Glossary of Real Estate Terms

There are 125 entries in this glossary.
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P

Term Definition
Partial Payment

This is a payment which is not sufficient to cover the scheduled monthly payment on a mortgage loan. Generally, a lender will not accept a partial payment, but when hardship comes one can make this request of the loan servicing collection department.

Payment Change Date

The date on which a new monthly payment amount takes effect on an adjustable-rate mortgage or a graduated-payment mortgage is called the Payment Change Date. Normally, the payment change date occurs in the month straight away after the interest rate adjustment date.

PITI

PITI stands for principal, interest, taxes, and insurance. An "impounded" loan means that the monthly payment covers all of these, and perhaps mortgage insurance, if your loan so calls for it. If you do not have an impounded account, then the lender still calculates this amount and uses it as part of determining your debt-to-income ratio.

PITI Reserves

PITI reserves is a cash amount which 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 reserves must equal the amount which the borrower would have to pay for PITI for a pre-defined number of months.

Power of Attorney

This is a legal document which authorizes another person to act on one's behalf. A power of attorney can grant absolute authority or can be limited to certain acts or certain periods of time.

Prepayment

Any amount that is paid to reduce the principal balance of a loan before the due date is called prepayment. Full payment on a mortgage which 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 which occurs before the loan has been fully amortized.

Principal

The amount which is borrowed or remains unpaid is called Principal. The part of the monthly payment that reduces the remaining balance of a mortgage is also refers to the Principal.

Principal balance

Principal balance is the outstanding balance of principal on a mortgage. This does not include interest or any other charges.

Private Mortgage Insurance

This is a kind of mortgage insurance which is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Most lenders normally require Mortgage Insurance for a loan with a loan-to-value percentage in excess of 80 percent.

Public Auction

Public auction is a kind of a meeting in an announced public place where people gather to sell property to repay a mortgage that is in default.

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