly to borrower's such as savings and loan
associations, commercial banks, and mortgage companies. These lenders sometimes sell their
mortgages into the secondary mortgage markets such as to FNMA or GNMA, etc.
- Prime rate
The interest rate that banks charge to their preferred customers. Changes in the
prime rate influence changes in other rates, including mortgage interest rates.
- Principal
The amount borrowed or remaining unpaid. The part of the monthly payment that reduces the
remaining balance of a mortgage.
- Principal
balance
The outstanding balance of principal on a mortgage not including interest or any other
charges.
- Principal, Interest, Taxes, and
Insurance (PITI) also called monthly housing expense.
The four components of a monthly mortgage payment. Principal refers to the part of the
monthly payment that reduces the remaining balance of the mortgage. Interest is the fee
charged for borrowing money. Taxes and insurance refer to the amounts that are paid into
an escrow account each month for property taxes and mortgage and hazard insurance.
- Private
mortgage insurance (PMI)
Mortgage insurance that is provided by a private mortgage insurance company to protect
lenders against loss if a borrower defaults. Most lenders generally require MI for a loan
with a Loan-to-value (LTV) percentage in excess of 80 percent.
- Purchase and sale agreement
A written contract signed by the buyer and seller stating the terms and conditions under
which a property will be sold.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
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