Oblige:  The person to whom payments are owed according to the terms of a note.

Obligor:  The person obligated to make the payments on a note.

Offset Statement:  A written statement by a lender or borrower concerning the current status of a loan.  It includes the current principal balance, whether payments are current or not, and terms and conditions of the loan.

Option:  The right to buy something for a stated price and terms within a certain time period.  Something must be paid for this right.  This is called option consideration.  The option will either be exercised (used) or abandoned (not used).

Optionee:  The person who has the right to buy under an option.

Optionor:  The person who has agreed to sell property under an option.

Original Principal Balance:  The principal owed on a note the day it started.  This is contrasted to the current principal balance, which may be different.

Origination:  The creation of something, in this case a note and security instrument.

“Or More” Clause:  A clause in a note stating that the monthly payments are to be so many dollars “Or More”.  This eliminates any kind of prepayment penalty.

Or Order:  A clause in a note, such as “Pay to Joe Jones or order.”  The “or order” would be an assignee or future owner of the note.

Overall Rate (OAR):  See Blended Rates.

Owner:  The person having title to something such as property or a note.

Owner Financing:  When the seller of a property takes a note secured by the property as part of the payment.

Paper:  In our usage, a promissory note secured by real estate.

Partial Amortization:  Loan payments that cover principal and interest for a certain period of time, but then the remaining balance is due in a balloon payment at the stop date.

Pause:  In running a program, the calculator will pause at certain points so you can write down the answer before it resumes processing.

Payee:  The person to whom payments are due on a note.

Payment:  The amount of money paid in each installment on a note.

Payment Book:  See Note Payment Book.

Payment Schedule:  The specifics of how much each payment is and when each payment is due.

Payor:  The person obligated to make the payments on a note.  It is also the mortgagor with a mortgage contract or a trustor with a trust deed.

Percentage:  A fraction expressed in one-hundredths.  This is used for interest rates, for example 0.09 is 9%.  9% simple interest on $100,000 is $9,000 per year.

Personal Note:  An unsecured note.  The maker has personal liability on a personal note.

PITI:  Principal, Interest, Taxes and Insurance.  On an amortized loan that has an impound or escrow account for taxes and insurance, the montlhyly payment consists of Principal, Interest, Taxes and Insurance (PITI).

PMT:  The payment on a loan.

Points:  A point is 1% of the principal.  See also Discount Points.

Positive Cash Flow:  Cash coming in, inflow of money.

Prepayment:  Paying on a loan before the payment is due, especially paying the loan off in full before its due date.

Present Value(PV):  Money has a time value.  Money now is worth more than money later.  The worth of a future amount of money is less than having that same amount of money now.  Example:  You might only be willing to pay $2, 500 now in order to receive $10,000 payable in 10 years.  The Present Value of that $10,000 is $2,500 in your mind.

Principal:  The amount of money loaned out or carried back on property sale.  The principal amount of the note is at first equal to the face amount.  It then may vary according to how payments are made.

Principal Balance:  The remaining amount of principal due on a note as of a certain date. This may be more or less than the original face amount of the note.  See also Amortization, Negative Amortization, and Interest Only.

Private Party:  The normal “guy next door” that sold his property and carried back paper to make the sale.  Not a loan broker or  real estate agent dealing in notes for profit.

Private Party Financing:  See Seller Carry-Back Financing.

Program:  As a noun it means the detailed instructions given to a computer or calculator telling it what steps to do and in what order to do them.  As a verb it means to tell the calculator what steps to do.

Promissory Note:  A legal written promise to pay a certain amount according to its terms and conditions.  See also Secured Loan, Unsecured Loan.

Property Owner:  The person who owns the property that is the security for a note.  The property owner is the one who owes and pays on the note.

Proposed Financing:  How we intend to have the financing look after we are done with our current transaction.  See also Existing Financing.

Protective Equity:  The excess “equity cushion” left over after subtracting the loan we are considering and any senior loans from the property value.  Example:  A $100,000 property with $65,000 in loans against it would have a $35,000 protective equity over and above the loans.

Purchase Money:  Money that is loaned for the purchase of real property.  This can be in the form of seller carry back financing or a new bank loan.  It is contrasted to Refinance Money  Hard Money.  In certain cases it may carry no personal liability and may not be subject to deficiency judgments.

PV:  Present Value or current principal balance on a loan.  Present value can be the worth of a stream of future payments discounted to today’s dollars or to an amount of money today.