Mortgage and Real Estate Glossary
Alberta Equity's glossary contains hundreds of terms. With this tool, you can click or search through the largest real estate and mortgage glossary in Canada!
- Parking
- A term that refers to depositing, or "parking," cash in a high-yield money market account until you need to move it to a chequing account to pay bills.
- Passbook
- A book in which all the transactions in a bank account are noted. This book may list the transaction codes and the customer's responsibilities.
- Passive Activity
- An activity in which you do not materially participate. Real estate rentals and limited partnerships are examples of passive activities.
- Passive Loss
- Loss from a passive activity. Passive loss rules limit the amount of passive loss you can deduct to the total of your other income from passive activities.
- Payee
- The name of the person to whom the money in a cheque is to go.
- Payment Adjustment Period
- The time during which payments on an adjustable-rate mortgage (ARM) may go up or down.
- Payment Cap
- A contractual limit on the size of the monthly payment of an adjustable-rate mortgage or other variable rate loan.
- Payroll Taxes
- A tax based on wages, tips and salaries paid. The tax is deducted from the employees pay.
- PC Banking
- A service that allows a bank customer to obtain account information and perform certain bank transactions through a personal computer.
- Penalty
- A mortgage penalty is a set rate or length of time the penalty will be charges based on remaining mortgage amount. Usually three months interest or interest rate differential. Penalty — A mortgage penalty is a set rate or length of time the penalty will be charges based on remaining mortgage amount. Usually three months interest or interest rate differential.
- Penalty Rate
- Several percentage points higher than a card's current annual percentage rate, which goes into effect after two late payments. On some cards, a single late payment triggers a penalty rate.
- Per Item Charge
- The fee charged to an account holder who has exceeded the number of free transactions allotted to the described account and/or the balance in the account did not meet the average monthly balance required to waive the fee.
- Per-diem Interest
- Interest that is charged daily; usually refers to the partial month's interest that the buyer pays on the mortgage covering the period from the day of closing to the end of the month.
- Periodic Rate
- The interest rate described in relation to a specific amount of time. The monthly periodic rate, for example, is the cost of credit per month; the daily periodic rate is the cost of credit per day.
- Periodic Rate Cap
- In an adjustable-rate mortgage (ARM), it limits how much an interest rate can increase or decrease from one adjustment period to the next.
- Personal Consumption Spending
- What households collectively spend on goods and services.
- Personal Disposable Income
- Personal income minus personal income tax payments. Also called "take-home pay."
- Personal Finance Manager
- Specialized computer programs that help customers carry out a variety of personal finance activities. These programs typically allow consumers to do much of their work off-line, then dial in to complete their bank transactions.
- Personal Identification Number (PIN)
- A unique, confidential number or pass code, usually consisting of four to six digits, entered by a customer when using an Automated Teller Machine (ATM) or Interac Direct Payment, that gives the customer access to his or her account.
- Personal Loan
- A loan made for personal, family, or household use as opposed to a business-type loan or a long-term mortgage loan to finance real estate.
- Personal Property
- Chattel, or any movable, personal property that is not permanently attached to a house.
- Personal Property Taxes
- Also called property taxes, can include real property, intangible or tangible property tax. Generally, everything that is not real estate is considered personal property. To differentiate between real property and personal property, the tax assessing official must consider the manner in which property is attached to or secured at the location.
- Personal Savings
- The difference between personal disposable income and personal consumption spending.
- Personalized Cheque
- A cheque which has your name and account number printed on it.
- PI
- Acronym for the elements of a mortgage payment: principal and interest.
- PIT
- Principal, interest and taxes. The components of a monthly mortgage payment.
- PITI
- Acronym for the elements of a mortgage payment: principal, interest, taxes and insurance.
- Plat
- A map that shows a parcel of land and how it is subdivided into individual lots. Plat maps also show the locations of streets and easements.
- Point
- A point equals 1 percent of a mortgage loan. Some lenders charge "origination points" to cover expenses of making a loan. Some borrowers pay "discount points" to reduce the loan's interest rate.
- Point of Sale
- An electronic payment system for retail goods and services, through the use of credit cards or debit cards that directly access and deduct funds from a customer's chequing account. Also known as POS.
- Portfolio
- A collection of investments.
- Portfolio Lender
- A company that underwrites mortgage loans and keeps them on the books instead of selling them on the secondary market.
- Possession
- The condition of having signed all the papers at closing and having received keys to the house.
- Power of Attorney
- A document in which the signer authorizes someone to conduct business in his or her name — signing title documents and cheques, for example.
- Power of Sale
- The right of a mortgagee to force the sale of the property without judicial proceedings should default occur.
- Pre-Approval
- A process that mortgage lenders use to determine how much money they would lend you based on a thorough review of your financial situation. Lenders issue a pre-approval letter which strengthens your position when bidding on a home, as it shows sellers that you will be able to raise funds needed to purchase.
- Pre-approval Letter
- A document from a lender or broker, estimating how much a potential home-buyer could borrow, based on current interest rates and a preliminary look at credit history.
- Pre-Authorized Payments
- A way to set up a monthly payment to be automatically paid from a bank account.
- Pre-computed Loan
- With a pre-computed loan, the interest owed over the life of the loan is calculated using a standard amortization table. Once you sign on the dotted line for this type of auto loan, you're obligated to pay back principal plus the full amount of interest that will accrue over the entire term of the loan.
- Pre-qualification
- An informal process in which a lender will offer an opinion on how much money you may be able to borrow. This opinion is based entirely on the financial information you provide and is neither binding nor necessarily accurate because lenders have not yet verified your financial information.
- Pre-sold Home
- A house that has been sold before it is built. The opposite of a house built on spec.
- Prepaid Expenses
- also called prepaid items or prepaids — Recurring costs such as taxes, insurance and interest that are paid at closing and which cannot be financed.
- Prepaid Interest
- Interest that a borrower pays before it is due, usually to save taxes.
- Prepaids
- Those expenses of property which are paid in advance of their due date and will usually be prorated upon sale, such as taxes, insurance, rent, etc.
- Preparation Charges
- An additional charge that dealers try to impose on buyers. It represents pure profit for the dealers, who have already been paid by the manufacturer for the cost of preparing the car for sale.
- Prepayment Clause
- A clause that stipulates the amount of principal a borrower may prepay ahead of schedule without penalty as well as the prepayment penalty for larger prepayments.
- Prepayment Penalty
- A lender's charge to the borrower for paying off the loan before the end of the term.
- Previous Balance
- A method used by some card issuers where they base their finance charges on the amount owed at the end of the previous billing cycle.
- Prime Lending Rate
- The rate of interest charged on loans by chartered banks to their most creditworthy customers.
- Prime Rate
- The rate that is suggested by the Bank of Canada on which most banks base their prime mortgage lending rate.
- Principal
- The original balance of money lent on an outstanding loan and fees, excluding interest. Also the remaining balance of a loan, excluding interest.
- Principal and Interest
- The total amount needed to pay on a loan each month. This includes the interest owed as well as the amount being paid towards the principal.
- Principle of Conformity
- The notion that a house will fetch a fair price if it is situated among houses of similar size, style and condition.
- Principle of Progression
- The notion that a smaller house's value will be enhanced if it is near larger, fancier houses.
- Principle of Regression
- The notion that the value of a larger or fancier house will be reduced if it is near smaller, lower-priced houses.
- Probate Sale
- Sale of property after the death of the owner, supervised by a court, with proceeds divided among creditors and heirs.
- Production Home
- A mass-produced house, built as part of a housing development.
- Promissory Note
- A written promise to repay a loan by a specified time.
- Property Report
- 1. A legal document prepared by a surveyor that illustrates the locations of all visible public and private improvements relative to property boundaries. 2. A legal disclosure that developers of timeshare properties are required to give to prospective buyers.
- Property Tax
- A levy by a city on real estate and personal property whose amount varies depending on the property's value.
- Property Taxes
- Taxes figured on the value of property you own.
- Property Value
- The worth of a piece of real estate, based on the price a buyer and seller would negotiate.
- Provision for Credit Losses
- The amount deducted from income equal to the amount by which a bank adjusts its loan balances to reflect anticipated losses on them.
- Purchase Agreement
- A written promise to pay a specific amount for a property at a specified time. The purchase agreement is a written statement of the offer, which both the borrower and the seller will sign if the offer is accepted.
- Purchase Contract
- A written promise to pay a specific amount for a property at a specified time. The purchase contract is a written statement of the offer, which both the borrower and the seller will sign if the offer is accepted.
- Purchase Option
- In real estate, an agreement under which a portion of monthly rent may be credited toward eventual purchase of the property. In automobiles, the portion of a lease that establishes the amount a lessee may pay the lessor at the end of the lease to purchase the vehicle. The price is usually the residual value.
- Purchase Price
- The total selling price of the home, including the cash down payment and the principal on the loan.
