Real Estate Definitions

Glossary of Mortgage Terms P-Z

Percentage Point: One percent of the loan or a measure of the interest rate.
PITI (Principal, Interest, Taxes, and Insurance): The most common components of a monthly mortgage payment.
Preliminary Title Report: The results of a title search by a title company prior to issuing a title binder or commitment to insure clear title.
Primary Residence: A residence which the borrower intends to occupy as the principal residence.
Principal Balance: The remaining balance due on a debt, exclusive of accrued interest.
Private Mortgage Insurance: Insurance written by a private company protecting the mortgage lender against loss resulting from a mortgage default.
Processing: The preparation of a mortgage loan application and supporting documentation for consideration by a lender or insurer.
PUD (Planned Unit Development): A planned combination of diverse land uses, such as housing, recreation, and shopping in one contained development or subdivision. A major feature of a PUD includes areas of common land for use by the housing unit owners; the association of unit owners generally owns, pays fees, and maintains the common areas. Also see DiMinimus PUD.
Purchase Contract (Agreement/Offer): An agreement between a buyer and seller of real property, setting forth the price & terms of the sale. Also known as a sales contract.
Rate Lock Option: An agreement guaranteeing an individual a specified interest rate on a loan provided the loan is closed within a set period of time.
Real Assets: Real estate or real property owned by an individual of business.
Real Estate Settlement Procedures Act (RESPA): A federal law requiring lenders to provide home mortgage borrowers with information on known or estimated settlement costs. It also establishes guidelines for escrow account balances.
Real Property: Land and that which is affixed to it.
Refinancing: The repayment of a debt from the proceeds of a new loan using the same property as security.
Satisfaction of Mortgage: The recordable instrument issued by the lender verifing full payment of a mortgage debt.
Second Home (Vacation Home, Weekend Home): A residence other than the borrower's primary residence which the borrower intends to occupy for a portion of each year. Must be suitable for year-round occupancy.
Secondary Mortgage Market: A market where existing mortgages are bought and sold. It contrasts with the primary mortgage market where mortgages are originated.
Security: In lending, the collateral given, deposited, or pledged to secure the payment of a debt.
Settlement Services: Services provided by the lender at the closing of a loan.
Survey: The measurement and description of land by a registered surveyor.
Term: The time limit within which a loan must be repaid.
Title: The legal evidence of ownership rights to real property.
Title Insurance Policy: A contract in which an insurer, usually a title insurance company, agrees to pay the insured party a specific amount for any loss caused by defects of title on real estate in which the insured has an interest as purchaser, mortgagee, or otherwise.
Title Search: An examination of public records to disclose the past and current facts regarding the ownership of a given piece of real estate.
Truth-in-Lending Act: A Federal law requiring full disclosure of credit terms using a standard format. This is intended to facilitate comparisons between the lending terms and financial institutions.
Underwriting: Analysis of risk and setting of an appropriate rate and terms for a mortgage on a given property for given borrowers.
Zero Point Option: An option which allows the borrower to opt to pay a slightly higher loan interest rate in lieu of paying the loan origination points generally charged for the particular loan product.