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.
pre-foreclosure 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.
PUD - Planned Unit Development
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.
