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Houston Mortgage > Glossary >
Real Estate > P 1-10
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Payment Schedule
This information on the Truth in Lending Disclosure Statement shows the amount of the first loan payment, the amount and number of the regularly scheduled payments (usually monthly), the amount of the final payment, and when all those payments are due. The actual payment due may be greater for a number of reasons, including taxes and insurance. If the loan has an "adjustable rate," the actual payments will differ from the payment schedule.
Points
A fee charged by the lender as additional compensation for making the loan. One "point" is equal to 1% of the principal amount of the loan.
Prepayment Penalty
The charge which can be imposed if you pay off your loan before maturity. The Truth in Lending Disclosure Statement will show whether a loan has a prepayment penalty.
Prime Loan
A loan offered to borrowers with better credit history (sometimes called "A" loans). Prime loans generally are priced lower and cost the borrower less.
Private Mortgage Insurance
Private Mortgage Insurance (PMI or MI)- Insurance required to be paid for by the borrower to protect the lender in the event payments are not made on time; most often required when the loam amount exceeds 80% of the purchase price.
Processing Fee
A fee charged by lenders or brokers to prepare a complete loan application file. A processing fee may be charged to the borrower and shown on the Settlement Statement (HUD-1).
Promissory Note
A legal contract in which the borrower promises to pay back the loan. The "promissory note" sets forth the terms and conditions that apply to the loan repayment, such as interest rate, when payments are due, where payments are made, what happens if payments are not made, etc.
Purchase Money Loan/Mortgage
A loan for the purpose of purchasing a home.
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