partial payment
A payment that is not sufficient to cover the scheduled
monthly payment on a mortgage loan.
payment change
date
The date when a new monthly payment amount takes effect
on an adjustable-rate mortgage (ARM) or a
graduated-payment adjustable-rate mortgage (GPARM).
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 cap.
periodic rate cap
For an adjustable-rate mortgage (ARM), a limit on the
amount that the interest rate can increase or decrease
during any one adjustment period, regardless of how high
or low the index might be. See cap.
personal property
Any property that is not real property.
PITI
See principal, interest, taxes, and insurance (PITI).
PITI reserves
A cash amount that a borrower must have on hand after
making a down payment and paying all closing costs for
the purchase of a home. The principal,
interest, taxes, and insurance (PITI) reserves must equal the
amount that the borrower would have to pay for PITI for a predefined
number of months.
planned unit
development
See PUD.
point
A one-time charge by the lender for originating a loan. A
point is 1 percent of the amount of the mortgage.
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.
prearranged
refinancing agreement
A formal or informal arrangement between a lender and a
borrower wherein the lender agrees to offer special terms
(such as a reduction in the costs) for a future
refinancing of a mortgage being originated as an
inducement for the borrower to enter into the original
mortgage transaction.
preforeclosure
sale
A procedure in which the investor allows a mortgagor to
avoid foreclosure by selling the property for less than
the amount that is owed to the investor.
prepayment
Any amount paid to reduce the principal balance of a loan
before the due date. Payment in full on a mortgage that
may result from a sale of the property, the owner's decision to pay off the loan in full,
or a foreclosure. In each case, prepayment means payment occurs before the loan has been fully
amortized.
prepayment penalty
A fee that may be charged to a borrower who pays off a
loan before it is due.
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.
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. The
principal balance does not include interest or any other
charges. See remaining balance.
principal,
interest, taxes, and insurance (PITI)
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 (MI)
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.
promissory note
A written promise to repay a specified amount over a
specified period of time.
public auction
A meeting in an announced public location to sell
property to repay a mortgage that is in default.
Planned Unit Development (PUD)
A project or subdivision that
includes common property that is owned and maintained
by a homeowners' association for the benefit and use of
the individual PUD unit owners.
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.
purchase
money transaction
The acquisition of property through the payment of money
or its equivalent.
|