| Term |
Definition |
| Personal Loan |
An unsecured loan, which
means a borrower does not put up any collateral or security to
guarantee the repayment of the loan. For this reason, personal loans
carry high interest rates. If a borrower owns a home, a
lower-interest-rate alternative is a home-equity loan. But this
option requires that the borrower put up his or her home or other
real estate property as collateral. Your best loan option is the
loan that best meets your needs. |
| Piggyback Loan |
An alternative to private
mortgage insurance, also known as a second trust loan. The most
common type is an 80/10/10 where a first mortgage is taken out for
80% of the home’s value, a down payment of 10% is made and another
10% is financed in a second trust at a higher interest rate. In some
cases, you may even qualify for a piggyback loan with as little as a
5% down payment |
| PITI |
Principal, interest, taxes,
and insurance. Also called monthly housing expense. |
| Plat |
A map or chart of a lot,
subdivision or community drawn by a surveyor showing boundary lines,
buildings, improvements on the land, and easements. |
| Point-of-Sale (POS) |
A method by which consumers
can pay for purchases by having their deposit accounts debited
electronically without the use of checks. |
| Points |
Additional points you can
pay a lender to lower the interest rate on your loan at closing.
Each point is equal to 1 percent of the loan amount (e.g. two points
on a $100,000 mortgage would cost $2,000). Also referred to as
Discount Points. Points may include discount points and/or
origination fee. |
| Power of Attorney |
A legal document
authorizing one person to act on behalf of another. |
| Pre-paid Items |
Pre-paid items are amounts
that are required by the Lender to be paid in advance of their due
date at settlement. You may be required to prepay certain items at
the time of settlement, such as accrued interest, mortgage insurance
premiums and hazard insurance premiums. Pre-paid items contribute to
the total amount of the loan's closing costs. See Closing Costs for
more information. Note: You will only see per-diem interest under
this category on our site. For some lenders you will see insurance
premiums under this category also; we have categorized our insurance
premiums under the Escrow Deposits. |
| Prepaids |
Expenses necessary to
create an escrow account or to adjust the seller's existing escrow
account. Can include taxes, hazard insurance, private mortgage
insurance and special assessments. |
| Prepayment |
A privilege in a mortgage
permitting the borrower to make payments in advance of their due
date. |
| Prepayment Premium |
Money charged for an early
repayment of debt. Prepayment premiums are allowed in some form (but
not necessarily imposed) in 36 states and the District of Columbia.
|
| Prime Rate |
The interest rate charged
by lenders to their best, most creditworthy customers. A less credit
worthy customer may be offered a loan at the prime rate plus
anywhere from 2 to 10 percent. Borrowing at below-prime also occurs,
but is less common and usually applies to businesses, not individual
consumers. The Federal Reserve determines whether to lower or raise
the prime rate based on a variety of economic factors. Many consumer
loans, such as auto, home equity, mortgage and credit card loans are
based upon the prime rate. Building and maintaining a good credit
history are two of the most important qualifications for prime-rate
borrowing. |
| Principal |
The amount of debt, not
counting interest, left on a loan. |
| Private Mortgage
Insurance (PMI) |
In the event that you do
not have a 20 percent down payments, lenders will allow a smaller
down payment-as low as 5 percent in some cases. With the smaller
down payments loans, however, borrowers are usually required to
carry private mortgage insurance. Private mortgage insurance will
require an initial premium payment of 1.0 percent to 5.0 percent of
your mortgage amount and may require an additional monthly fee
depending on your loan's structure. On a $75,000 house with a 10
percent down payments, this would mean either an initial premium
payment of $2,025 to $3,375, or an initial premium of $675 to $1,130
combined with a monthly payment of $25 to $30. |
| Processing |
Processing are the steps a
lender takes with your loan application to gather your information
for underwriting. Processing involves building your file of
information for your loan. Processing includes getting the credit
report, appraisal, verification of employment, assets, etc. |
| Purchase option |
Typically, the option to
buy a leased auto usually during the life of a lease (lease buy out)
or when the lease ends.
|
