| Term | Definition |
|---|
| PMI | Acronym - private mortgage insurance. |
| points | Fees paid to induce lenders to make mortgage loans at a particular interest rate. Each point is equal to one percent (1%) of the loan principal. Same as discount points. |
| police power | The authority of a government to adopt and enforce law governing the use of real estate based on the need to promote public safety, health, and general welfare. |
| power of attorney (POA) | A written authorization by a person to another person to act for him on his behalf. |
| prepayment | Paying off all or part of the mortgage before the scheduled date. |
| prepayment clause in a mortgage | Statement of the terms upon which the mortgagor (borrower) may pay the entire or stated amount on the mortgage principal at some time prior to the due date. |
| prepayment penalty | A fee paid to the lending institution for paying a loan prior to the scheduled maturity date. |
| primary mortgage market | Lenders who originate loans and makes funds available directly to the borrowers. Contrast with secondary mortgage market. |
| prime rate | The interest, or discount rate charged by a commercial bank to its largest and strongest customers. |
| principal | The amount of money owed to the lender not including interest. |
