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GLOSSARY
Piggyback loan
A piggyback loan is a second mortgage that's taken out to avoid mortgage insurance. Mortgage insurance is typically required on mortgages that finance more than 80 percent of the home's purchase price. A homebuyer who doesn't have a 20 percent cash down payment can fund a first mortgage for 80 percent and use a piggyback loan to cover the remainder of the purchase price.
Piggyback mortgage
A type of second mortgage typically used to avoid paying for mortgage insurance, which is required on mortgages with less than 20 percent down. The borrower takes out a primary mortgage for 80 percent of the purchase price and then a second "piggyback" mortgage to cover all or part of the down payment.
PIN
An Acronym for Personal Identification Number. This number is used to access bank accounts at ATM's or sometimes online and should be kept a secret.
PIP
PIP, also called personal injury protection, is an optional coverage available on auto insurance policies that pays the medical expenses incurred by you and your passengers that result from a qualified accident.
PITI
These are the four components of the monthly payments to the lender, i.e. the principle, interest, taxes and insurance. Debt to income ratio is calculated by the lender from this amount. Sometimes mortgage insurance is also included in an impounded loan.
PITI reserves
An amount of cash that a homebuyer must have on hand after all of the closing costs and down payments have been made. This amount is generally equal to a specified amount of mortgage payments including principal, taxes, and insurance.
Planned unit development (PUD)
A type of ownership where a unit or the whole building is owned by an individual who lives in it and where the ownership of common spaces is shared by other members of the homeowner's association for the benefit of all owners.
Planned urban development - PUD
Planned urban development, or PUD, is a zoning class that allows for residential and commercial buildings. The PUD classification allows builders to develop residential, retail, and professional buildings into one community, so that residents can live, work, and play locally.
Plat
A map showing the way a parcel of land has been divided into individual lots. This map will also show the streets and easements.
Pledged asset
Pledged asset is property that secures debt and remains in possession of the lender until the debt requirements have been met. While the asset owner/borrower has to transfer the pledged asset to the lender, the lender has no ownership rights to the pledged asset unless the borrower defaults.
Pledging
Pledging is the process of providing assets to a lender for use as loan collateral. Pledged assets are held by the lender until all debt conditions have been met, but the lender doesn't own those assets unless the borrower defaults.
PLUS loan
Loans that are not need based that the parents of the student may take out. These loans are offered by the college and the government and are determined by the FAFSA.
PMI
PMI, or private mortgage insurance, is coverage that protects the lender from costs associated with foreclosing on a mortgage loan. Lenders require PMI coverage when the mortgage loan finances more than 80 percent of the property's value. PMI premiums are paid by the borrower.
Point
Point is short for percentage point. In bonds, the term is used in reference to changes in interest rates; a rate that changes from 8 percent to 9 percent is said to have moved up 1 point. In real estate lending, a point is an upfront fee equal to 1 percent of the loan amount. Point can also refer to value changes in stocks and stock indices, even though these aren't percentage figures. For example, if the Dow Jones Industrial Average rises from 12,200 to 12,325, it is said to have increased 125 points.
Point-of-sale
Point-of-sale is the location, physical or virtual, where sales are made. In a retail store, the point-of-sale is the cash register area where consumers pay for goods. For an Internet retailer, the point-of-sale is the interface that accepts the consumer's payment information.