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GLOSSARY OF MORTGAGE TERMS:
Page 1 of 2 | 21 terms beginning with 'P' Payment Adjustment Period The length of time (typically a year) between changes to the AML borrower's P&I payment. Payment Buy down Payment buy downs occur when a third party, typically a builder, pays part of the initial P&I payments for a year or two, so that the borrower has smaller payments and can qualify for the loan. Payment Cap A limit on the amount the payment can be changed at the end of each Payment Adjustment Period. Payment Discount In a payment discount, the lender reduces the first year's interest rate to make the mortgagor more attractive to borrowers. Periodic payment cap A limit on the amount that payments can increase or decrease during any one-adjustment period. Periodic rate cap A limit on the amount that the interest rate can increase or decrease during any one adjustment period, regardless of how high or low the index might be. Personal property Any property that is not real property. PITI Principal, Interest, Taxes and Insurance are components of a mortgage payment. Planned Unit Development (PUD) A project or subdivision that includes common property that is owned and maintained by a homeowners' association for the benefit and use of the individual PUD unit owners. 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. Points A one-time charge by the lender to increase the yield of the loan; a point is 1 percent of the amount of the mortgage. Power of attorney A legal document that authorizes another person to act on one’s behalf. A power of attorney can grant complete authority or can be limited to certain acts and/or certain periods of time. Prepayment Payment of mortgage loan, or part of it, before due date. Pre-qualification The process of determining how much money a prospective homebuyer will be eligible to borrow before application. Prime rate The interest rates that banks charge to their preferred customers. |