Mortgage Glossary -P
A contractual limit on the size of the monthly payment of an adjustable-rate mortgage or other variable rate loan.
Per Diem Interest
Interest calculated per day
Consumer safeguard, which limits the amount the interest rate on an adjustable rate mortgage (ARM), can change in an adjustment interval.
Abbreviation for Principal, Interest, Taxes and Insurance — the components of a monthly mortgage payment.
A point equals 1 percent of a mortgage loan. Some lenders charge “origination points” to cover expenses of making a loan. Some borrowers pay “discount points” to reduce the loan’s interest rate.
Power of attorney
A document in which the signer authorizes someone to conduct business in his or her name — signing title documents and checks, for example.
The process of determining how much money a potential homebuyer could borrow.
These expenses are included at closing. Taxes, insurance and assessments paid in advance of their due dates.
Interest that is paid in advance of when it is due. Typically charged to a borrower at closing to cover interest on the loan between the closing date and the first payment date.
Full or partial repayment of the principal before the contractual due date.
A lender’s charge to the borrower for paying off the loan before the end of the term.
A non-binding process of determining how much money a prospective homebuyer will be eligible to borrow prior to application for a loan. Information submitted during pre-qualification is subject to verification at application.
1. The amount of money borrowed;
2. The amount of money owed, excluding interest.
Private Mortgage Insurance (PMI)
Insurance to protect the lender in case you, as the borrower, default on your loan. With conventional loans, mortgage insurance is generally not required if you make a down payment of at least 20% of the home’s purchase price. Although PMI protects the lender, it is paid monthly by the borrower.
Taxes figured on the value of property you own, including real estate, boats, cars, recreational vehicles and business inventories.
A document in which a property’s buyer and seller approve the price and other terms of the transfer of the title. Also known as an agreement of sale, a purchase contract or a sale contract.