P – First Colony Mortgage
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mortgage glossary

A B C D E F G H I J L M N O P R S T U V

Points

A fee lenders often charge if the borrower chooses to buy the interest rate down

Pre-approval

A commitment by a lender to make a mortgage loan to a specified borrower, prior to the identification of a specific property. It is designed to make it easier to shop for a house. Most sellers require a pre-approval letter to be submitted with an offer to verify the buyers can obtain financing for the property.

Prepayment

A payment made by the borrower over and above the scheduled mortgage payment.

Prepayment penalty

A charge imposed by some lenders if the borrower pays off the loan early. The charge is usually expressed as a percent of the loan balance at the time of prepayment, or a specified number of months interest. Prepayment penalties and charges are becoming less common.

Processing

Compiling and maintaining the file of information about a mortgage transaction, including the credit report, appraisal, verification of employment and assets, and so on. This part of the loan process takes place before underwriting.

Property flipping

Buying a property and selling it shortly thereafter for a higher price