Mortgage Glossary
There are a lot of unfamiliar terms that get tossed around during the mortgage process. But don't worry, we've put together this glossary to help you get a better grasp of any terms that may be less than clear.
P
P&I
The monthly principal and interest payment required when repaying a mortgage in accordance with its terms.
Package Mortgage
A mortgage agreement in which the principal amount loaned is increased because personal property as well as real property serve as security.
Pad Site
A single freestanding retail site, often adjacent to a mall or larger shopping center.
Paper
Credit given, evidenced by a written obligation with property as collateral.
Partial Payment
A loan payment that is not great enough to cover the scheduled monthly payment on a mortgage.
Payment Change Date
The date when a new monthly payment amount takes effect on an adjustable-rate mortgage (ARM). The payment change date usually occurs in the month immediately after the adjustment date.
Periodic Payment Cap
On an adjustable-rate mortgage (ARM), a limit on the amount that payments can increase during a single adjustment period.
Periodic Rate Cap
On an adjustable-rate mortgage (ARM), a limit on the amount that the interest rate can increase during a single adjustment period.
Personal Income
Economic indicator that measures the total income of all Americans from all sources, and is reported both before and after taxes. Also reports personal spending and personal savings. The level of spending can be used as an indicator of consumer optimism. Frequency: monthly. Source: Commerce Department.
Personal Property
Any and all property that is not real property.
PITI
(P)rincipal, (I)nterest, (T)axes, and (I)nsurance is a reference to the total monthly payment required to repay a mortgage in accordance with its term as well as monthly escrow payments for taxes and insurance.
Planned Unit Development (PUD)
A housing project that includes common property that is owned and maintained by a homeowners' association for the benefit and use of the individual unit owners.
Plat Drawing & Conservation Fee
A fee charged by title companies in some states for obtaining a map or chart of a lot, subdivision or community drawn by a surveyor showing boundary lines, buildings, improvements on the land, and easements. This drawing is required to obtain title insurance. For our comparison purposes, the plat drawing and conservation fee is considered to be a third party fee. Some lenders may include this fee in the cost of the title insurance.
Plat Registration
A fee charged by title companies in some states to review the registration of a public record containing maps of land, showing the division of the land into streets, blocks, and lots and indicating the measurements of the individual parcels. For our comparison purposes, the plat registration fee is considered to be a third party fee. Some lenders may include this fee in the cost of the title insurance.
Points
Fees that are collected by the lender in exchange for a lower interest rate. Commonly called discount points, each point is equal to 1% of the loan amount. For our comparison purposes, a discount point is considered to be a lender fee. To determine if it is wise to pay discount points to obtain a lower rate, you must compare the up front cost of the points to the monthly savings that result from obtaining the lower rate.