| Package Mortgage |
Mortgage covering both real and personal property. |
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| Panic Peddling |
The illegal practice of inducing panic selling in a
neighborhood by making representations of the entry, or prospective entry, of
members of a minority group; Blockbusting. |
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| Paper |
A mortgage, deed of trust, or land contract, which is given
instead of cash. |
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| Partial Payment |
A payment that is not sufficient to cover the scheduled
monthly principal and interest payment on a mortgage loan. |
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| Partial Release |
A release of a portion of property covered by a mortgage.
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| Party Wall |
Wall erected on line between adjoining properties for the use
of both properties. |
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| Payment Change Date |
The date when a new monthly payment amount takes effect on an
adjustable rate mortgage (ARM). Generally, the payment change date occurs in
the month immediately after the adjustment date and the borrower is notified 30
days prior as to the new rate. |
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| Payment (P&I) |
Your monthly mortgage payment, including principal and
interest, but excluding Tax and insurance payments. |
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| Payoff |
To pay the outstanding balance of a loan in full. |
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| Perc Test (Percolation) |
The test to determine the capability of the soil to absorb
liquid, both for construction and septic systems. |
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| Percentage Lease |
Lease in which all or part of rental is a specified percentage
of gross income from total sales made upon the premises. |
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| Percentage Point |
One percent of the loan amount or a measure of the interest
rate. |
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| Periodic Rate Cap |
A provision of an adjustable-rate mortgage (ARM) that limits
how much the interest rate or loan payments may increase or decrease. In upward
rate markets, it protects the borrower from large increases in the interest
rate or monthly payment at each adjustment period. See cap. |
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| Periodic Caps |
Periodic caps limit the change per adjustment period of a
loan. |
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| Periodic Payment Cap |
A provision of an adjustable-rate mortgage (ARM) that limits
how much the interest rate or loan payments may increase or decrease. In upward
rate markets, it protects the borrower from large increases in the interest
rate or monthly payment at each adjustment period. See cap. |
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| Permanent Mortgage |
A mortgage on completed construction on the same property
under one mortgage or trust deed. |
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| Person |
An individual, a partnership, or a corporation, foreign or
domestic. |
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| Personal Property |
Any property that is not real property or is not permanently
fixed to land. Cash, furniture, and cars are all examples of personal property.
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| Personalty |
Personal property; chattel. |
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| Physical Deterioration |
The loss of value to real property from all causes due to the
action of the elements and old age. Physical deterioration can be either
curable or incurable. |
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| Piggyback |
A combination of two loans. Example: A loan is made for 90% of
the home price. 80% of the purchase price is supplied by a 1st mortgage and 10%
by a 2nd mortgage. The 2nd mortgage is piggybacked on the 1st. |
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| PITI |
An abbreviation for the parts of a typical monthly mortgage
payment. PITI stands for principal-Interest-Taxes-Insurance. See principal,
interest, taxes, and insurance. |
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| 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.
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| PITI Payment |
A loan payment that combines Principal, Interest, Taxes and
Insurance. |
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| Plat |
A map or chart of a lot, subdivision or community drawn by a
surveyor showing boundary lines, buildings, improvements on the land, and
easements. |
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| Plat Book |
A record of recorded subdivisions of land. |
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| PMI (Private Mortgage Insurance) |
Stands for Private Mortgage Insurance. PMI is an insurance
policy the borrower buys to protect the lender from non-payment of the loan.
PMI policies are usually required if you make a down payment that is below 20%
of the sales price of the home. |
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| Points |
Sometimes called "discount points." A point is one
percent of the amount of the mortgage loan. For example, if a loan is for
$25,000, one point is $250. Points are charged by a lender to raise the yield
on his loan at a time when money is tight, interest rates are high, and there
is a legal limit to the interest rate that can be charged on a mortgage. Buyers
are prohibited from paying points on Department of Veterans Affairs guaranteed
loans (sellers can pay, however). On a conventional mortgage, or an FHA insured
mortgage, points may be paid by either buyer or seller or split between them.
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| Police Power |
The authority of a government to adopt and enforce law
governing the use of real estate based on the need to promote public safety,
health, and general welfare. |
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| Power Of Attorney |
A legal document authorizing one person to act on another's
behalf. A power of attorney can grant complete authority or can be limited to
certain acts and/or certain periods of time. |
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| Pre-qualification |
Getting pre-qualified for a loan is a free process and
normally takes between 15 minutes to an hour on the phone. The lender will ask
you some basic questions about your household income, time on the job, credit
history, down payment and personal savings. You should get pre-qualified before
looking for properties so you and your real estate agent know in what price
range to start looking. |
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| Pre-Approval |
A lender's conditional agreement to lend a specific amount on
specific terms to a home buyer. (subject to satisfactory appraisal and no
change in financial condition). You can shop with assurance, because you'll
know up-front how large a loan you could qualify for. |
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| Pre-Paid Interest |
Mortgage interest that is paid in advance of when it is due.
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| Pre-Paid Items (Prepaids) |
Items required by lender to be paid at closing prior to the
period they cover such as prorated property taxes, homeowners insurance and
pre-paid interest. |
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| Preforeclosure Sale |
A procedure in which the investor allows a mortgagor to avoid
foreclosure by selling the property, typically for less than the amount that is
owed to the lender. |
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| 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. |
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| Prepayment Privilege |
The right given to a purchaser to pay all or part of a debt
prior to its maturity. The mortgagee cannot be compelled to accept any payment
other than those originally agreed to. |
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| Prepayment Penalty |
A fee that may be charged to a borrower who pays off a loan
before it is due. Generally, a prepayment penalty is added to a loan in
exchange for a discounted rate. |
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| Prepayment Clause in a Mortgage |
Statement of the terms upon which the mortgagor (borrower) may
pay the entire or stated amount on the mortgage principal at some time prior to
the due date. |
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| 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. |
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| Prequalification |
The process of determining how much money a prospective home
buyer will be eligible to borrow before a loan is applied for. |
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| Primary Residence |
A residence which the borrower intends to occupy as the
principal residence. |
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| Primary Mortgage Market |
Lenders making mortgage loans directly to borrowers such as
savings and loan associations, commercial banks, and mortgage companies. These
lenders sometimes sell their mortgages into the secondary market such as FNMA
or GNMA. |
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| Prime Rate |
The interest rate that banks charge on short-term loans to its
most creditworthy customers. Changes in the prime rate influence changes in
other rates, including mortgage interest rates. |
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| Principal Balance |
The outstanding balance on a mortgage. The principal balance
does not include interest or any other charges. See remaining balance. |
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| Principal Payment |
Portion of your monthly payment that reduces the remaining
balance of a home loan. |
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| Principal |
The original amount a lender includes in a loan agreement that
does not include interest or other loan-related processing costs. Also, one of
the parties to a transaction. For example, the buyer and seller are principals
in the purchase of real property. |
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| Principle of Conformity |
An appraisal principle which holds that the maximum value is
realized when a reasonable degree of homogeneity (sameness) exists in a
neighborhood. |
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| 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 %. |
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| Pro-Rate |
To divide or distribute proportionally. At closing, various
expenses such as taxes, insurance, interest, rents, etc. are prorated between
the seller and buyer. |
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| Processing |
The preparation of a mortgage loan application and supporting
documentation for consideration by a lender on insurer. |
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| Promissory Note |
Following a loan commitment from the lender, the borrower
signs a note promising to repay the loan under stipulated terms. The promissory
note establishes personal liability for its repayment. |
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| Property Value |
LTV or Loan to Value Ratio refers to the relationship between
the unpaid principal balance of the mortgage and the property's appraised value
(or sales price if it is lower). |
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| Property Tax |
Generally, tax levied on both real and personal property.
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| Prorate |
To divide in proportionate shares, such as taxes, insurance,
rent, or other items. |
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| Public Auction |
A meeting in an announced public location to sell property to
repay a mortgage that is in default. |
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| 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. Also see DeMinimus PUD. |
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| Puffing |
Non-factual or extravagant statements and opinions made to
enhance the perceived desirability of a property. There is a fine line between
legal puffing and illegal misrepresentation, and puffing is best avoided. An
example of puffing would be, "This home has the best view in the
city". Also known as Puffery. |
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| Purchase Money Mortgage |
A Mortgage given by the buyer to the seller as part of the
purchase consideration, as opposed to a hard money mortgage. |
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| Purchase Agreement |
An agreement between buyer and seller denoting price and terms
of the sale. |
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| Purchase Offer |
A document that lists the price, terms and conditions under
which a buyer is willing to purchase a property. |
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| 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.
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| Purchase Price |
The total amount paid for a home. |
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| Purchase and sale agreement: |
A written agreement by which a buyer agrees to purchase and a
seller agrees to sell according to terms set forth in that agreement. |
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| Purchase Money Transaction |
A loan used in part as payment for a purchase. A loan that is
used to buy a home is called a purchase money mortgage. |