Par Value
The stated face value of a bond. Usually this is the amount paid to the investor when the bond matures, together with earned interest.

PITI (Principal, Interest, Taxes and Insurance)
Used to indicate what is included in a monthly payment on real property. Principal, interest, taxes and insurance are the four major portions of a usual monthly payment.

Point
An amount equity to 1 percent of the principal amount of an investment note. Loan discount points are a one-time charge assessed at closing by the lender to increase the yield on the mortgage loan to A competitive position with other types of investments.

Portfolio
The combined investment holdings of an individual or an institution.

Power of Appointment
The power given by an individual to another in a will or trust document to determine which persons will receive an interest in his or her estate.

Power of Attorney
An authority by which one person (principal) enables another (attorney in fact) to act for him/her. (1) General power - authorizes sale, mortgaging, etc. of all property of the principal. Invalid in some jurisdictions. (2) Special power - specifies property, buyers, price and terms. How specific it must be varies in each state.

Preferred Stock
A class of stock that has preference over common stock in the event of the liquidation of a company's assets. Typically, preferred stockholders do not have voting rights. (See Common Stock.)

Prepaid Interest
Interest paid before becoming due.

Prepayment Penalty
A penalty under a note, mortgagor deed of trust imposed when the loan is paid before it is due.

Pre-Qualifying
By pre-qualifying for a loan before looking at houses, you know how much of a loan you can get and therefore the maximum priced home you're looking for. Also you can reassure the seller that yours is an offer you can qualify for.

Prime Rate
The basic rate of interest on loans charged by commercial banks.

Principal
Amount of debt, not including interest. The face value of a note, mortgage, etc.

Private Equity
Aggregations of investments in smaller companies needing venture capital.

Private Mortgage Insurance (PMI)
An insurance contract written by a private corporation that protects a portion of the loan to the mortgagee against losses that might occur in the event of default and/or foreclosure on conventional loans. May also refer to the companies writing this type of coverage.

Probate
The process through which a will is proved to be valid.

Promissory Note
A promise in writing, and executed by the maker, to pay a specified amount during a limited time or on demand, or at sight, to a name person, or on order, or to bearer.

Prospectus
A booklet that provides full disclosure of relevant information about a security being offered for sale.

"Prudent Investor" Rule
Legal term that refers to the duty of the fiduciary to invest and manage assets in the best interests of another.