Package Mortgage
Mortgage covering both real and personal property.
Partial Release
A provision in a mortgage that allows some of the property secured
to be freed from serving as collateral.
Participation Mortgage
A mortgage that allows the lender to share in part of the income
or resale proceeds.
Pass Through Certificates
Interests in a pool of mortgages sold by mortgage bankers to investors.
Money collected as monthly mortgage payments is distributed to those
who own certificates.
Percentage Point
One percent of the loan amount or a measure of the interest rate.
PITI (Principal, Interest, Taxes, and Insurance)
The most common components of a monthly mortgage payment.
Planned Unit Development (PUD)
A zoning classification that allows flexibility in the design of
a subdivision. PUDs include individually owned units as well as
some common space that is jointly owned. See PUD below.
Plat
A plan or map of a specific land area.
Plat Book
A public record containing maps of land, showing the division of
the land into streets, blocks, and lots and indicating the measurements
of the individual parcels.
Points
Fees paid to lenders. 1 Point = 1% of the loan amount.
Example: On a $100,000 loan 1 Point is $1,000. Points may be further
classified into Origination points or loan "Discount"
Points.
Portfolio Loan
A loan that is held as an investment by a bank or savings and loan,
and not sold on the secondary market to investors.
Power of Attorney
A written document authorizing a person to act on the behalf of
another person. That person does not have to be an attorney.
Pre-Approval
A loosely used term which is generally taken to mean that a borrower
has completed a loan application and provided debt, income, and
savings documentation which an underwriter has reviewed and approved.
A pre-approval is usually done at a certain loan amount and making
assumptions about what the interest rate will actually be at the
time the loan is actually made, as well as estimates for the amount
that will be paid for property taxes, insurance and others. A pre-approval
applies only to the borrower.
Preliminary Title Report
The results of a title search by a title company prior to issuing
a title binder or commitment to insure clear title.
Prepaid Interest
Prepaid interest is the interest charged to borrowers at closing
to pay for the cost of borrowing for a balance of the month. Example:
A loan closes on the 19th of the month and the first payment is
due on the 1st of the following month, the lender will charge 12
days of prepaid interest.
Prepaid's
Expenses such as taxes, insurance and assessments which are paid
in advance of their due date and which must be paid by the buyer
on a prorated basis at closing.
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
This usually refers to the loan officer's written opinion of the
ability of a borrower to qualify for a home loan, after the loan
officer has made inquiries about debt, income, and savings. The
information provided to the loan officer may have been presented
verbally or in the form of documentation, and the loan officer may
or may not have reviewed a credit report on the borrower.
Primary Mortgage Market
Companies that originate and service mortgage loans (banks, savings
& loans, credit union, mortgage bankers, institutional lenders)
make up the primary mortgage market.
Primary Residence
A residence which the borrower intends to occupy as the principal
residence.
Prime Rate
The interest rate that banks charge to their preferred customers.
Changes in the prime rate are widely publicized in the news media
and are used as the indexes in some adjustable rate mortgages, especially
home equity lines of credit. Changes in the prime rate do not directly
affect other types of mortgages, but the same factors that influence
the prime rate also affect the interest rates of mortgage loans.
Principal Balance
The remaining balance due on a debt, exclusive of accrued interest.
Private Mortgage Insurance
Insurance written by a private company protecting the mortgage lender
against loss resulting from a mortgage default.
Probate
Court process to establish the validity of the will of a deceased
person.
Processing
The preparation of a mortgage loan application and supporting documentation
for consideration by a lender or insurer.
Property Tax
A government levy based on the market value (as assessed by the
county assessor's office) of the property.
PUD (Planned Unit Development)
A planned combination of diverse land uses, such as housing, recreation,
and shopping in one contained development or subdivision. A major
feature of a PUD includes areas of common land for use by the housing
unit owners; the association of unit owners generally owns, pays
fees, and maintains the common areas.
Purchase Contract (Agreement/Offer)
An agreement between a buyer and seller of real property, setting
forth the price and terms of the sale. Also known as a sales contract.
Purchase Money Mortgage
A mortgage used to finance the purchase of a property.
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