A • B • C • D • E • F • G • H • I • J • K • L • M • N • O • P • Q • R • S • T • U • V • W • X • Y • Z • Notes on Using this Glossary - O -Offer: A proposal, oral or written, to buy a piece of property at a specified price with specified terms and conditions. Option: The exclusive right to purchase or lease a property at a stipulated price or rent within a specified period of time. - P -Personal Property: Moveable property that is not by definition real property and includes tangible property such as moneys, goods, chattels, as well as debts and claims. Per Diem Interest: Interest calculated per day. (Depending on the day of the month on which closing takes place, you will have to pay interest from the date of closing to the end of the month. Your first mortgage payment will probably be due the first day of the following month.) PITI: Abbreviation for principal, interest, taxes, and insurance, the components of a monthly mortgage payment. Points: Sometimes referred to as “discount points.” A point is 1 percent of the amount of the mortgage loan. For example, if a loan is for $250,000, one point is $2,500. Points are charged by a lender to raise the yield on a loan at a time when money is tight, interest rates are high, and there is a legal limit to the interest rate that can be charged on a mortgage. Buyers are prohibited from paying points on HUD or Veterans’ Administration guaranteed loans. (Sellers can pay them, however.) On a conventional mortgage, points may be paid by either buyer or seller, or split between them. Prepayment: Payment of mortgage loan, or part of it, before due date. Mortgage agreements often 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 Federal Housing Administration does not permit such restrictions in FHA insured mortgages. Principal: The basic element of the loan as distinguished from the interest and mortgage insurance premium. In other words, principal is the amount upon which interest is paid. The word also means one who appoints an agent to act for and on behalf of; the person bound by an agent’s authorized contract. Property: The term used to describe the rights and interests a person has in lands, chattels, and other determinate things. Purchase Agreement: An offer to purchase that has been accepted by the seller and has become a binding contract. - Q -Quit Claim Deed : A deed that transfers whatever interest the maker of the deed may have in the particular parcel of land. A quit claim deed is often given to clear the title when the grantor’s interest in a property is questionable. By accepting such a deed, the buyer assumes all the risks. Such a deed makes no warranties as to the title, but simply transfers to the buyer whatever interest the grantor has. (See deed.) |