A | B | C | D | E | F | G | H | I | JK | L | M | N | O | P | Q | R | S | T | U | V | W | YZ |     Home Participation A mortgage where the lender receives a percentage of the gross proceeds along with the mortgage payments. Participation Certificates A mortgage security rather than a mortgage. The certificate is more readily marketable. Payment Adjustment Period The length of time, typically six months to a year, between changes to the AML borrower's P&I payment. Payment Buy Down Payment buy downs occur when a third party, typically a builder, pays part of the initial P&I payments for a year or two, so that the borrower has smaller payments and can qualify for the loan. Payment Cap A limit on the amount the payment can be changed at the end of each Payment Adjustment Period. Payment Discount In a payment discount, the lender reduces the first year's interest rate to make the mortgagor more attractive to borrowers. Payoff The full payment of an existing loan or any other type of lien. Perfecting Title The process of eliminating any adverse claims against a title. Periodic Payment Cap A limit on the amount that payments can increase or decrease during any one-adjustment period. Periodic Rate Cap 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 attached to real property. Physical Assessment Report Engineering and physical assessment of the property. Completed in addition to the appraisal. PITI Principal, Interest, Taxes and Insurance are components of a mortgage payment. PITI Ratio The ratio used in mortgage lending decisions that consists of the principal, interest, tax, and insurance payment to the total gross income. 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. Plat A map or chart of a lot, subdivision or community drawn by a surveyor showing boundary lines, buildings, improvements on the land, and easements. Pledged Account Mortgage (PAM) Money that is placed in a pledged savings account. This fund, and earned interest, is used to reduce monthly mortgage payments. Points Charges levied by the mortgage lender to obtain a better interest rate and usually payable at closing. One point represents 1% of the mortgage loan amount. Possibility of Reverter The term refers to the chance that an estate will exist as some future time. An example would be a property sold on the condition that it would be a park, but if not used for that, it would revert back to the seller who would then have a “possibility of reverter.” 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. Pre-approval A process whereby a potential home buyer secures a conditional credit approval before making an offer on a home. Pre-paids Those expenses of property which are paid in advance of their due date and will usually be prorated upon sale, such as taxes, insurance, and interest. Pre-qualification The process of determining how much money a prospective homebuyer will be eligible to borrow before application. Premium The amount paid for a property above the expected price, or the value of a mortgage or bond in addition to its face amount. Prepayment Payment of mortgage loan, or part of it, before due date. Prepayment Penalty (PPP) A charge imposed by a mortgage lender on a borrower who wants to pay off part or all of a mortgage loan in advance of schedule. Prescriptive Easement An easement granted by a court based on the assumption that a written easement was given after a period of continuous use of the land, although none existed. Prime Rate The interest rates that banks charge to their preferred customers. Principal The amount borrowed or remaining unpaid. Also, that part of the monthly payment that reduces the outstanding balance of a mortgage. Principal Balance The outstanding balance of principal on a mortgage, which does not include interest or any other charges. Private Mortgage Insurance (PMI) Insurance provided by nongovernmental insurers that protect lenders against loss if a borrower defaults. Fannie Mae generally requires private mortgage insurance for loans with loan-to-value (LTV) percentages greater than 80%. Pro rate The allocation of proportionate shares of certain expenses, such as interest, to be paid by the buyer and seller at closing. Promissory Note A written promise to repay a specified amount over a specified period of time. Property Classification A classification that a lender gives to a property according to its age and needed repairs. Property Tax Local tax assessed on the market value of a property Public Auction A meeting in an announced public location to sell property to repay a mortgage that is in default. Purchase Agreement See Agreement of Sale. Purchase Money Transaction The acquisition of property through the payment of money or its equivalent.