Mortgage and Real Estate Terms Sorted Alphabetically:
P – par, partial payment, partnership, party wall,
payment shock…more
PAR - a price of 100 percent of face value
PARTIAL PAYMENT - in loan collection, receipt of
less than the full payment due.
PARTNERSHIP - a business association of two or more
owners who share in the profits and losses of the
business. Partners are jointly and severally liable
for the debts of the business enterprise.
PARTY WALL - a wall built on a line between two adjoining
properties and common to both owners.
PAYMENT SHOCK - a scenario in which monthly mortgage
payments on an adjustable
rate mortgage (ARM) rise so high that the borrower
may not be able to afford the payments. Many consumer
protection guidelines regarding extremely low initial
"teaser" rates, lifetime ceilings, and annual
caps are designed to prevent payment shock.
PAYOFF FIGURES - the unpaid principal balance, plus
any negative escrow amounts, plus accrued and unpaid
interest, late charges, prepayment penalties, and
other possible fees, to be used for payment in full
of a mortgage or other lien.
PERMANENT FINANCING - a mortgage loan usually covering
development costs, interim loans, construction loans,
home
financing expenses, that is put in place when
the property is completed.
PERSONAL PROPERTY - any property that is not real
property (dirt).
PHYSICAL DEPRECIATION - decline in the value of a
physical asset or real property, resulting from normal
usage, age, wear and tear, disintegration or action
of the elements. Depreciation can be curable or incurable
sometimes.
PIGGY-BACK LOAN - the combination of both a first
and second
mortgage being recorded concurrently on a single
piece of property. A single mortgage lender may originate
both loans, or the loans may be originated by two
different lenders. In either event, the two loans
are recorded by priority.
PITI (PRINCIPAL, INTEREST, TAXES AND INSURANCE) -
the four components that (for most homeowners) are
included in the monthly mortgage payment. Principal
and interest are the portions of the payment assigned
to repay the mortgage itself; taxes and insurance
are paid by your lender into a special escrow account
to pay for homeowners insurance and property taxes.
POINTS (LOAN DISCOUNT POINTS) - prepaid interest
on a mortgage that is usually paid at the time of
closing. Each "point" is equal to one percent
of the total amount of a mortgage (one point on an
$80,000 mortgage is $800, or 1 percent of 80,000).
Most lenders offer mortgages with several combinations
of points and interest rates. Generally, the lower
the interest rate, the more points you will pay at
settlement, and the shorter the loans term will be.
Don't mix-up "points" and "closing
costs" in your mind (** SEE GOOD FAITH ESTIMATE
**).
POINTS (typically charged) - the residential FIRST
MORTGAGE market today for 'conforming' applicants
is in the zero to two, two and a half point range.
'Non-conforming' customers (about 60% of everybody
else) are charged generally one to three points, while
SECOND MORTGAGES are often in the two to five point
range at most home equity specialty companies, especially
when the typical customer today is looking for higher
Combined LTV's (CLTV).
PORTFOLIO LENDER - a funding source who holds loans
in their own portfolio and does not sell them to investors
in the secondary market. These lender/funding sources
usually hold the loans until their maturity, or until
the loan is paid off.
PRE-APPROVAL OR PRE-QUALIFICATION (pre-qual) - an
early assurance by a lender/loan banker that you appear
to meet the requirements for a specific type of loan.
Unless subsequent supporting documentation doesn't
adequately confirm the initial supplied information,
"pre-quals" rarely change.
PRELIMINARY TITLE SEARCH - a real property title
search a title insurance company conducts prior to
issuance of a title binder or commitment to insure.
PREPAID ITEMS - costs paid at closing for taxes,
interest, and insurance. Because prepaid items are
recurring costs that do not relate to the acquisition
of the real property itself, they cannot be financed.
PREPAID INTEREST - mortgage loan interest that is
paid in advance of when it is due to obtain tax advantages,
or as required by a lender at closing for the odd
days between he loan closing date and 30 days prior
to the first scheduled payment due date.
PREPAYMENT - the payment of all or part of a mortgage
debt before it is due.
PRE-PAYMENT PENALTY - a charge the mortgagor pays
the mortgagee, for the privilege to prepay the loan.
PRE-QUALIFICATION - evaluation of a potential borrower's
financial status, and other characteristics, to determine
the size and type of mortgage which is likely available
to him or her.
PRIME RATE - the interest rate commercial banks typically
charge their most creditworthy commercial customers
for short-term loans. "Prime" is a yardstick
for trends in interest rates, and it is often a baseline
for establishing interest rates on higher-risk loans.
Each bank sets its own separate "prime rate."
It does NOT directly affect mortgage rates like you
think it might!
PRIMARY RESIDENCE - the residence which the owner
physically occupies and uses as his or her home.
PRINCIPAL- the original balance of money lent, excluding
interest. Also, the remaining balance of a loan, excluding
interest.
PRIVATE MORTGAGE INSURANCE (pmi) - a policy of insurance
issued by an insurance company protecting the mortgage
lender against financial loss, in the event of a borrower
default on a mortgage loan. Borrower pays the premium,
the lender is the beneficiary of the insurance policy
(it's like the insurance company is the co-signer/guarantor
on the loan).
PRORATE - the allocation of proportionate shares
of income, ownership or of an obligation which a buyer
and seller share at the time of closing of a purchase
transaction.
PROMISSORY NOTE - a written promise to pay a specific
amount at a specified time.
PUD (Planned Unit Development) - a comprehensive
development plan for a large land area. A PUD usually
includes residences, roads, schools, recreational
facilities, commercial office and industrial areas.
Also, a subdivision having lots of areas owned in
common and reserved for the use of some or all of
the owners of the separately owned lots.
PURCHASE AGREEMENT - a written agreement/contract
as between a buyer and a seller of real property setting
forth the price and the other terms of the sale.
Mortgage Glossary - Mortgage and Real Estate Terms Sorted Alphabetically:
Mortgage
Glossary
A
- adjustable rate mortgage, adjustment interval, amortization,
annual percentage rate (APR) - more
B
- balloon mortgage, bankruptcy, basis point, beneficiary
- more
C
- caps, cash flow, cash out (second mortgage), cash
out refinance - more
D
- debt consolidation, debt service, debt reduction
plan, debt-to-income ratio - more
E
- earned and unearned income, earnest money, easement,
economic life - more
F
- Fair Credit Reporting Act, fair market value, Fannie
Mae - more
G
- good faith estimate, grace period, gradual payment
mortgage (GPM), grantee - more
H
- home equity, home improvement loan, Home Mortgage
Disclosure Act (HMDA) - more
I
- index, in file credit report, inflation, initial
interest rate, ingress and egress - more
L
- lender buy-down mortgage, liability insurance, LIBOR,
loan application - more
M
- manufactured home, market value, maximum loan amount,
mechanic's liens - more
N
- negative amortized (Neg/AM), Neg AM Loans, negative
cash flow, net worth - more
O
- obsolescence, off-site improvements, on-site improvements,
ordinary income - more
P
- par, partial payment, partnership, party wall, payment
shock - more
Q
- quality control, quit claim deed, quote - more
R
- rate shopper, real property, real estate loans,
reconciliation - more
S
- sales contract, satisfaction or mortgage, seasoned
mortgage, second mortgage - more
T
- tax lien, tenancy in common, tenant, term, title,
title insurance - more
U
- underwriting, unencumbered property, uniform commercial
code (UCC)ï -more
V
- VA (Department of Veterans Affairs) Mortgage, vacancy
rate, VA funding fee - more
