Parcel
A defined piece of real estate, usually resulting from the division of a large area of land. |
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Pay Out
To pay the lender the full amount owed on a loan. |
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Percolation Test
A geological test which determines the rate at which a given soil, in a given place, absorbs water. |
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Perpetuity
Endless, forever. |
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Person
One (as a human being, a partnership, or a corporation) that is recognized by law as the subject of rights and duties. |
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Personal Property
Property, which is not real property, primarily consisting of items that are movable. |
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Planned Unit Development (PUD)
A development in which the lots and homes are individually owned, and the aggregate owners also own common areas. |
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Plat
A map showing planned or actual features of an area (streets and building lots etc.). |
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Point
A fee charged for making a loan, each point amounting to one percent of the loan amount. |
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Power of Attorney
A legal instrument authorizing someone to act as the grantor's agent. |
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Pre-Approved Mortgage
A term used to mean that a borrower has completed a loan application and provided debt, income, and savings information that has been reviewed and pre-approved by an underwriter. |
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Preliminary Title Report
A document issued by a Title company, which outlines the possible issues surrounding a property, which might affect the transfer. |
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Prepaid Interest
Interest paid before it is earned |
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Prepayment Clause
Clause in a contract giving the borrower the right to pay a loan off prior to its due date. |
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Prepayment Penalty
A penalty incurred, as outlined in the lending documents, when a loan is paid in full before it is due. |
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Pre-Qualification
After a loan officer has made inquiries about a borrower's debt, income, and savings, he or she can write a written statement (pre-qualification) about the borrower's chances for qualifying for a home loan. |
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Prime Rate
Interest charged by financial institutions to top-rate borrowers. |
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Principal
The amount of debt, not counting interest, left on a loan. |
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Principal and Interest (P&I)
The amount of the borrower’s payment, which is applied to paying off the loan. This is used to differentiate those amounts, which might be used to pay taxes and/or insurance. If these are included in the amount it is referred to as PITI. (see impound account). |
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Private Mortgage Insurance (PMI)
Paid by a borrower to protect the lender in case of default. PMI is typically charged to the borrower when the Loan-to-Value Ratio is greater than 80%. |
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Probate
The act of proving that an instrument purporting to be a will was signed and executed in accord with legal requirements. |
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Promissory Note
A written promise to repay a specified amount over a specified period of time. |
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Property Tax
A capital tax on property imposed by municipalities; based on the estimated value of the property. |
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Property Tax
A tax, which is levied on property based on its assessed value. |
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Prorate
To proportionately allocate the share of expenses, or obligations. |
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Purchase Agreement
A contract between a buyer and a seller, which outlines the conditions of the sale (price and terms). |
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