FHA Loan and Mortgage Glossary - Terms Beginning with 'O'
- Offer: This is when a buyer shows their interest in purchasing a home by negotiating a price for the home and putting it in writing. When an offer is made the buyer usually offers a small down payment or earnest money in order to hold the home.
- Origination: This is the process that is undertaken by the mortgage lender where they prepare a loan application to be processed and evaluated for consideration of funding and includes an appraisal of the property to be purchased, a credit history and score check of the potential borrower, and income verification.
- Origination Fee: Also called a loan origination fee. This is the cost that a lender charges a borrower to do the paperwork for their loan.
- Owner Financing: This is when the current owner of the property finances it for the buyer. This usually occurs when the buyer can't get a mortgage loan due to credit issues and the seller allows the buyer time to fix these issues and get a loan in the future while still purchasing the home. Sellers may also want to do this because it can be a good investment. Buyers who have credit issues but high stable income may be willing to pay a much larger interest rate than a seller can get in the investment market.