Real Estate Glossary (Part 8 of 10)

Real Estate Broker/Owner with MBA Broker Consultants CalBRE Broker #00983670

August 30, 2013 08:03 PM

Brief Definition of Terms

In the real estate industry, you will discover terms (jargon) that you've never heard before. What do they really mean? Here's a list that will guide consumers to understand terms commonly used in the real estate industry.

Pest Control Inspection	An inspection usually performed on a home when purchasing. Sections 1 & 2 of the inspection tell what parts of the property should be fixed, Section 1 is usually done before closing escrow. It is negotiable between buyer and seller.
PITI	The total monthly payment of a loan and the cost of the home, including Principal, Interest, Taxes, and Insurance.
Points	An abbreviation for percentage points. For example, 3 points is 3%.
Pre-approve	Lender commits to lend to a potential borrower; commitment remains as long as the borrower still meets the qualification requirements at the time of purchase.
Pre-qualify	A lender informally determines the maximum amount an individual is eligible to borrow.
Prepayment	Payment of the mortgage loan before the scheduled due date. This might occur if the borrower makes extra payments, sells the property, or refinances the existing loan. A loan may be subject to a prepayment penalty. It is important to find out whether or not your loan has a prepayment penalty.
Principal	The amount borrowed from a lender, not including interest or additional fees.
Pro-rate	The process of dividing a fee into smaller equal chunks. For instance, rent that is $300 per month would be divided between 30 days per month and pro-rated at $10 per day.
Promissory Note	Following a loan commitment from the lender, the borrower signs a note promising to repay the loan under stipulated terms. The promissory note establishes personal liability for its repayment. Also referred to as the "Note".
PUD (Planned Unit Development)	A zoning classification that applies to subdivisions. PUDs include individually owned units as well as some common space that is jointly owned, similar to a condominium. Many times a PUD includes a monthly HOA fee.