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home :: Mortgage Terms
Glossary P
Mortgage Terms Glossary
P&Q
Payment cap: see cap.
Partial Claim: a loss mitigation option
offered by the FHA that allows a borrower, with help from a lender,
to get an interest-free loan from HUD to bring their mortgage
payments up to date.
P&I: abbreviation for principal and
interest.
PITI: Principal, Interest, Taxes, and
Insurance - the four elements of a monthly mortgage payment;
payments of principal and interest go directly towards repaying the
loan while the portion that covers taxes and insurance (homeowner's
and mortgage, if applicable) goes into an escrow account to cover
the fees when they are due.
PITIO: abbreviation for principal,
interest, taxes, insurance and other monthly non-housing costs.
PMI: Private Mortgage Insurance;
privately-owned companies that offer standard and special affordable
mortgage insurance programs for qualified borrowers with down
payments of less than 20% of a purchase price.
Points: charges levied by the lender
based on the loan amount. Each point equals one percent of the loan
amount; for example, two points on a $100,000 mortgage equals
$2,000. Discount points are used to buy down the interest rate.
Points can also include a loan origination fee, which is usually one
point.
Pre-approve: lender commits to lend to
a potential borrower; commitment remains as long as the borrower
still meets the qualification requirements at the time of purchase.
Pre-foreclosure sale: allows a
defaulting borrower to sell the mortgaged property to satisfy the
loan and avoid foreclosure.
Pre-qualify: a lender informally
determines the maximum amount an individual is eligible to borrow.
Premium: an amount paid on a regular
schedule by a policyholder that maintains insurance coverage.
Prepayment: payment of the mortgage
loan before the scheduled due date; may be Subject to a prepayment
penalty.
Prime rate: the interest rate
commercial banks charge their most creditworthy customers.
Principal: the amount borrowed from a
lender; doesn't include interest or additional fees.
Private Mortgage Insurance (PMI):
see mortgage insurance.
Property appraisal: see
appraisal.
Property tax: the amount which the
state and/or locality assesses as a tax on a piece of property.
Prorate: to proportionally divide
amounts owed by the buyer and the seller at closing.
Qualification: as determined by a
lender, the ability of the borrower to repay a mortgage loan based
on the borrower's credit history, employment status, assets, debts
and income.
Related
Topics:
Private Mortgages
First Time Home Buyer
Rent to Own Home
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