Real Estate Glossary – O

Obligee – The person in whose favor an obligation is made.

Obligor – The person who binds themselves to another.

Option – The right, but not obligation, to purchase or lease a property upon specific terms within a specific time period.

Ordinances – The rules by municipalities governing the use of land.

Original Principal Balance – The total amount of principal owed on a mortgage before any payments are made.

Origination Fee – A fee paid to either a lender or a broker for originating a loan. It may be the sole compensation for their work in arranging and/or processing the loan, or it may only be a portion of the compensation. Some loans do not have an origination fee.

Originator – An individual that works with a borrower to start a loan. Typically the employee of a financial institution, the employee of a broker or an independent contractor affiliated with multiple brokers, the originator determines the type of loan a borrower most-likely qualifies for, helps the buyer complete an accurate application, gathers the documents necessary to get an approval and acts as an intermediary between the borrower and the underwriter.

Origination Fee – A fee paid to a lender for processing a loan application. The origination fee is stated in the form of points. One point is 1 percent of the mortgage amount.

Owner Financing – A property purchase transaction in which the property seller provides all or part of the financing.