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Negative Amortization :
Occurs when your 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. The danger of negative amortization is that the homebuyer ends up owing more than the original amount of the loan.
Net Effective Income :
The gross income of the borrower, minus the percentage removed for federal and/or state income tax.
Open-End Credit :
A line of credit that may be used over and over again, including credit cards, overdraft credit accounts, and home equity lines.
Open-End Lease :
A lease which may involve a balloon payment based on the value of the property when it is returned.
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 face value of the loan.
Overdraft Checking :
A line of credit that allows you to write checks or draw funds by means of an EFT card for more than your actual balance, with an interest charge on the overdraft.
Pink Slip :
A vehicle's title certificate.
PITI :
CPrincipal, interest, taxes, and insurance. Also called monthly housing expense.
Plat :
A map or chart of a lot, subdivision or community drawn by a surveyor showing boundary lines, buildings, improvements on the land, and easements.
Power of Attorney :
A legal document authorizing one person to act on behalf of another.
Prepaids :
Expenses necessary to create an escrow account or to adjust the seller's existing escrow account. Can include taxes, hazard insurance, private mortgage insurance and special assessments.
Prepayment :
A privilege in a mortgage permitting the borrower to make payments in advance of their due date.
Point-of-Sale (POS) :
The physical location at which a purchase is made by the consumer. Additionally, a method a taking electronic payment from a consumer without the need for a traditional check.
Prepayment Penalty :
A bank imposed fee for early payment of a loan. This penalty is meant to protect the bank from lost income not generated from interest on the loan.
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