Terms starting with the letters N thru O
Negative Amortization
Occurs when monthly payments are not large enough to pay all the interest
due on the loan. This unpaid interest is added to the unpaid balance
of the loan. This has the effect of increasing the loan amount.
This phenomenon in home lending occurs when a payment cap restricts
the repayment, to an amount less than the payment necessary to reduce
the principal balance.
Negotiable
Instrument
A written instrument signed by a maker or drawer, containing an
unconditional promise to pay a certain sum of money, which can be passed
freely from one person to another.
Non
Assumption Clause
A statement in a mortgage contract forbidding the assumption of the
mortgage without the prior approval of the lender. (The signed obligation
to pay a debt, as a mortgage note)
Non
Conforming Loan
New Home loans allowing the buyer to borrow over a certain amount set
by the Federal National Mortgage Association or the Federal Home Loan
Mortgage Corporation.
NOTE
A written agreement and promise from the borrower(s) to pay a definite
sum of money at a stated interest rate during a specified date and term.
The note contains a description of the collateral and conditions under
which the loan is to be repaid.
Obsolescence
Impairment of desirability and usefulness of the property resulting
from economic, functional, physical, fashion, or other changes.
Offer
A promise to act in a certain manner provided the other party will
act in the manner requested.
Offeree
One to whom an offer is made.
Offeror
One who makes an offer.
Original
Value
Lesser of the sales price or the appraised value of the property at
the time of closing.
Origination Fee
The fee charged by a lender to prepare loan documents, make credit checks,
inspect and sometimes appraise a property; usually computed as a percentage
of the face value of the loan. Origination fees are paid by the
lender or included in the loan as part of the closing
costs. Lender's can also charge an origination fee to the
borrower, when funding the mortgage with a table
lending mortgage broker. Origination fees are considered tax
deductible points.
Outstanding
Debt to Consolidate
The total amount of all debt the borrower desires to payoff and consolidate
into one loan and monthly payment.
Owner Financing
A purchase in which the seller provides all or part of the financing.
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