Payment Penalty
Fees paid by borrowers for the privilege of retiring a loan early.

Penalty
Money one will pay for breaking a law or violating part or all of the terms of a contract.

Permit
A document, issued by a government regulatory authority, that allows the bearer to take some specific action.

Personal Residence
The dwelling unit that one claims as one's primary home, This dwelling establishes one's legal residence for voting, tax, and legal purposes.

Planned Unit Development (PUD)
A zoning classification that allows flexibility in the design of a subdivision. Planned Unit Development zones generally set an overall density limit for the entire subdivision, allowing the dwelling units to be clustered to provide for common open space.

Plat
A plan or map of a specific land area.

Plat Book
A public record containing maps of land, showing the division of the land into streets, blocks, and lots and indicating the measurements of the individual parcels.

Plot Plan
A diagram showing the proposed or existing use of a specific parcel of land.

Plottage
Creating plottage value of land by assembling small, adjacent parcels of land into a larger, more useful parcel.

Plottage Value
Increment in the value of land comprised purchase loan under which a sum of cash contributed by the by assemblage of smaller plots into one ownership. owner is set aside in an account pledged to the lender.

Points
Fees paid to induce lenders to make a mortgage loan. Each point equals 1% of the loan principal. Points have the effect of reducing the amount of money advanced by the lender. Same as discount points.

Possession
The holding, control, or custody of property for one's use, either as owner or person with another right.

Power of Attorney
An instrument authorizing a person to act as the agent of the person granting it.

Power Of Sale
A clause sometimes inserted in mortgages or deeds of trust; grants the lender (or trustee) the right to sell the property upon certain default. The property is to be sold at auction but court authority is unnecessary.

Preclosing
A rehearsal of the closing whereby instruments are prepared and signed by some or all parties to the contract. Used when closings are expected to be complicated.

Premises
Land and tenements; an estate; the subject matter of a conveyance.

Premium
The cost of an insurance policy. The value of a mortgage or bond in excess of its face amount.

Prepaid Expenses
Amounts that are paid prior to the period they cover.

Prepaid Interest
Interest paid in advance of the time it is earned.

Prepayment Clause
A clause in a mortgage that gives a mortgagor (borrower) the privilege of paying the mortgage indebtedness before it becomes due. Sometimes there is a penalty for prepayment, with waiver of the interest that is not yet due.

Prepayments
Advance payments of expenses such as insurance and taxes, often into an escrow account.

Pretax Income
The amount earned from a business or investment before deducting income taxes.

Prime Rate
The lowest commercial interest rate charged by banks on short-term loans to their most credit-worthy customers. The prime rate is not the same as the long-term mortgage rate, though it may influence long-term rates. Also, it is not the same as the consumer loan rate that is charged on personal property loans and credit cards. Mortgage rates and consumer loan rates are generally higher than the prime rate, but exceptions occur at times.

Principal
The one who owns or will use property.

Principal and Interest Payment (P & I)
A periodic payment, usually paid monthly, that includes the interest charges for the period plus an amount applied to amortization of the principal balance. Commonly used with amortizing loans.

Principal Residence
The place one lives in most of the time. May be a single-family house, condominium, trailer, or houseboat. To defer capital gain taxes on the profit from a home, the home must be used as the taxpayer's principal residence.

Principal, Interest, Taxes and Insurance Payment (PITI)
The periodic (typically monthly) payment required by an amortizing loan that includes escrow deposits. Each periodic payment includes a principal and interest payment plus a contribution to the escrow account set up by the lender to pay insurance premiums and property taxes on the mortgaged property.

Private Mortgage Insurance (PMI)
Default insurance on conventional loans, provided by private insurance companies.

Producer Price Index (PPI)
A measurement of the average change in the selling prices of goods and services sold by domestic producers, and therefore an indicator of inflation. The most quoted PPI figure is the change in the prices of finished goods, that is, goods that are ready for sale to the final user (either households, businesses or governments). The so-called "core PPI" reflects the changes in price of finished goods excluding food and energy. The finished-good PPI and the Consumer Price Index differ due to the latter's inclusion of distribution costs, sales taxes, and government subsidies, as well as the types of products covered. The PPI is released by the Bureau of Labor Statistics in mid-month for the previous month.

Productivity
The measure of output per hour, and one of the most critical indicators of an economy's long-term health. Unfortunately, it's also very tricky to measure, especially in the services industries. Growth in productivity allows wages to rise while prices remain stable. The Bureau of Labor Statistics publishes quarterly productivity figures eight times a year (including revisions).

Pro-Forma Statement (from Latin pro forma, "according to form").
Financial statements showing what is expected to occur.

Promissory Note
A promise to pay a specified sum to a specified person under specified terms.

Property
The rights that one individual has in lands or goods to the exclusion of all others; rights gained from the ownership of wealth.

Property Tax
A government levy based on the market value of privately owned property. Sometimes referred to as ad valorem tax or real estate tax.

Prorate
To allocate between seller and buyer their proportionate share of an obligation paid or due; for example, to prorate real property taxes or insurance.