Package Mortgage - Mortgage covering both real and personal property.
Paper- A mortgage, deed of trust or land contract provided in lieu of cash.
Permanent Loan or Mortgage - A mortgage for a long period of time. Often referred to as the mortgage that pays off a construction loan on a completed property.
PITI - Acronym for principal, interest, taxes and insurance, which may be combined in a single monthly mortgage payment.
Points - Fees paid to lenders. 1 point = 1 percent of the loan amount. On a $100,000 loan 1 point is $1000. Points may be further classified into origination points or discount points.
Prepaid Interest - Prepaid interest is the interest charged to borrowers at closing to pay for the cost of borrowing for a balance of the month. For example, if a loan closes on the 19th of the month and the first payment is due on the 1st of the following month, the lender will charge 12 days of prepaid interest.
Prepayment - Full or partial payment of the principal before the due date. This might occur if the borrower makes extra payments, sells the property, or refinances the existing loan.
Prepayment Penalty - Fees paid by the borrower if they pay the loan before it’s due date.
Primary Mortgage Market - Companies that originate and service mortgage loans (banks, savings & loans, credit unions, mortgage bankers, institutional lenders) make up the primary mortgage market.
Prime Rate - The lowest commercial interest rate charged by a bank on short term loans to their most credit worthy customers.
Principal - The outstanding balance on a loan.
Private Mortgage Insurance (PMI) - In the event that you do not have a 20 percent down payment, lenders will allow a smaller down payment - as low as 2 percent in some cases. With the smaller down payment loans, however, borrowers are usually required to carry private mortgage insurance. Private mortgage insurance payments are normally made annual or monthly. An impound account may be required.
