New York Real Estate Glossary P
(Pre-Qualification - Purchase Money Transaction)
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The process of determining how much money a prospective home buyer will
be eligible to borrow before he or she applies for a loan.
The interest rate that banks charge to their preferred customers. Changes
in the prime rate influence changes in other rates, including mortgage
The amount borrowed or remaining unpaid. The part of the monthly payment
that reduces the remaining balance of a mortgage. More
The outstanding balance of principal on a mortgage. The principal balance
does not include interest or any other charges. See remaining balance.
Principal, Interest, Taxes, and Insurance (PITI)
The four components of a monthly mortgage payment. Principal refers
to the part of the monthly payment that reduces the remaining balance
of the mortgage. Interest is the fee charged for borrowing money. Taxes
and insurance refer to the amounts that are paid into an escrow account
each month for property taxes and mortgage and hazard insurance.
Private Mortgage Insurance (MI)
Mortgage insurance that is provided by a private mortgage insurance
company to protect 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.
A written promise to repay a specified amount over a specified period
A meeting in an announced public location to sell property to repay
a mortgage that is in default.
Purchase and Sale Agreement
A written contract signed by the buyer and seller stating the terms
and conditions under which a property will be sold.
Purchase Money Transaction
The acquisition of property through the payment of money or its equivalent.