P

PAR: The principal amount of the mortgage without any premium or discount points.

Partial Release: A mortgage that has a clause that releases some of the property securing a loan as collateral.

Payment Schedule: A statement usually provided by the lender that outlines the payment dates and amounts.

Periodic Adjustment Cap: Limits the amount the interest rate can change at any future time on an adjustable rate mortgage.

Permanent Loan: A loan that usually has a loan term of at least ten years is considered permanent or long-term.

Piggyback Loan: A loan secured by a second trust deed or second mortgage.

PITI: Principal, Interest, Taxes and Insurance.

Pledged Account Mortgage (PAM): Money that is placed in a pledged savings account that is combined with earned interest that is used to gradually reduce mortgage payments.

Planned Unit Development (PUD): A single-family residence that is part of a planned community that charges association dues and other monthly payment requirements that are used for the upkeep of the community (i.e. pool, landscape, etc…)

Points: One point is 1% of the principal amount of the loan. Points are generally charged ny lenders and brokers are fees for the loan.

Portfolio Loan: A loan that is kept as an investment by the bank issuing the loan and is not sold in the secondary market.

Power of Attorney: A written document authorizing someone to act on the behalf of another person as an Attorney in Fact.

Preliminary Title Report (PRELIM): A public report showing all of the current claims against a property.

Prepaid Expenses: This is necessary to create an escrow account or to adjust the seller's existing escrow account. Prepaid expenses may include taxes, PMI, hazard insurance, and special assessments.

Prepaid Interest: Interest charged for the remaining time before the first mortgage payment is due.

Prepayment: Full or partial payments of the mortgage made before their due date. Some lenders do not like prepayments because their investors are looking for a constant return for a specific period of time and do not want to paid off right away.

Prepayment Penalty: A penalty fee charged by the lender for paying off a loan before the due date.

Primary Mortgage Market: Companies that originate and service mortgage loans. These include: savings and loan associations, commercial banks, and mortgage companies.

PRIME: A rate index that is the most widely used by banks to charge corporations when making loans.

Principal: The amount of debt on a loan not including interest.

Principal and Interest: The monthly mortgage payment which includes both the principal and interest amounts.

Private Mortgage Insurance (PMI): Insurance that covers the potential loss by a lender and is usually only required on a loan that has a greater loan-to-value than 80%. The extra premium is included in the monthly payment until the borrower has paid the loan down to the 80% loan-to-value mark.

Profit and Loss Statement (P & L): Also known as the income statement, which shows the revenues and expenses of a business to determine whether the business made money or suffered a loss.

Promissory Note: A written document signed by both parties stating that the borrower promises to pay the debt owed to the seller and details the conditions as well as the date and time that the debt will be paid by.

Purchase Agreement: A contract between the buyer and seller containing the purchase price and contingencies of the sale of the property.