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Glossary of Terms - P

To better understand some of the industry terms and technical language used during the process of borrowing money for real estate purchases, search our glossary index. You will be talking the talk with one of our mortgage professionals in no time! If you still have questions, contact us.

PITI

An acronym for payments to lender that cover principal, interest, taxes and insurance on a property.

Plat

A map of a piece of land showing boundary lines, streets, actual measurements and easements.

Point

A fee paid to the lender on closing day to increase the effective yield of the mortgage. A point is one percent of the amount of the mortgage loan. Also called a discount point.

Prepayment Penalty

A charge paid to the lender by the borrower if a mortgage loan is repaid before its term is over.

Pre-Approval

A commitment by a lender to extend credit provided that specific conditions are met.

Pre-Qualification

A preliminary assessment of a buyer's ability to secure a loan, based on a specific set of lending guidelines and buyer representations made. This is not a guarantee or commitment by a lender to extend credit.

Prime Rate

The interest rate charged by banks to their preferred corporate customers. Tends to be an estimator for general trends in short term interest rates.

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

PMI (Private Mortgage Insurance)

Insurance written by a private mortgage insurance company to protect the lender against losses caused by mortgage default. This is commonly required on loan transactions involving less than a 20% down payment or equity position.


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