P&I
The monthly principal and interest payment required when repaying a mortgage in accordance with its terms.
Back to top

Package Mortgage
A mortgage agreement in which the principal amount loaned is increased because personal property as well as real property serve as security.
Back to top

Pad Site
Some home equity loans may have a balance due at the end of the loan term. This means that if you make the minimum monthly payment during the life of the loan the entire balance will not be paid in full. A "balloon" payment will be due at that time.
Back to top

Paper
Credit given, evidenced by a written obligation with property as collateral.
Back to top

Partial Payment
A loan payment that is not great enough to cover the scheduled monthly payment on a mortgage.
Back to top

Passive Income
Passive Income refers to the income derived from passive or limited partnership real estate business investments, wherein an individual is not actively involved in the activity.
Back to top

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.
Back to top

Perfect Title
Perfect Title refers to a title that is completely devoid of liens and legal questions as to the ownership of the property, especially real estate.
Back to top

Periodic Payment Cap
On an adjustable-rate mortgage (ARM), a limit on the amount that payments can increase during a single adjustment period.
Back to top

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.
Back to top

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.
Back to top

Personal Property
Any and all property that is not real property.
Back to top

PITI
(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.
Back to top

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.
Back to top

Plant
Plant is otherwise referred to as a fixed property, which is a long term asset that is tangible and held for business use and that is not converted to cash in the following fiscal.
Back to top

Plat Drawing & Conservation Fee
A fee charged by title companies in some states for obtaining a map or chart of a lot, subdivision or community drawn by a surveyor showing boundary lines, buildings, improvements on the land, and easements. This drawing is required to obtain title insurance. For our comparison purposes, the plat drawing and conservation fee is considered to be a third party fee. Some lenders may include this fee in the cost of the title insurance.
Back to top

Plat Registration
A fee charged by title companies in some states to review the registration of a public record containing maps of land, showing the division of the land into streets, blocks, and lots and indicating the measurements of the individual parcels. For our comparison purposes, the plat registration fee is considered to be a third party fee. Some lenders may include this fee in the cost of the title insurance.
Back to top

Points
Fees that are collected by the lender in exchange for a lower interest rate. Commonly called discount points, each point is equal to 1% of the loan amount. For our comparison purposes, a discount point is considered to be a lender fee. To determine if it is wise to pay discount points to obtain a lower rate, you must compare the up front cost of the points to the monthly savings that result from obtaining the lower rate.
Back to top

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
Back to top

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.
Back to top

Pre-qualification
Procedure to determine how much money a potential homebuyer will be eligible to borrow prior to actually applying for a loan.
Back to top

Prepaids
Expenses of property ownership or expenses incurred while obtaining a mortgage that must be paid in advance. Prepaids typically include real estate taxes and hazard insurance.
Back to top

Prepayment
Any amount that is paid to reduce the principal balance, not interest, of a loan before the due date.
Back to top

Prepayment Penalty
A monetary penalty charged by a lender if all or part of a loan is paid off before it is due.
Back to top

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.
Back to top

Principal
The actual balance, excluding interest, of a mortgage loan. Also refers to the amount of the monthly mortgage payment that will be applied to the actual balance.
Back to top

Principal & Interest
The monthly payment required to repay a mortgage in accordance with its terms. Sometimes referred to as "P&I".
Back to top

Principal Balance
The outstanding balance of principal on a loan. Principal does not include interest or fees.
Back to top

Private Mortgage Insurance
Insurance provided by a private company to protect the mortgage lender against losses that might be incurred if a loan defaults. The cost of the insurance is usually paid by the borrower and is most often required if the loan amount is more than 80% of the home's value. Sometimes referred to as mortgage insurance.
Back to top

Processing/Administration Fee
A fee charged by a lender to cover the administrative costs of processing a loan request. For our comparison purposes, a processing or administration fee is considered to be a lender fee.
Back to top

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.
Back to top

Productivity
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.
Back to top

Promissory Note
A written promise to pay a specified sum to specified person over a specified period of time.
Back to top

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.
Back to top

Proprietor
Proprietor is a self employed individual who is the owner of an unincorporated business. In the case of a proprietorship, the owner doesn't enjoy limited liability. All the assets and liabilities of the firm accrue to the proprietor.
Back to top

Public Auction
A gathering at a pre-announced public location to sell property to satisfy a mortgage that is in default.
Back to top

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.
Back to top

Purchase Agreement
Insurance provided by a private company to protect the mortgage lender against losses that might be incurred if a loan defaults. The cost of the insurance is usually paid by the borrower and is most often required if the loan amount is more than 80% of the home's value. Sometimes referred to as mortgage insurance.
Back to top

Purchasing Managers Association of Chicago (PMAC) Survey
The PMAC Survey is a composite diffusion index of manufacturing conditions in the Chicago area. Readings above 50% indicate an expanding factory sector.
Back to top