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P

Partial Claim
Option for loss mitigation that is offered by the FHA which allows a mortgage loan borrower with a willing lender to obtain an interest free loan from the HUD in order to bring their mortgage account out of deliquency.
RELATED MORTGAGE TERMS: Loss Mitigation
Partial Prepayment
See Prepayment
Pay Option Adjustable Rate Mortgage
Also known as a pay option ARM, this mortgage loan program offers a choice of typically three payment options. The highest payment amount in a pay option adjustable rate mortgage reduces the principal balance of the loan and pays for the accrued monthly interest. Usually the intermediate payment is sufficient enough to cover only the interest accrued for the month of the mortgage loan payment. The lowest payment amount in a pay option ARM results in a negative amortization which actually increases the principal balance amount of the mortgage loan.
RELATED MORTGAGE TERMS: Interest Payment|Negative Amortization|Principal Balance
MORTGAGE LOAN EXAMPLES: Pay Option Mortgage Loan
Pay Option ARM
See Pay Option Adjustable Rate Mortgage
Payment Adjustment Interval
Time between change of payment amount in an adjustable rate mortgage loan that may occur at a different time from the interest rate adjustment period.
Payment Change Date
Effective date for the adjusted monthly payment of either an adjustable rate mortgage loan or a graduated payment mortgage loan.
RELATED MORTGAGE TERMS: Adjustable Rate Mortgage (ARM)|Graduate Payment Mortgage (GPM)
Payment Decrease Cap
Calculated as a fraction of the recent payment, it is the maximum amount that a payment may decrease on the payment change date for an adjustable rate mortgage.
Payment Increase Cap
Calculated as a fraction of the recent payment, it is the maximum amount that a payment may increase on the payment change date for an adjustable rate mortgage.
Payment Period
Amount of time the is set between mortgage loan payments. Most loan programs use one month for the payment period, but other payment periods such as biweekly and bimonthly are offered by many mortgage loan lenders.
RELATED MORTGAGE TERMS: Bimonthly Mortgage|Biweekly Mortgage
Payoffs
In terms of a mortgage loan, payoffs refers to all of the payoff demands required by the lender to submit a mortgage loan application for approval. A common list for payoffs that many lenders require include a payoff demand for any existing prior mortgage loans and a payoff demand for all liens on title including any past due property taxes.
RELATED MORTGAGE TERMS: Lien|Payoff Demand
Payoff Demand
Document with an expiration date that is from a mortgage loan lender or other creditor which states the total amount necessary to bring a borrower's account balance to zero.
MORTGAGE LOAN EXAMPLES: Payoff Demand
Per Diem Interest
Amount of interest accrued each day from the mortgage loan closing date through the first day of the following month.
Periodic Payment Cap
Limit on the amount the monthly payment of a mortgage loan may increase or decrease during its loan payment period.
RELATED MORTGAGE TERMS: Payment Period
Periodic Rate Cap
Limit on the amount the interest rate for a mortgage loan may fluctuate during its correlating interest rate adjustment period.
RELATED MORTGAGE TERMS: Interest Rate Adjustment Period
Periodic Refinancing
Tactic used by a mortgage broker or loan officer for earning commission by originating unnecessary cash out refinance mortgage loans for an individual that has recently refinanced.
RELATED MORTGAGE TERMS: Cash Out Refinance|Loan Officer (LO)|Loan Origination|Mortgage Broker
Pest Inspection
See Termite and Pest Inspection
Piggyback Loan
Second mortgage loan that is acquired simultaneously with a first mortgage loan to completely finance the purchase or refinance of a real estate property. This practice is not uncommon and are sometimes referred to as a "80/20" loan program where the first mortgage loan is approved for 80 percent of the property purchase price, and the second mortgage loan is approved for the remaining 20 percent.
MORTGAGE LOAN EXAMPLES: Piggyback Mortgage Loan
PITI
Acronym representing the components of a mortgage loan monthly payment that stands for principal, interest, taxes, and insurance.
SIMILAR MORTGAGE TERMS: Monthly Housing Expense
PITI Reserves
Required by various mortgage loan lenders, PITI reserves are the cash amount a borrower must have after paying the down payment and closing costs for a real estate purchase. This cash amount is equal the amount one or more monthly payments would be for the approved mortgage loan including all accrued interest, property taxes, plus the monthly amount needed to maintain homeowners insurance.
RELATED MORTGAGE TERMS: PITI
Planned Unit Development (PUD)
Planned development of an entire community within a contained subdivision that include housing, shopping, and recreation all in one area.
Pledged Account Mortgage (PAM)
Mortgage loan program that uses a borrower's savings account to secure loan repayment by establishing a savings account with a borrower's submitted down payment and is used to automatically draw a supplemental amount for the loan's monthly payment.
MORTGAGE LOAN EXAMPLES: Pledged Account Mortgage Loan
PMI
See Private Mortgage Insurance
Point Monster
Mortgage broker or loan officer that has little regard for their clients and whose only purpose in the mortgage industry is to build rapport with potential borrowers so they can charge as many points to the borrower as legally allowable.
RELATED MORTGAGE TERMS: Predatory Lending
Points
In terms of a mortgage loan, a point typically equates an amount of money that is one percent of the total loan amount.
RELATED MORTGAGE TERMS: Discount Points|Rebate Points
Portfolio Lender
Mortgage loan lender that retains the loans it originates as part of their portfolio instead of selling them on the secondary market.
RELATED MORTGAGE TERMS: Secondary Market
Power of Attorney
Document signed by an individual to give authorization to a specified other for conducting business in their name.
MORTGAGE LOAN EXAMPLES: Power of Attorney
Preapproval
In terms of an actual mortgage loan, a preapproval is the mere acknowledgement of a lender or mortgage broker that they are willing to help an individual find a loan, but gives no guarantee for an actual approval of a mortgage loan.
Preapproval Letter
Document furnished by a mortgage loan lender that states an estimated loan amount that a potential borrower may obtain based on a glance of their credit history and information entered on their mortgage loan application. With this document a prospective real estate buyer may obtain the aid of a licensed real estate agent with greater ease.
MORTGAGE LOAN EXAMPLES: Preapproval Letter
Predatory Lending
Tactics used by a mortgage loan lender or its loan officers to obtain clients through deliberate deception, manipulation, or by confusing an individual into accepting loan programs that may not benefit them, or may benefit them less than other available loan programs.
RELATED MORTGAGE TERMS: Equity Skimming|Periodic Refinancing
Pre-foreclosure Sale
Option granted to a defaulting mortgage loan borrower that allows them the chance to sell the property in order to satisfy their debt and avoid foreclosure.
RELATED MORTGAGE TERMS: Foreclosure
Premium
In terms of real estate and mortgage loans, it is an amount paid for each year of home ownership by an individual to maintain home insurance coverage.
Prepaid Expenses
In terms of the settlement charges for a mortgage loan, this item includes the payment of property taxes and insurance premiums for a specified amount of time.
MORTGAGE LOAN EXAMPLES: Prepaid Expenses
Prepaid Interest
Item that is commonly found in the settlement charges of a mortgage loan which represents the payment of interest before its due date.
MORTGAGE LOAN EXAMPLES: Prepaid Interest
Prepayment
Full payment of a mortgage loan prior to the end of the term specified in the loan agreement.
Prepayment Penalty
Fee charged to a borrower by the lender of their mortgage loan that incurs as a result of a borrower refinancing their property before the time specified in the loan agreement. Two years is a common amount of the time that a lender requires a borrower to wait to refinance without charging prepayment penalty.
Prequalification
Quick analysis of a potential borrower's situation and qualifications to determine their eligibility for obtaining a mortgage loan.
Prequalification Letter
See Preapproval Letter
Primary Mortgage Market
Market composed of potential real estate buyers and eager property sellers that is catered by banks and lenders of mortgage loans.
Primary Residence
Property owned by an individual in which they reside in for a majority of their time.
RELATED MORTGAGE TERMS: Investment Property (IP)|Second Home
MORTGAGE LOAN EXAMPLES: Primary Residence
Prime Borrower
Mortgage loan applicant that qualifies for prime rates due to their excellent credit history, amount of equity held in their home, and their income which is high in proportion to their monthly expenses.
RELATED MORTGAGE TERMS: Prime Rate|Subprime Borrower
Prime Lender
Mortgage loan lender that specializes in providing low interest rate loan programs to prime borrowers.
RELATED MORTGAGE TERMS: Prime Borrower|Subprime Lender
MORTGAGE LOAN EXAMPLES: Prime Lender
Prime Rate
Interest rate charged by banks on a mortgage loan that is only approved for their most preferred customers.
Principal
Portion of the monthly payment for a mortgage loan that was borrowed not including interest and other charges.
Principal Balance
In terms of a mortgage loan, it is the amount of borrowed money that is still unpaid not including interest and other charges.
SIMILAR MORTGAGE TERMS: Balance
Principal, Interest, Taxes, and Insurance (PITI)
See PITI
Private Mortgage Insurance (PMI)
Insurance policy that covers losses to a lender from a default on a mortgage loan by the borrower. Monthly payments for this insurance are usually required to be made by borrowers that cannot pay a down payment that is over twenty percent of the entire mortgage loan amount.
Processing
In terms of the mortgage loan process, it typically refers to a stage where all of the applicant's information and submitted documents are verified for accuracy.
Processing Fee
Settlement charge to a borrower for gathering, organizing, and verifying information required to obtain a mortgage loan approval.
MORTGAGE LOAN EXAMPLES: Processing Fee
Proof of Residence
Documents used to verify the identity of the mortgage loan applicant that may be a state issued drivers license, passport, and a social security card.
Property Flipping
Method for obtaining rapid revenue from capital gains by purchasing a property within an area where surrounding property values are falling, and then selling the purchased property once values in the area begin to rise back up.
Property Insurance
Insurance policy that is required by most lenders in approving a mortgage loan that covers loss or damage to a property, may cover personal assets within a property, and even the personal liability of a property.
SIMILAR MORTGAGE TERMS: Hazard Insurance
MORTGAGE LOAN EXAMPLES: Property Insurance
PUD
See Planned Unit Development (PUD)
Purchase Agreement
See Agreement of Sale

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