Glossary


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Term	Definition
P&I	Abbreviation for principal and interest.
Payment Cap	See also: Cap
PITI	Abbreviation for principal, interest, taxes and insurance.
PITIO	Abbreviation for principal, interest, taxes, insurance and other monthly non-housing costs.
Points	Charges levied by the lender based on the loan amount. Each point equals one percent of the loan amount; for example, two points on a $100,000 mortgage equals $2,000. Discount points are used to buy down the interest rate. Points can also include a loan origination fee, which is usually one point.
Pre-qualification	Tentative establishment of a borrower's qualification for a mortgage loan amount of a specific range, based on the borrower's assets, debts, income, employment status and credit history.
Prime Rate	The interest rate commercial banks charge their most creditworthy customers.
Principal	The amount of the entire mortgage loan, not counting interest. Also, as a part of PITI, the amount of the monthly mortgage payment which does not include the interest, insurance, and taxes.
Private Mortgage Insurance (PMI)	See also: Mortgage Insurance
Property Appraisal	See also: Appraisal
Property Tax	The amount which the state and/or locality assesses as a tax on a piece of property.
Prorate	To proportionally divide amounts owed by the buyer and the seller at closing.

Last Modified: 9/28/2024 12:09 PM

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