Mortgage and Loan Glossary (P)
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package mortgage
A mortgage agreement in which the principal amount loaned is increased
because personal property as well as real property serve as security.
pad site
A single freestanding retail site, often adjacent to a mall or larger
shopping center.
P&I
Principal and interest payments.
paper
Credit given, evidenced by a written obligation with property as collateral.
parcel
An individual piece of land, with its own legal description.
partial payment
A loan payment that is not great enough to cover the scheduled monthly
payment on a mortgage.
payment change date
The date when a new monthly payment amount takes effect on an adjustable-rate
mortgage (ARM). The payment change date usually occurs in the month
immediately after the adjustment date.
periodic payment cap
On an adjustable-rate mortgage (ARM), a limit on the amount that payments
can increase during a single adjustment period.
periodic rate cap
On an adjustable-rate mortgage (ARM), a limit on the amount that the
interest rate can increase during a single adjustment period.
Personal Income
Economic indicator that measures the total income of all Americans
from all sources, and is reported both before and after taxes. Also
reports personal spending and personal savings. The level of spending
can be used as an indicator of consumer optimism. Frequency: monthly.
Source: Commerce Department.
personal property
Any and all property that is not real property.
PITI
Principal, interest, taxes and insurance.
planned unit development (PUD)
A housing project that includes common property that is owned and maintained
by a homeowners' association for the benefit and use of the individual
unit owners.
PMI
See private mortgage insurance.
point
A one-time charge by the lender or broker for originating a loan. A
point is one percent of the total loan amount. An amount equal to
1 percent of the loan amount. Points may be paid by the borrower
at the time the loan is made to get a lower interest rate. Lenders
offer various rate/point combinations. Sometimes called a loan origination
fee.
power of attorney
A written legal instrument that authorizes another person to act on
one's behalf. A power of attorney can grant either complete or limited
authority.
pre-approval
A commitment made by a lender, to make a loan to a borrower, before
the borrower has committed to the purchase of a particular property.
preforeclosure sale
A process in which the lender allows a borrower to avoid foreclosure
by selling the property for less than the amount that may be owed
to the lender.
preliminary title report
A report prepared by a title company to show the state of the title
to a property, as the basis for issuing a title insurance policy.
prepayment
Any amount that is paid to reduce the principal balance, not interest,
of a loan before the due date.
prepayment penalty
A fee (usually substantial) that may be charged to a borrower who pays
off a loan before the end of its agreed upon term.
pre-qualification
Procedure to determine how much money a potential homebuyer will be
eligible to borrow prior to actually applying for a loan.
prime rate
The interest rate that banks charge to their best customers for short-term
loans. Changes in the prime rate can influence changes in other interest
rates.
principal
The amount borrowed or that remains to be unpaid. That part of a monthly
payment that reduces the remaining balance of a loan.
principal balance
The outstanding balance of principal on a loan Principal does not include
interest or fees.
private mortgage insurance (PMI)
Mortgage insurance provided by a private mortgage insurance company
to protect lenders against loss if a borrower defaults. Most lenders
require mortgage insurance for loans with a loan-to-value ratio above
80 percent. See also mortgage insurance.
Producer Price Index (PPI)
Measures the average level of prices of a fixed basket of goods received
in primary markets by producers. Monthly percent changes reflect
the rate of change in such prices. Changes in the PPI are widely
followed as an indicator of commodity inflation. Frequency: monthly.
Source: Labor Department.
Productivity
An economic indicator that measures the output per hour of work for
nonfarm business production. Can be used in conjunction with the
rate of change in GAP to determine whether economic growth is likely
to be inflationary. A separate component measures unit labor costs,
an important indicator of future inflation. Frequency: quarterly.
Source: Labor Department.
promissory note
A written promise to pay a specified sum to specified person over a
specified period of time.
property taxes
Taxes based on the assessed value of the home, paid by the homeowner
for community services such as schools, public works, and other costs
of local government. Sometimes paid as a part of the monthly mortgage
payment.
public auction
A gathering at a preannounced public location to sell property to satisfy
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.
Purchasing Managers Association of Chicago (PMAC) Survey
The PMAC Survey is a composite diffusion index of manufacturing conditions
in the Chicago area. Readings above 50% indicate an expanding factory
sector.