General Financial Glossary - Financial Terms M - P

Negative Amortization - When monthly payments are not enough to cover the interest due each month therefore the loan balance increases.

Notice of Default - Written notice to a borrower that a default of the contract has occured and that legal action may be taken.

Origination Fee - Fee for processing a loan application; generally stated as a percentage of the mortgage amount or points.

PITI - Principal, interest, taxes and insurance.

Points - Generally used on mortgages. One time charge by the lender in order to increase the yield of the loan, one point is one percent of the amount of the loan.

Prepayment Penalty - The borrower is charged a fee for paying off a loan before it is due.

Principal - Remaining unpaid balance of a loan.

Purchase Agreement - A contract between the borrower and the lender that discloses the terms and conditions under which a property will be sold.

Finance Terms A - D
Finance Terms E - H
Finance Terms I - L
Finance Terms Q - T
Finance Terms U - Z

General Financial Glossary - Financial Terms M - P

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