Periodic cap The maximum rate increase for a specific period for a specific loan (ARM) only.

PITI Principal, interest, taxes and insurance--the components of a monthly mortgage payment.

Planned Unit Developments (PUD) A subdivision of five or more individually owned lots with one or more other parcels owned in common or with reciprocal rights in one or more other parcels.

Plat. A map that shows all boundaries of a piece of property.

Points Charges levied by the mortgage lender and usually payable at closing. One point represents 1% of the face value of the mortgage loan.

Pre-approval. A process whereby a potential home buyer secures a guaranteed mortgage approval before making an offer on a house. A lending institution guarantees in writing to grant a loan for a specified amount. Not to be confused with pre-qualification.

Prepaids Those expenses of property which are paid in advance of their due date and will usually be prorated upon sale, such as taxes, insurance, rent, etc.

Prepayment penalty A charge imposed by a mortgage lender on a borrower who wants to pay off part or all of a mortgage loan in advance of schedule.

Pre-qualification. Some lenders "pre-qualify" mortgage applicants in less than an hour by performing cursory checks. Seldom can a lender fully check an applicant's credit, asset and debt status this quickly, so final approval typically takes at least a few more days. Though such preliminary pre-qualifications may soon lead to a full pre-approval, there is no guarantee until the applicant receives a letter, certificate or wallet-size card bearing the mortgage-holder's name and maximum loan amount.

Principal Amount of debt, not including interest. The face value of a note or mortgage.

Private mortgage insurance (PMI) Insurance provided by nongovernment insurers that protects lenders against loss if a borrower defaults. Fannie Mae generally requires private mortgage insurance for loans with loan-to-value (LTV) percentages greater than 80%.