OCCUPANCY:
The physical control and possession of a building or property.
OFFER:
To make available, to express a willingness (whether in writing or orally), in the case of real estate, to inform another party of your willingness to sell or buy a specific property on terms set out in your offer. An offer, once made, may be accepted at any time before it is rescinded. Once accepted, the offer and acceptance generally form a binding contract.
OFFER AND ACCEPTANCE:
Components of a contract, applicable to the real estate situation where a Purchaser may make an offer on a property and the Vendor may accept that offer.
OFFER TO PURCHASE:
A written expression of a person's willingness to purchase a certain property on terms expressed in the offer.
OFFER TO SELL:
In general, a written expression of a person's willingness to sell a certain property on terms expressed in the offer.
OPEN END MORTGAGE:
A loan which is specifically drafted to allow the borrower to borrow further funds at a later date without requiring the preparation and registration of new mortgage documentation.
OPEN HOUSE:
An advertised period of time in which a property which is for sale is available for inspection by prospective purchasers.
OPEN LISTING:
An agreement whereby the owner of the property may enlist more than one broker to attempt to sell the property and the commission is payable only to the successful agent.
OPEN MORTGAGE:
A mortgage which may be prepaid in full or in part at any time during that life of the mortgage without notice, bonus or penalty.
OPTION RISK:
The downside of giving a borrower an option, such as the possibility that she may prepay an open mortgage and reduce the income generated to the lender by the accumulation of interest over the life of the mortgage.
OPTION TO PURCHASE LEASED PROPERTY:
A clause of a rental agreement allowing the tenant the right to buy the leased property upon terms and conditions set out in the agreement.
ORIGINAL EQUITY:
The owner's original downpayment on a property.
ORIGINAL FACE VALUE:
The principal amount owed on a mortgage on the date of its negotiation as shown on the "face" of the agreement.
ORIGINAL PRINCIPAL BALANCE:
See "original face value".
OUTSTANDING BALANCE:
The amount of money (including principal and interest) owing at a given date on a loan or mortgage.
OWNER FINANCING:
See "mortgage back" or "vendor take-back mortgage".
OWNER OCCUPIED:
Any property where the owner resides in all or part of the property.
PARCEL:
Another word for a piece of land.
PARTIAL INTEREST:
Ownership of property that is less than 100% or on a lower level than fee simple.
PARTIALLY AMORTIZED MORTGAGE:
A very common form of mortgage in which the term is less than the amortization period such that, at the maturity date, the mortgage is not fully paid out and either refinancing or a large balloon payment is required.
PAYMENT CAP:
A term of some variable or adjustable rate mortgages in which the level to which the monthly payment may rise is limited to a certain dollar figure.
PAYMENT CHANGE DATE:
The date when the amount of each payment under an adjustable, variable or graduated payment mortgage changes.
PAYMENT INCREASE CAP:
A contractual limit on the amount of each periodic payment may rise at any one payment change date. Expressed as a percentage.
PAYMENT PENALTY:
Also known as "prepayment penalty" or "early payment penalty", the fee paid by a borrower when she pays out some or all of the principal of a loan at a time when such a payment is not allowed under the terms of the loan.
PENTHOUSE:
The dwelling(s) located at the top of a tall building, often luxurious.
POWER OF ATTORNEY:
A document, signed by the donor in front of witnesses, authorizing another person to act on the donor's behalf and to bind the donor to those actions.
POWER OF SALE:
Generally the fastest and cheapest mortgage enforcement method open to lenders. A common clause in a mortgage agreement which gives the lender the right to take over and sell the property to cure the borrower's default. The sale proceeds are allocated first to principal and interest, then to penalties, then to the lender's costs in exercising the power, then to other registered claimants and finally to the borrower if there is any left.
PRE-APPROVED MORTGAGE:
A commitment from a lender to provide a mortgage loan on stated terms to a borrower before the borrower has found a property to buy. The pre-approved mortgage allows the borrower to make a firm, cash offer on the property of choice.
PREFABRICATED:
Descriptive term for a building that is put together on site from components (walls, floors, roof, etc.) built off-site (in a factory, for example).
PRE-FORECLOSURE SALE:
The sale of a property by a delinquent borrower under an agreement with the lender. The sale may not produce enough proceeds to pay out the loan but the lender will save the costs of foreclosing and selling.
PREPAYMENT:
Payment of all or part of the principal of a mortgage or loan before it comes due.
PREPAYMENT PENALTY:
A fee charged to a borrower for paying out all or part of the principal of the mortgage or loan before it comes due.
PRE-QUALIFICATION:
The act of going through the mortgage application process before the borrower is ready to borrow, to establish how much money the borrower could obtain under a loan.
PRICE-LEVEL-ADJUSTED MORTGAGE:
An adjustable or variable payment loan which uses the rate of inflation as an index.
PRIME RATE:
The best rate charged on loans, usually saved for the best clients of the lenders. May also be set by a national institution as a benchmark or index for other lenders.
PRINCIPAL:
1. The amount of money borrowed or still owed on a loan, without including interest.
2. The person on whose behalf an agent acts.
PRINCIPAL AND INTEREST PAYMENT (P&I):
A blended, periodic payment that is enough to pay off accumulated interest and a portion of the principal.
PRINCIPAL BALANCE:
The outstanding amount owing on a mortgage without including accumulated interest.
PRIVATE MORTGAGE:
A mortgage contract in which the lender is not a registered financial institution but may be a friend, family member or individual investor.
PRIVATE MORTGAGE INSURANCE (PMI):
A policy of insurance issued by a non-governmental entity which protects a lender against the default of the borrower.
BATE OR PROVE:
Establishment of the validity of a will through a court process.
PROMISSORY NOTE:
A document signifying an indebtedness.
PROPERTY:
1. The rights of ownership in lands or goods.
2. Land.
PROPERTY TAX:
Also known as "realty tax", the tax levied on ownership of property.
PRORATE:
To apportion a divisible item among parties according to their share.
PURCHASE AGREEMENT:
See "agreement of sale" or "agreement of purchase and sale".
PURCHASER:
The person who buys a property.
PURCHASE PRICE:
The consideration paid for the purchase of a property as set out in the agreement.
