| P.M.I.Private Mortgage Insurance. | An insurance contract which insures that the named lender will recover a specific percentage of the loan amount from the insurer in the event the loan goes bad. Many lenders require this on higher percentage loans. |
| PARTITION | The forced division of land among parties who were formerly co-owners. A partition suit may ask to divide the land or if that is not practical, sell the land and divide the proceeds. |
| PATENT | A document or grant by which the Federal or State government originally transferred title to public lands to an individual. The first in the series of transfers by which title comes down to present owners. |
| PAYMENT CAP | A limit on the amount that the monthly payment on an adjustable rate mortgage can increase or decrease at each adjustment period. For example, if your monthly payments start at $1,000 and the ARM has a payment cap of 7.5%, the next adjustment cannot exceed. |
| PIPESTEM LOT | A lot connected to a public street by a narrow strip of land. Usually several adjacent pipestems are combined to form one driveway with each owner having a mutual-reciprocal easement to use and maintain the driveway to the street. |
| PITI | Short for principal, interest, taxes, and insurance. These are the basic monthly housing costs that lenders consider when evaluating a borrower's qualification for a loan, as in: the PITI may not exceed 28% of the borrower's gross monthly income. |
| PLANNED UNIT DEVELOPMENT (PUD) | A subdivision having lots or areas in common and reserved for the use of some or all of the owners of the separately owned lots. |
| PLAT OR PLOT | A map representing a piece of land subdivided into lots with streets shown thereon. |
| POINT | A dollar amount paid to the lender form making a loan. A point is usually 1% of the loan amount. |
| POLICY | A written contract of title insurance. |
| POLICY OWNER | One who owns a title insurance policy. |
| POWER OF ATTORNEY | A written document authorizing another to act on his behalf as an Attorney in Fact. One does not need to be a licensed attorney to act as an attorney in fact but, power of attorney forms are legal documents and should only be prepared by a licensed attorney. |
| POWER OF SALE | A clause inserted in a will, mortgage, deed or trust or trust agreement authorizing the sale or transfer of land iaccordance with the terms of the clause. |
| PREPAYMENT PENALTY | A fee charged to a borrower who pays off a loan before it is due. Some loan programs contain a prepayment penalty, others do not, check with your loan officer for further details. |
| PREQUALIFICATION | The process of establishing a borrower's qualification for a loan of a particular amount based on income and expenses. Prequalification does not guarantee that the loan amount will be a approved, but can be used to demonstrate financial capability to an a |
| PRIMARY LENDER | A financial institution which actually makes mortgage loans from its funds. For Example, if you obtain a mortgage from a bank and the bank then sells the mortgage to the secondary market, the bank is the original, or primary lender. Examples of primary le |
| PRIME RATE | The rate of interest charged by a lender to its best customers. |
| PRINCIPAL | The original balance of money loaned, excluding interest. Also, the remaining balance of a loan, excluding interest. |
| PRIVATE MORTGAGE INSURANCE (PMI) | Insurance provided by a nongovernmental insurer that protects lenders against a loss if a borrower defaults. Usually required on all loans with a LTV equal or greater than 80%. |
| PROPERTY TAX | Tax assessed against a property by local governments. One of the four basic monthly housing costs (PITI). |
| PRORATE | To divide proportionately, so as to determine actual amounts owed by the buyer and seller at closing. For example, if property taxes for a month are $300 and the seller owned the property for the first 10 days while the borrower owned the property for the othre 20 days. |
| PURCHASE AND SALES AGREEMENT | A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold. |
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