Real Estate Terms / Real Estate Dictionary
A fee charged for the work involved in the evaluation, preparation and submission of a proposed mortgage loan. The origination fee is stated in the form of points. One point is 1 percent of the mortgage amount.
People's Money, OPM
Financing (aka "carrying a note" or "seller financing")
The owner can charge the buyer interest on the money being lent. The owner will collect interest and a monthly mortgage payment on the property he or she has sold, in effect increasing the owner's overall sales price of the property.
In order to protect themselves, some homeowners may require the buyer to make their monthly payments into an escrow account held by a bank, and require the borrower to place a Quit Claim Deed into the escrow account with instructions that if a payment is late by a certain number of days then the escrow officer will automatically file the Quit Claim Deed, which will restore ownership to the former owner instantly.
If this were to happen, the buyer would not only lose title to the property but would also lose any and all payments made on the property. This is a powerful incentive for the buyer to make all payments in a timely manner.
Some reasons for a Seller not to do "Owner Financing":
The definitions of Real Estate
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