Partial Payment - A payment that is not sufficient to cover the scheduled monthly principal and interest payment on a mortgage loan.

Payment (P&I) - Your monthly mortgage payment, including principal and interest, but excluding Tax and insurance payments.

Payment Change Date - The date when a new monthly payment amount takes effect on an adjustable rate mortgage (ARM). Generally, the payment change date occurs in the month immediately after the adjustment date and the borrower is notified 30 days prior as to the new rate.

Payoff - To pay the outstanding balance of a loan in full.

Periodic Payment Cap - A provision of an adjustable-rate mortgage (ARM) that limits how much the interest rate or loan payments may increase or decrease. In upward rate markets, it protects the borrower from large increases in the interest rate or monthly payment at each adjustment period. See cap.

Periodic Rate Cap - A provision of an adjustable-rate mortgage (ARM) that limits how much the interest rate or loan payments may increase or decrease. In upward rate markets, it protects the borrower from large increases in the interest rate or monthly payment at each adjustment period. See cap.

Personal Property - Any property that is not real property or is not permanently fixed to land. Cash, furniture, and cars are all examples of personal property.

Piggyback - A combination of two loans. Example: A loan is made for 90% of the home price. 80% of the purchase price is supplied by a 1st mortgage and 10% by a 2nd mortgage. The 2nd mortgage is piggybacked on the 1st.

PITI - An abbreviation for the parts of a typical monthly mortgage payment. PITI stands for principal-Interest-Taxes-Insurance. See principal, interest, taxes, and insurance.

PITI Reserves - A cash amount that 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 (PITI) reserves must equal the amount that the borrower would have to pay for PITI for a predefined number of months.

Planned Unit Development - See PUD.

PMI - Stands for Private Mortgage Insurance. PMI is an insurance policy the borrower buys to protect the lender from non-payment of the loan. PMI policies are usually required if you make a down payment that is below 20% of the sales price of the home.

Points (Loan Discount Points) - Points are prepaid interest on your mortgage. A one-time fee charged by the lender at the time of closing for originating a loan. Each point is 1% of the loan amount - that is, 2 points on a $100,000 mortgage would be $2,000.

Power Of Attorney - A legal document authorizing one person to act on another's behalf. A power of attorney can grant complete authority or can be limited to certain acts and/or certain periods of time.

Pre-Approval - A lender's conditional agreement to lend a specific amount on specific terms to a homebuyer. (subject to satisfactory appraisal and no change in financial condition). You can shop with assurance, because you'll know up-front how large a loan you could qualify for.

Preforeclosure Sale -A procedure in which the investor allows a mortgagor to avoid foreclosure by selling the property, typically for less than the amount that is owed to the lender.

Pre-Paid Items (Prepaids) - Items required by lender to be paid at closing prior to the period they cover such as prorated property taxes, homeowners insurance and pre-paid interest.

Pre-Paid Interest - Mortgage interest that is paid in advance of when it is due.

Prepayment - Any amount paid to reduce the principal balance of a loan before the due date. Payment in full on a mortgage that 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 occurs before the loan has been fully amortized.

Prepayment Penalty - A fee that may be charged to a borrower who pays off a loan before it is due. Generally, a prepayment penalty is added to a loan in exchange for a discounted rate.

Pre-Qualification - A preliminary analysis of a borrower's ability to afford the purchase of a home. An affordability analysis takes into consideration factors such as income, liabilities, and available funds, along with the type of home loan, the likely taxes and insurance for the home, and the estimated closing costs.

Primary Residence - The place someone lives most of the time.

Prime Rate - The interest rate that banks charge on short-term loans to its most creditworthy customers. Changes in the prime rate influence changes in other rates, including mortgage interest rates.

Principal - The amount borrowed or remaining unpaid. The part of the monthly payment that reduces the remaining balance of a mortgage.

Principal Balance - The outstanding balance on a mortgage. The principal balance does not include interest or any other charges. See remaining balance.

Principal, Interest, Taxes, and Insurance (PITI) - Four potential components of a monthly mortgage payment. Principal refers to the part of the monthly payment that reduces the remaining balance of the mortgage. Interest is the fee charged for borrowing money. Taxes and insurance refer to the amounts that may be paid into an escrow account each month for property taxes and mortgage and hazard insurance.

Principal Payment - Portion of your monthly payment that reduces the remaining balance of a home loan.

Private Mortgage Insurance (PMI) - Mortgage insurance that is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Most lenders generally require PMI for a loan with a loan-to-value (LTV) percentage in excess of 80 %.

Processing - The preparation and documentation of a mortgage loan application for underwriting.

Promissory Note - A written promise to repay a specified amount over a specified period of time.

Property Value - LTV or Loan to Value Ratio refers to the relationship between the unpaid principal balance of the mortgage and the property's appraised value (or sales price if it is lower).

Public Auction - A meeting in an announced public location to sell property to repay a mortgage that is in default.

PUD (Planned Unit Development) - A project or subdivision that includes common property that is owned and maintained by a homeowners' association for the benefit and use of the individual PUD unit owners.

Purchase Agreement - A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.

Purchase Money Transaction - A loan used in part as payment for a purchase. A loan that is used to buy a home is called a purchase money mortgage.

Purchase Price - The total amount paid for a home.