| Term |
Definition |
| Partial claim |
An option offered by the FHA that allows a delinquent borrower to get an interest free loan from the HUD in order to bring their payments up-to-date |
| Payment due date |
The day of the month payments are due. Payments must be received on or before this date in order to avoid late fees. |
| Partial payment |
A payment that is less than the usual stated monthly due amount on a loan |
| Perils |
In homeowner's insurance, anything that may pose a threat of damage to the property, such as bad weather |
| Periodic cap |
The maximum rate increase for a specific period for a specific loan (ARM) only. |
| Personal property |
Any object that is not permanently attached to real property, such as furniture. An installed fixture, however, would be considered real property because it is attached to the property. |
| PITI |
Principal, interest, taxes and insurance--the components of a monthly mortgage payment. |
| PITI reserves |
The cash amount a borrower must still have available after paying the down payment and all closing costs |
| Planned Unit Developments (PUD) |
A subdivision of five or more individually owned lots with one or more other parcels owned in common or with reciprocal rights in one or more other parcels. |
| Plat |
A map that shows all boundaries of a piece of property. |
| PMI |
Private Mortgage Insurance |
| Points |
Charges levied by the mortgage lender and usually payable at closing. One point represents 1% of the face value of the mortgage loan. |
| Power of Attorney |
A document appointing a person you have authorized to act on your behalf |
| Pre-approval |
A process whereby a potential home buyer secures a guaranteed mortgage approval before making an offer on a house. A lending institution guarantees in writing to grant a loan for a specified amount. Not to be confused with pre-qualification. |
| Predatory lending |
Lending practices that are abusive to borrowers, such as lending to someone who cannot repay the loan. |
| Predictive variables |
Variables in the credit scoring formula used to predict an individual's future credit performance |
| Pre-foreclosure sale |
A circumstance in which a borrower may sell the property for less than what he/she owes on it |
| Prepaids |
Those expenses of property which are paid in advance of their due date and will usually be prorated upon sale, such as taxes, insurance, rent, etc. |
| Prepayment |
Payment of the full balance of the loan before the scheduled due date |
| Prepayment penalty |
A charge imposed by a mortgage lender on a borrower who wants to pay off part or all of a mortgage loan in advance of schedule. |
| Pre-qualification |
Some lenders "pre-qualify" mortgage applicants in less than an hour by performing cursory checks. Seldom can a lender fully check an applicant's credit, asset and debt status this quickly, so final approval typically takes at least a few more days. Though such preliminary pre-qualifications may soon lead to a full pre-approval, there is no guarantee until the applicant receives a letter, certificate or wallet-size card bearing the mortgage-holder's name and maximum loan amount. |
| Prime rate |
The best interest rate that banks charge - usually to "preferred customers." Changes in this rate are publicized. Prime rate is often used as the basis for ARMs. |
| Principal |
Amount of debt, not including interest. The face value of a note or mortgage. |
| Private mortgage insurance (PMI) |
Insurance provided by nongovernment insurers that protects lenders against loss if a borrower defaults. Fannie Mae generally requires private mortgage insurance for loans with loan-to-value (LTV) percentages greater than 80%. |
| Promissory note |
A document stating a promise to repay a specific amount over a specific period of time |
| Property |
Land within the legal boundaries, including all permanently attached fixtures |
| Property tax |
A local government charge (calculated by a local formula based on a percentage of the property value) to property owners, used to fund public services such as schools, police, or transportation |
| Property tax deduction |
The IRS allows homeowners to deduct the annual amount paid in property taxes from their annual income |
| Purchase offer |
The intial form of what may become a sales contract; a purchase offer is a written document that makes an offer to purchase a property and may be amended multiple times by both paries before an agreement is reached |
