-P- Mortgage Terms Glossary

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Mortgage Terms Glossary

-P-

PITI: Principal, Interest, Taxes, and Insurance. These are the four components that typically make up a homeowner's mortgage payment.
Planned Unit Development (PUD): a type of real estate development that includes common areas and rules governed by an owners' association.
Points: prepaid interest equal to one percent of a mortgage loan. Lenders generally offer loans with several combinations of interest rates and points. Generally, the more points paid, the lower the interest rate. The best choice of interest rate/points may depend on how often you refinance.
Principal: the amount of debt, not including interest, on a loan.
Pre-Qualification: an initial evaluation by a lender of a borrower's credit and financial situation to determine eligibility for a loan.
Private Mortgage Insurance (PMI): usually required by a lender if the down payment is less than 20% of the sale price. PMI protects the lender in the event of a default, and is usually terminated when the homeowner has built up 20% equity.