Glossary Definitions for P - Q
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With a partially amortizing loan, the periodic payments cover all of the interest charges but only part of the principal, therefore leaving an unpaid principal balance when the loan matures.
The status of scheduled loan payments that have not been paid on time.
The person or organization to whom a check, draft or note is payable – the payee’s name follows the words: “Pay to the order of.”
Limit on the amount by which a borrower’s ARM payments may increase, regardless of rise in interest rates; may result in negative amortization.
The complete repayment of loan principal, interest and any other sums due; payoff occurs either over the scheduled full term of the loan, or through one or more prepayments.
A charge imposed for a total or partial withdrawal from a certificate of deposit (CD) prior to the maturity.
Interest calculated per day – depending on the day of the month on which closing takes place, you will have to pay interest from the date of closing to the end of the month. Your first mortgage payment will probably be due the first of the following month.
This is a limit on the amount that interest rates can change at each adjustment period.
A permanent loan is a long-term mortgage of 10 years or more.
A personal check is drawn on a depositor institution by an individual against the individual’s own funds.
A number or code used by an account holder in conjunction with an ATM card to verify the user’s identity to an automated teller machine.
An unsecured loan usually made for the purpose of debt consolidation, vacation or the purchase of durable goods – also called a signature loan.
This is any property that is not real property.
Abbreviation for Principal, Interest, Taxes and Insurance, the components of a monthly mortgage payment; also called monthly housing expenses.
Money is placed in a pledged savings account, and this fund plus earned interest is gradually used to reduce mortgage payments.
Interest prepaid to the lender at closing; each point is equal to 1% of the loan amount. Paying more points at closing generally reduces the interest rate (and therefore monthly payments) on a loan.
This is a legal document authorizing one person to act on behalf of another.
Taxes, insurance and assessments paid in advance of their due dates, including at closing.
Prepaid interest is charged to a borrower at closing to cover interest on the loan between closing and the first payment.
A payment made before its scheduled due date.
Fee charged by a lender for early payment of debt.
The process of determining how much money a prospective homebuyer will be eligible to borrow prior to application for a loan.
This market includes banks, savings and loans, credit unions and mortgage bankers who make mortgage loans directly to borrowers. These lenders sometimes sell their mortgages to lenders like FNMA in the secondary mortgage market.
Lowest commercial interest rate charged by a bank on short-term loans to its most creditworthy customers.
1. The capital sum of a loan. The amount of borrowed funds to be repaid.
2. An individual or firm buying or selling for his/her/its own account.
The portion of a loan not yet repaid, exclusive of interest or other charges.
Also known as PMI or MI (for mortgage insurance), it insures against a loss by a lender in the event of default by a borrower (mortgagor). The premium is paid by the borrower and is included in the mortgage payment.
Financial statement showing sales, expenses and profits over a period of time.
This is a government tax based on the market value of a property.
A project or subdivision that includes common property that is owned and maintained by a homeowners’ association for the benefit and use of the individual PUD unit owner.
This is a signed document stating the purchaser’s agreement to buy and the seller’s agreement to sell a specified property under stated terms and conditions.
Qualifying ratio is a comparison of a borrower’s expenses (housing or total debt) to his income.