Mortgage Terms

A, B, C, D-E, F-G, H-K, L-M, N-Q, R-S, T-Z

 

Negative Amortization
a gradual increase in a mortgage debt that occurs when the monthly payment does not cover the entire principal and interest due. Can create a condition known as being "upside down" in a mortgage.

Note
the document outlining the amount of the debt, the terms and payments, the interest rate, margins and caps (if applicable), the name of the lender and the borrower, and any other material item required by the lender.

Origination Fee
a fee paid to a lender for processing a loan application.

Owner Financing
a note carried all or in part by an owner selling a property.

Owner's Interest
see Equity.

PITI
Principal, Interest, Taxes, and Insurance. These are the four components that typically make up a homeowner's total mortgage payment.

Planned Unit Development (PUD)
a type of real estate development that includes common areas and rules governed by an owners' association.

Points
prepaid interest equal to one percent of a mortgage loan. Lenders generally offer loans with several combinations of interest rates and points. Generally, the more points paid, the lower the interest rate. The best choice of interest rate/points may depend on how often you refinance.

Principal
the amount of debt, not including interest, on a loan.

Pre-Qualification
an initial evaluation by a lender of a borrower's credit and financial situation to determine eligibility for a loan.

Private Mortgage Insurance (PMI)
usually required by a lender if the down payment is less than 20% of the sale price. PMI protects the lender in the event of a default, and is usually terminated when the homeowner has built up 20% equity.

Quit-Claim Deed
a legal document by which a claim on property is denied. May be used to clear a cloud on title.