payment plan: A schedule determined by a creditor and a debtor for repayment of a debt.
personal loan: A loan for personal use that is not backed by collateral, such as a home or automobile. This is neither a business loan nor a home equity or mortgage loan.
piggy back loan: A second home loan that allows a buyer, who is able to put 10% down on a home, to avoid mortgage insurance. With a 10% down payment, the first loan is for 80% of the purchase price, the second "piggy back" loan is for 10% of the purchase price. This is often called an 80-10-10 loan.
piti: Principal, Interest, Taxes, and Insurance, which comprise the monthly mortgage payment.
points: A one-time-only fee paid to the lender, sometimes in exchange for
a slightly lower mortgage rate. One point equals one percent of the total amount
borrowed.
prepayment: Payment of a mortgage or loan, or part of it, before the due date. Some agreements may restrict the right of prepayment either by limiting the amount that can be prepaid in any one year or charging a penalty for prepayment. The FHA does not permit such restrictions in FHA-insured mortgages.
principal: The amount on which the interest is paid.
quitclaim deed: A deed that transfers whatever interest the maker of the deed may have in the particular parcel of land and is often given to clear the title when the grantor's interest in a property is questionable. It makes no warranties as to the title, but simply transfers to the buyer whatever interest the grantor has. By accepting such a deed the buyer assumes all risks. (See also Deed.)
refinance: When a mortgagor replaces the current mortgage with a new one. Refinancing is generally done when a lower interest rate or monthly payment can be achieved or when the mortgagor wants to get cash out.
reorganization bankruptcy: A condition in which a debtor reorganizes or restructures his or her assets and debts.
reverse mortgage: A tax-free loan for home owners whose mortgage is paid in full, but want to use the equity in their home.
special warranty deed: A deed in which the seller guarantees the property title is clear for all of his tenure (not before then) and that he has done nothing during this time that might in the future affect the title. (See Deed.)
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