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PITI
Principal, interest, taxes and insurance. Included in
lender impound. Also used by lender to determine borrowers
debt-to-income ratio.
Point
A point is 1 percent of the amount of the mortgage.
Predatory
Lending
Fraudulent, deceptive and discriminatory lending practices. Many of
these practices proven illegal, while others are legal but not in the
best interest of the borrowers or unethical. Such as excess rates, fees
and penalties in fine print and excessive legal terms.
Predatory
Lender
A lender or mortgage broker that practices mortgage fraud against
borrowers. Charges higher interest rates, excessive fees and charges
exorbitant penalties.
Predatory
Loan
A loan with excessive loan terms, fees and penalties.
Prepayment
Penalty
A fee that may be charged to a borrower who pays off a loan before it
is due.
Prime
Rate
Interest rates banks charge to their preferred customers. Prime rate
can indirectly affect other rates as well.
Principal
The amount borrowed or unpaid balance due. The part of the
monthly payment that reduces the remaining balance of a mortgage.
Principal
Balance
The outstanding balance of principal on a mortgage. The principal
balance does not include interest or any other charges. Also known as
remaining balance.
Private
Mortgage Insurance (MI)
Mortgage insurance protects lenders against loss if a borrower
defaults. Most lenders generally require MI for a loan with a
loan-to-value (LTV) percentage in excess of 80 percent.
Promissory
Note
A written promise by a borrower to repay a specified amount over a
specified period of time.
Purchase
Agreement
A written contract signed by the buyer and seller stating the terms and
conditions under which a property will be sold.
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