Sullivan Properties

Real Estate Glossary

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periodic interest rate cap
Limits the increase and decrease amounts on the note rate of an adjustable rate mortgage at each rate adjustment period.

A payment that combines Principal, Interest, Taxes and Insurance.

Planned Unit Development (PUD)
A project, usually consisting of a large parcel of land, that consists of both private and common areas and is maintained by a homeowners’ association.

One percent of the amount of a mortgage is one point.

power of attorney
A legal document authorizing a person to act on another person’s behalf. This can apply to certain acts for certain periods, or can grant complete authority to the individual.

A borrower usually completes a loan application which is then reviewed and approved by an underwriter. The approval applies to a specific loan amount before a property is chosen.

Any payment made on a loan before the due date of the payment. Also applies to payments that are larger than the amount due.

prepayment penalty
If a loan is payed off before it is due, the terms of that loan may require a penalty payment.

prime rate
The lowest commercial interest rate available on short term loans. This rate is only made available to a bank’s most preferred customers.

promissory note
A promise made in writing to repay a specific amount over a specific period of time.

purchase agreement
A contract in which a buyer and seller agree to the terms of a real property sale.

purchase money transaction
The purchase of a property with money or something of equivalent value to the buying price.