Partial Payment
A payment that is less than the total amount owed on a monthly mortgage payment. Normally, lenders do not accept partial payments. The lender may make exceptions during times of difficulty. Contact your lender prior to the due date if a partial payment is needed.
Payment Cap
A limit on how much an ARM’s payment may increase, regardless of how much the interest rate increases.
Payment Change Date
The date when a new monthly payment amount takes effect on an adjustable-rate mortgage (ARM) or a graduated-payment mortgage (GPM). Generally, the payment change date occurs in the month immediately after the interest rate adjustment date.
Payment Due Date
Contract language specifying when payments are due on money borrowed. The due date is always indicated and means that the payment must be received on or before the specified date. Grace periods prior to assessing a late fee or additional interest do not eliminate the responsibility of making payments on time.
Payoff
The satisfaction of a mortgage due to: Note maturity: Exception Code 60 Borrower prepayment: Exception Code 61 Repurchase: Exception Code 65 Borrower conversion of a convertible mortgage sold with repurchase option Exception Code 66
Payoff Date
The Payoff Date is the date the Servicer receives the amount necessary to pay off the Mortgage.
PITI – Principal, Interest, Taxes, and Insurance
The four elements of a monthly mortgage payment; payments of principal and interest go directly towards repaying the loan while the portion that covers taxes and insurance (homeowner’s and mortgage, if applicable) goes into an escrow account to cover the fees when they are due.
PITI Reserves
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.
PMI
Private Mortgage Insurance; privately-owned companies that offer standard and special affordable mortgage insurance programs for qualified borrowers with down payments of less than 20% of a purchase price.
Power of Attorney
A legal document that authorizes another person to act on your behalf. A power of attorney can grant complete authority or can be limited to certain acts or certain periods of time or both.
Pre-foreclosure Sale
A procedure in which the borrower is allowed to sell a property for an amount less than what is owed on it to avoid a foreclosure. This sale fully satisfies the borrower’s debt.
Pre-Qualify
A lender informally determines the maximum amount an individual is eligible to borrow. This is not a guaranty of a loan.
Premium
An amount paid on a regular schedule by a policyholder that maintains insurance coverage.
Principal
The amount of money borrowed to buy a house or the amount of the loan that has not been paid back to the lender. This does not include the interest paid to borrow that money. The principal balance is the amount owed on a loan at any given time. It is the original loan amount minus the total repayments of principal made.
Promissory Note
A written promise to repay a specified amount over a specified period of time.
Property Tax
A tax charged by local government and used to fund municipal services such as schools, police, or street maintenance. The amount of property tax is determined locally by a formula, usually based on a percent per $1,000 of assessed value of the property.
Property Tax Deduction
The U.S. tax code allows homeowners to deduct the amount they have paid in property taxes from their total income.
Purchase Offer
A detailed, written document that makes an offer to purchase a property, and that may be amended several times in the process of negotiations. When signed by all parties involved in the sale, the purchase offer becomes a legally binding contract, sometimes called the Sales Contract.
