Frost Mortgage Banking Group Glossary of Terms

Partial Payment

A payment that is not sufficient to cover the scheduled monthly payment on a mortgage loan.

Payment Change Date

The date when a new monthly payment amount takes effect on an adjustable rate mortgage (ARM) or a graduated-payment adjustable rate mortgage (GPARM). Generally, the payment change date occurs in the month immediately after the adjustment date.

Periodic Payment Cap

For an adjustable rate mortgage (ARM), a limit on the amount that payments can increase or decrease during any one adjustment period.

Periodic Rate Cap

For an adjustable rate mortgage (ARM), a limit on the amount that the interest rate can increase or decrease during any one adjustment period, regardless of how high or low the index might be.

Personal Property

Any property that is not real property.

PITI

See principal, interest, taxes and insurance (PITI) below.

PITI Reserves

A cash amount that a borrower must have on hand after making a down payment and paying all closing costs for the purchase of a home. The principal, interest, taxes, and insurance (PITI) reserves must equal the amount that the borrower would have to pay for PITI for a predefined number of months.

See PUD.

Point

A one-time charge by the lender for originating a loan. A point is 1 percent of the amount of the mortgage.

Power Of Attorney

A legal document that authorizes another person to act on one’s behalf. A power of attorney can grant complete authority or can be limited to certain acts and/or certain periods of time.

Prearranged Refinancing Agreement

A formal or informal arrangement between a lender and a borrower wherein the lender agrees to offer special terms (such as a reduction in the costs) for a future refinancing of a mortgage being originated as an inducement for the borrower to enter into the original mortgage transaction.

Preforeclosure Sale

A procedure in which the investor allows a mortgagor to avoid foreclosure by selling the property for less than the amount that is owed to the investor.