REAL ESTATE 101
Real Estate Glossary - P
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Parcel
An officially described piece of land
Penalty
A sum of money paid to a lender for the privilege of prepaying a mortgage in part or in full.
P.I. (Principal & Interest)
Principal and interest due on a mortgage.
P.I.T. (Principal, Interest, & Taxes)
Principal, interest and taxes due on a mortgage.
P.I.T.I.
The owner's typical monthly payment, which includes principal, interest, (property) taxes and (mortgage) insurance. Most lenders collect a portion of annual tax and insurance bills each month, then pay them when they're due.
Point
A point is 1 percent of the loan amount. For example, two points on a $100,000 loan would be $2,000. You can pay points to get your lender to give you a lower interest rate. Or, you can refuse to pay points and keep the interest rate offered. Often the increase in payment is quite small, so weigh the pluses and minuses carefully before you decide. Points are also called loan discount fees.
Prepayment Option
The right to prepay specified amounts of the principal balance. Penalty interest may be incurred on prepayment options.
Principal
The amount you still owe the lender at any time, not including interest. The amount of money actually borrowed.
Private mortgage insurance (PMI)
If your down payment is less than 20 percent of the property's cost, most lenders will require you to obtain private mortgage insurance, which protects your lender if you default on the loan. Cost: $45 to $75 a month. Be sure you can cancel the private mortgage insurance policy when you've paid your loan to less than 80 percent of your home's value.
Probate sale
A real estate sale triggered by the death of the owner, with proceeds to be divided among heirs or creditors
Property
Property is commonly thought of as a thing which belongs to someone and over which a person has total control. But, legally, it is more properly defined as a collection of legal rights over a thing.
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