Prepayment Penalty

This is a fee charged to a borrower who fully pays off a mortgage loan before it is due.

Pre-Qualification

This is a loan officer's opinion, in writing, of the borrower's ability to qualify for a mortgage, following the loan officer's review of the borrower's income, debt, and savings. This information may be written or verbal, and may or may not include the borrower's credit report.

Prime Rate

This is the interest rate charge by lending institutions to highly qualify, preferred customers. Changes The prime rate is important as an index for some adjustable rate mortgages, and for lines of credit against equity. The prime rate does not effect other loan types, however, economic factors affecting the prime rate will have similar affect on a mortgage loan interest rate.

Principal

The amount of a loan or the amount that has not yet been paid. This is also the portion of a monthly loan payment used to reduce any remaining balance for the loan or mortgage.

Principal Balance

This is the outstanding dollar balance for principal amount for a mortgage. The principal balance does\ This does not include outstanding interest or any other outstanding charges.

Private Mortgage Insurance ( MI

Private mortgage insurance company provides an insurance policy to lending institutions from loss if a borrower does not repay a loan. Lender usually require this insurance for any loan with a loan to value ratio of 80% or more.

Promissory Note

This is a promise, in writing, to repay a specific dollar amount over a specified time period.

Public Auction

A meeting that is noted by public advertisement at specific location for the purpose of selling property in order to repay a defaulted mortgage.

Planned Unit Development (PUD)

This is a real estate project that has common property, owned and maintained using a homeowners' association or other organization, that can used by the individual owners.

Purchase Agreement

This is written contract agreement signed by the both buyer and seller that states terms and conditions for the sale of property.

Purchase Money Transaction

Using money or an equivalent monetary source to pay for a property.