Real Estate Glossary – P
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Many of the terms used during real estate transactions may be new or unfamiliar. WashMetroHomes.com has provided the real estate dictionary to assist you with better understating the terms of buying and selling real estate and the terms contained in real estate contracts and/or forms.
In light of this, WashMetroHomes.com is providing this real estate dictionary with many terms common with buying and selling real estate. Each real estate transaction is unique and the terms are all different. If you are unclear about any specific area or meaning in a real estate contract, see the help of a real estate professional such as a Realtor, Mortgage Specialist, or a competent and qualified Attorney.
Great care and research was undertaken to provide accurate definitions and explanations for the real estate terms and words in our real estate dictionary. No one real estate dictionary can be 100% accurate in all jurisdictions. The definitions provided by WashMetroHomes.com in the real estate dictionary are for general purposes only and should not be used for legal purposes. Jennifer V-E Johnson and WashMetroHomes.com disclaim any responsibility for any liability, risk or loss that may be incurred or claimed incurred as a consequence of using this information.
WashMetroHomes.com hopes you benefit from using our real estate dictionary. partial payment payment change date periodic payment cap periodic rate cap personal property PITI PITI reserves planned unit development point power of attorney prearranged refinancing agreement preforeclosure sale prepayment prepayment penalty pre-qualification prime rate principal principal balance principal, interest, taxes and insurance (PITI) private mortgage insurance (MI) promissory note public auction PUD (Planned Unit Development) purchase and sale agreement purchase money transaction
A payment that is not sufficient to cover the scheduled monthly payment on a mortgage loan.
The date when a new monthly payment amount takes effect on an adjustable-rate mortgage (ARM) or a graduated-payment adjustable-rate mortgage (GPARM). Generally, the payment change date occurs in the month immediately after the adjustment date.
For an adjustable-rate mortgage (ARM), a limit on the amount that payments can increase or decrease during any one adjustment period.
For an adjustable-rate mortgage (ARM), 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.
Any property that is not real property.
See principal, interest, taxes and insurance (PITI) below.
A cash amount that a borrower must have on hand after making a down payment and paying all closing costs for the purchase of a home. The principal, interest, taxes and insurance (PITI) reserves must equal the amount that the borrower would have to pay for PITI for a predefined number of months.
See PUD below.
A one-time charge by the lender for originating a loan. A point is 1 percent of the amount of the mortgage.
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.
A formal or informal arrangement between a lender and a borrower wherein the lender agrees to offer special terms (such as a reduction in the costs) for a future refinancing of a mortgage being originated as an inducement for the borrower to enter into the original mortgage transaction.
A procedure in which the investor allows a mortgagor to avoid foreclosure by selling the property for less than the amount that is owed to the investor.
Any amount paid to reduce the principal balance of a loan before the due date. Payment in full on a mortgage that may result from a sale of the property, the owner’s decision to pay off the loan in full, or a foreclosure. In each case, prepayment means payment occurs before the loan has been fully amortized.
A fee that may be charged to a borrower who pays off a loan before it is due.
The process of determining how much money a prospective home buyer will be eligible to borrow before he or she applies for a loan.
The interest rate that banks charge to their preferred customers. Changes in the prime rate influence changes in other rates, including mortgage interest rates.
The amount borrowed or remaining unpaid. The part of the monthly payment that reduces the remaining balance of a mortgage. More
The outstanding balance of principal on a mortgage. The principal balance does not include interest or any other charges. See remaining balance.
The four components of a monthly mortgage payment. Principal refers to the part of the monthly payment that reduces the remaining balance of the mortgage. Interest is the fee charged for borrowing money. Taxes and insurance refer to the amounts that are paid into an escrow account each month for property taxes and mortgage and hazard insurance.
Mortgage insurance that is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Most lenders generally require MI for a loan with a loan-to-value (LTV) percentage in excess of 80 percent.
A written promise to repay a specified amount over a specified period of time.
A meeting in an announced public location to sell property to repay a mortgage that is in default.
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.
A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.
The acquisition of property through the payment of money or its equivalent.
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Courtesy of Jennifer V-E Johnson, Reston Expert and www.WashMetroHomes.com
