partial payment
A payment that is not sufficient to cover the scheduled monthly payment on a mortgage loan.
payment change date
The date when a new monthly payment amount takes effect on an adjustable-rate mortgage (ARM) or a graduated-payment mortgage (GPM).
periodic payment cap
For an adjustable-rate mortgage (ARM), a limit on the amount that payments can increase or decrease during any one adjustment period.
periodic rate cap
For an adjustable-rate mortgage (ARM), 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. If you have an "impounded" loan, then your monthly payment to the lender includes all of these and may includes mortgage insurance as well.
PITI reserves
An amount 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 predetermined time.
point
Represents 1 percent of the amount of a mortgage.
power of attorney
A legal document that authorizes an individual to act on behalf of someone else.
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.
prefabricated
Any building or portion thereof which is manufactured and assembled off site, then erected on a property.
prepayment
Any amount paid to reduce the principal balance of a loan before the due date.
prepayment penalty
A fee that may be charged to a borrower who pays off a loan before it is due.
pre-qualification
The process of determining how much money a prospective home buyer will be eligible to borrow before he or she applies for a loan.
prime rate
The minimum short-term interest rate charged by commercial banks to their most creditworthy clients. Home loan rates typically are several points above the prime rate, which is also used as the basis for mortgages, business loans, and personal loans.
principal
The amount borrowed or remaining unpaid. This is the portion of the monthly payment that reduces the remaining balance of the mortgage.
principal balance
The outstanding balance of principal on a mortgage.
private mortgage insurance (PMI)
A form of insurance required by a lender when the borrower's down payment or home equity percentage is less than 20 percent of the home value. This insurance partially protects the lender if the borrower defaults on the loan.
promissory note
A written promise to repay a specific amount over a specified duration.
purchase agreement
A written contract signed by buyer and seller stating terms and conditions under which a property will be conveyed.
purchase money transaction
The acquisition of property through the payment of money or its equivalent.
qualifying ratios
Lenders compute qualifying ratios to determine how much a potential buyer can borrow.
quitclaim deed
A type of deed where a grantor (person with ownership interest) transfers all interests he or she has in a property. With this type of deed the person offers no warranties or promises about the title to the new owner.
rate lock
A commitment issued by a lender to a borrower or other mortgage originator guaranteeing a specified interest rate for a specified period of time at a specific cost.
real estate agent
A licensed professional who facilitates the buying and selling of real estate.
Real Estate Settlement Procedures Act (RESPA)
A consumer protection law that requires lenders to give borrowers advance notice of all closing costs.
real property
Land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof.
Realtor®
A real estate agent or broker who holds active membership in a local real estate board that is affiliated with the National Association of Realtors (NAR).
recorder
The public official who keeps records of transactions that affect real property in the area. Sometimes known as a "Registrar of Deeds" or "County Clerk."
recording
The noting in the registrar’s office of the details of a properly executed legal document, such as a deed, a mortgage note, a satisfaction of mortgage, or an extension of mortgage, thereby making it a part of the public record.
refinance transaction
The process of paying off one loan with the proceeds from a new loan using the same property as security.
rent loss insurance
A policy that covers any loss of rent or rental value in the event of fire or other damage that renders the property uninhabitable.
repayment plan
An arrangement made to repay delinquent installments or advances.
replacement reserve fund
An account, or fund, setup for the replacement of short life items , such as carpeting, in the common areas of a cooperative property.
revolving debt
Debt owned on an account that the borrower can repeatedly use and pay back without having to reapply every time credit is used. Credit cards are the most common type of revolving debt.
right of first refusal
An agreement by a property owner to give another person the right to buy or rent the property before it goes on the open market.
right of ingress or egress
The right to enter or leave designated premises.
right of survivorship
In joint tenancy, the right of survivors to acquire the interest of a deceased joint tenant.
