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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.
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.
Permit
A document issued by a government authority that allows specific action to be taken such as
construction or modification of a building or the right to occupy a building.
Personal Property
Property that is not permanently fixed to land.
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 (PUD)
A project or subdivision that includes common areas
which is owned and maintained by a
homeowners' association
for the benefit and use of the individual PUD unit owners.
Point
A one-time charge by the lender for originating a
loan.
A point is 1 percent of the amount of the mortgage
or loan.
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.
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 in 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.
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 mortgageinsurance
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 PMI 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.
Prorate
To allocate between seller and buyer their proportionate share of the obligation paid or due.
Public Auction
A meeting in an announced public location to sell property to repay a
mortgage that is in
default.
Purchase 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.
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