Mortgage Glossary

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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.
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.
(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
Plat Registration
Power of Attorney
A written legal instrument that authorizes another person to act on one's behalf. A power of attorney can grant either complete or limited authority.
Pre-foreclosure Sale
A process in which the lender allows a borrower to avoid foreclosure by selling the property for less than the amount that may be owed to the lender.
Any amount that is paid to reduce the principal balance, not interest, of a loan before the due date.
Prepayment Penalty
A monetary penalty charged by a lender if all or part of a loan is paid off before it is due.
Procedure to determine how much money a potential homebuyer will be eligible to borrow prior to actually applying for a loan.
Prime Rate
The interest rate that banks charge to their best customers for short-term loans. Changes in the prime rate can influence changes in other interest rates.
Principal & Interest
Principal Balance
The outstanding balance of principal on a loan. Principal does not include interest or fees.
Private Mortgage Insurance
Processing/Administration Fee
Producer Price Index  (PPI)
Measures the average level of prices of a fixed basket of goods received in primary markets by producers. Monthly percent changes reflect the rate of change in such prices. Changes in the PPI are widely followed as an indicator of commodity inflation. Frequency: monthly. Source: Labor Department.
An economic indicator that measures the output per hour of work for non-farm business production. Can be used in conjunction with the rate of change in GAP to determine whether economic growth is likely to be inflationary. A separate component measures unit labor costs, an important indicator of future inflation. Frequency: quarterly. Source: Labor Department.
Promissory Note
A written promise to pay a specified sum to specified person over a specified period of time.
Property Taxes
Taxes based on the assessed value of the home, paid by the homeowner for community services such as schools, public works, and other costs of local government. Sometimes paid as a part of the monthly mortgage payment.
Public Auction
A gathering at a pre-announced public location to sell property to satisfy a mortgage that is in default.
Public Record
A collection of legal documents that are filed with the local government registry so that the public will know what liens, encumbrances or judgements may affect any piece of real estate.
Purchase Agreement
A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.
Purchasing Managers Association of Chicago Survey  (PMAC)
The PMAC Survey is a composite diffusion index of manufacturing conditions in the Chicago area. Readings above 50% indicate an expanding factory sector.