PACKAGE LOANCombination of two types of loans, e.g., construction loan and permanent financing. The borrower benefits by only having to negotiate with a single lender and only having to pay a single set of closing costs.
PARTIAL DISCHARGEA discharge of a definite portion of the mortgage lands usually given after the mortgagor has prepaid a specific portion of the mortgage debt.
PARTICIPATION LOANAn agreement whereby two or more lenders share in advancing a portion of a loan made by the originating or "lead" bank. Terms of the agreement set out a method of apportionment and interest rates. The lead lender generally services the loan for which it receives a fee.
PARTNERSHIP1) An arrangement whereby individuals join together to lose money and/or 2) An arrangement whereby in the beginning a general partner has the experience and the limited partners have the money and in the end, the general partner has the money and the limited partners have had the experience.
PERCENTAGE RENTAL AGAINST MINIMUMA rental paid under a percentage lease whereby rent paid by a tenant varies according to volume of business, e.g., a percentage of gross receipts, sales or revenue, and paid to the extent that it exceeds a minimum rental.
PERCENT PAID OFFThe percent of principal which is paid off at a given time under an amortization schedule, i.e. equity build up.
PERCENTAGE RENT PLUS MINIMUMA percentage rental which must be paid in addition to the minimum, i.e. minimum rent is not credited against percentage rent payable.
PERMANENT FINANCINGA long-term mortgage usually intended to finance both land and improvements after completion of construction and used to pay off a construction loan.
PERSONAL LIABILITYA person liable on a debt to the full extent of his entire assets, as opposed to limited liability where a maximum or a ceiling is fixed on the amount of assets that can be drawn upon to satisfy a debt. Joint and several liability fixes the liability of each individual borrower for the total debt; joint liability binds all the borrowers together in one action; and several liability fixes the liability of each borrower to the extent of his share of the debt.
PERSONAL PROPERTYAll property except land and the improvements thereon.
POLARISThe Province of Ontario Land Registration Improvement System’s new simplified method of registration of transfer, charge, discharge, etc.
PORTABILITYA mortgage option that enables borrowers to take their mortgage with them to another property, without penalty. A transfer fee may apply.
POSTPONEMENT CLAUSEA junior mortgage may contain a postponement clause, by which the mortgagee permits the borrower to renew or replace an existing first mortgage that falls due prior to the maturity date of the junior mortgage.
POWER OF SALEThe right of a mortgagee to force sale of the property without judicial proceedings should default occur.
PREPAYMENT CLAUSEA clause inserted in a mortgage, which gives the mortgagor the privilege of paying off all or part of the mortgage debt in advance of the maturity date.
PREPAYMENT PENALTYThe sum of money (the amount of extra interest as set out in the mortgage document) a mortgagee may require from a mortgagor to exercise the option in a mortgage to prepay any outstanding principal.
PRE-QUALIFICATIONAn interview with a client (usually) prior to the writing of an offer to purchase real estate in order to determine the applicant’s qualifications for mortgage purposes.
PRIME RATEThe rate charged by banks to their most credit-worthy borrowers. Sometimes also referred to as the rate of interest paid on government bonds.
PRINCIPALThe amount actually borrowed or still owing on a mortgage. Interest is paid on the principal amount.
PRIOR CHARGEAn encumbrance ranking in priority to the mortgage in question.
PRO FORMA (Statement)A financial statement of the gross income, operating costs and net operating costs and net operating income for a specified financial period, e.g. one year, using specified assumptions.
PRIOR ENCUMBRANCEA claim on the property, ranking in priority to the mortgage in question.
PROGRESS ADVANCESLoan advances made on a property under construction whereby the lender makes advances on the basis of the retention at all times of an amount of the loan which in his/her opinion will be sufficient to complete the building should the borrower fail to complete it.
PROJECTED INCOMEEstimated income from a property.
PROMISSORY NOTEA written document acknowledging a debt and promising payment.
PROPERTYRefers to the rights which an individual enjoys by virtue of his/her ownership.
PURCHASE-MONEY MORTGAGEA mortgage loan taken back by the vendor of property in lieu of purchase money in order to help finance the purchaser.