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.

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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.