Real Estate & Investing Dictionary
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Package Mortgage
A mortgage, which in addition to encumbering real property also includes personal property such as a refrigerator, dishwasher, or oven.

Package Mortgage
Mortgage on both the purchased real estate and personal property of a durable type, with the entire amount financed is considered one mortgage.

Paper
Slang term for a loan note given instead of a cash payment.

Parcel
A piece of real property described in legal terms, numbered for assessor’s uses.

Parcel Map
A map of a given area, designed, drawn, and labeled for the purposes of identifying parcels and distinguishing them from one another in a given area.

Partial Payment
A payment that is not sufficient to cover the scheduled monthly payment on a mortgage loan. Normally, a lender will not accept a partial payment, but in times of hardship you can make this request of the loan servicing collection department.

Partial Payment
A payment that is not sufficient to cover the scheduled monthly payment on a mortgage loan.

Partial Payments
Payments that are less than the full payment the borrower owes on a loan.

Partnership
Two or more people associated for the purpose of carrying on business activities.

Pay Down
The amount of principle on a loan retired through payments at a given time.

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). Generally, the payment change date occurs in the month immediately after the interest rate adjustment date.

Payment Change Date
The date when a new monthly payment amount takes effect on an adjustable-rate mortgage (ARM) or a graduated-payment adjustable-rate mortgage (GPARM). Generally, the payment change date occurs in the month immediately after the adjustment date.

Percent Improvement
The amount of a structure assessed, typically by the county's assessing agency.

Performance Bond
A bond used to guarantee the specific completion of an endeavor in accordance with a contract.

Periodic Payment Cap
For an adjustable-rate mortgage where the interest rate and the minimum payment amount fluctuate independently of one another, this is a limit on the amount that payments can increase or decrease during any one adjustment period.

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.

Periodic Rate Cap
For an adjustable-rate mortgage, 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.

Personal Property
Any property that is not real property.

PITI
This stands for principal, interest, taxes and insurance. If you have an "impounded" loan, then your monthly payment to the lender includes all of these and probably includes mortgage insurance as well. If you do not have an impounded account, then the lender still calculates this amount and uses it as part of determining your debt-to-income ratio.

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.

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.

Planned Unit Development - PUD
A type of ownership where individuals actually own the building or unit they live in, but common areas are owned jointly with the other members of the development or association. Contrast with condominium, where an individual actually owns the airspace of his unit, but the buildings and common areas are owned jointly with the others in the development or association.

Plat Book
Shows the location of all land in county by section / township / range numbers and in towns and cities by lot and block numbers, with name of owner and the road and school district in which located, number of acres or dimensions of tract or lot, and survey number.

Plat Book
A public record containing maps of land showing the division into streets, blocks, and lots and indicating the measurements of the individual parcels.

PMI-Assisted Presale
An arrangement in which a private mortgage insurance company pay for part of the loss that occurs when a house with negative equity (one worth less than the balance on the existing mortgage loan) is sold by regular means prior to a foreclosure.

Point
A point is 1 percent of the amount of the mortgage.

Point
A one-time charge by the lender for originating a loan. A point is 1 percent of the amount of the mortgage.

Point of beginning
The origination and destination of a Metes & Bounds legal description.

Positive Cash Flow
When rental and other income exceeds all of the costs of ownership.

Positive Equity
The situation in which a house has a value in excess of what is due on the mortgage.

Posting
The act of placing a legal notice, such as a notice specifying the date, time and place of a foreclosure sale, on public display in the proper place for such notices.

Power Of Attorney
A written instrument (document) duly signed and executed by an owner of property that authorizes an agent to act on behalf of the owner.

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.

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.

Power Of Sale Clause
The clause in a deed of trust or mortgage, by which the borrower pre-authorizes the sale of a house to pay off the balance on a loan in the event of the borrower's default. Usually a trustee conducts the sale, although in some states the sheriff or constable does this.

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. Once a property is chosen, it must also meet the underwriting guidelines of the lender.

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.

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.

Prearranged Refinancing Agreement
A formal or informal arrangement between a lender and a borrower wherein the lender agrees to offer special terms (such as a reduction in the costs) for a future refinancing of a mortgage being originated as an inducement for the borrower to enter into the original mortgage transaction.

Preforeclosure Sale
A procedure in which the investor allows a mortgagor to avoid foreclosure by selling the property for less than the amount that is owed to the investor.

Preliminary Title Search
The first review of all previously recorded documents regarding a specific property, to make sure that the property may be sold.

Premium
An additional sum of money paid as an incentive for someone to do something.

Prepaids
The costs of purchasing a house that the buyer must pay at the time of closing to a party other than the seller.

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
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 Clause
A clause in a mortgage that gives a mortgagor the privilege of paying the mortgage indebtedness before it becomes due.

Prepayment Penalty
A fee that may be charged to a borrower who pays off a loan before it is due.

Prepayment Penalty
A fee that may be charged to a borrower who pays off a loan before it is due.

Primary Lender
The lender that deals directly with the borrower.

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.

Prime Rate
The interest rate that banks charge to their preferred customers. Changes in the prime rate influence changes in other rates, including mortgage interest rates.

Principal
The amount borrowed or remaining unpaid. The part of the monthly payment that reduces the remaining balance of a mortgage. More

Principal
The amount borrowed or remaining unpaid. The part of the monthly payment that reduces the remaining balance of a mortgage.

Principal Balance
The outstanding balance of principal on a mortgage. The principal balance does not include interest or any other charges. See remaining balance.

Principal Balance
The outstanding balance of principal on a mortgage. The principal balance does not include interest or any other charges. See remaining balance.

Principal Meridian
Longitudinal starting line from which range is measured to the East and West.

Principal, Interest, Taxes, and Insurance (PITI)
The four components of a monthly mortgage payment. Principal refers to the part of the monthly payment that reduces the remaining balance of the mortgage. Interest is the fee charged for borrowing money. Taxes and insurance refer to the amounts that are paid into an escrow account each month for property taxes and mortgage and hazard insurance.

Private Mortgage Insurance (MI)
Mortgage insurance that is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Most lenders generally require MI for a loan with a loan-to-value (LTV) percentage in excess of 80 percent.

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 MI for a loan with a loan-to-value (LTV) percentage in excess of 80 percent.

Pro Forma Statement
A financial statement based on anticipated, not actual, income and expenses.

Pro Rata
Buyers and sellers portion of prepaid or unpaid expenses such as real estate taxes.

Probate
Any action over which a Probate Court has jurisdiction.

Probate Court
A court having jurisdiction of estates, whether of a deceased, minor, or an incompetent person.

Promissory Note
A written promise to repay a specified amount over a specified period of time.

Promissory Note
See Note.

Promissory Note
A written promise to repay a specified amount over a specified period of time.

Promulgated Rate
A formally and publicly stated rate.

Property Condition
The physical state of the property.

Prorations
Allocation of closing costs and credits to buyers and sellers.

Public Auction
A meeting in an announced public location to sell property to repay a mortgage that is in default.

Public Auction
A meeting in an announced public location to sell property to repay a mortgage that is in default.

Purchase Agreement
A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.

Purchase and Sale Agreement
A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.

Purchase Money Mortgage
A mortgage given by a grantee in part payment of the purchase price of real estate.

Purchase Money Transaction
The acquisition of property through the payment of money or its equivalent.

Purchase Money Transaction
The acquisition of property through the payment of money or its equivalent.
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