glossary

GLOSSARY

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Options

Features that are added to the car by the dealer. These can be valuable options like a CD player, or add-ons that add no value to the car but add cash to the dealers pocket like undercoating and paint sealant.

Oral agreement

An oral agreement is a binding promise or arrangement made without written documentation. From a legal perspective, an oral agreement is difficult to prove. They're also invalid in real estate transactions.

Ordinary annuity

An ordinary annuity is a series of recurring, fixed payments that continue over a specified amount of time.

Ordinary dividends

Ordinary dividends are profit distributions made by a company to its shareholders. The recipient of ordinary dividends must pay taxes on the amounts received.

Ordinary income

Ordinary income is a tax term that describes any income earned other than capital gains. Examples of ordinary income include wages, tips, interest income, and dividend payments.

Ordinary interest

Ordinary interest, also called simple interest, is calculated under the assumption that a year has 360 days.

Ordinary shares

Ordinary shares represent non-preferred ownership rights in a corporation. The owner of an ordinary share, called a shareholder, has voting rights and is entitled to dividends, but only after dividends are paid to the preferred shareholders. If the company is liquidated, ordinary shareholders don't receive proceeds until after bondholders and preferred shareholders have been paid.

Original principal balance

The amount of the original amount of money borrowed.

Origination

Origination is the series of steps that leads to the funding of a mortgage loan. These steps include application, verification, loan approval, loan preparation, etc.

Origination fee

A purpose loan is a debt instrument that's collateralized by security holdings and used to finance the purchase of additional security positions. Purpose loans are subject to Federal Reserve Board restrictions and margin requirements.

Origination points

Origination points describe an upfront fee that a borrower pays to a mortgage lender for its role in preparing the loan for funding. Each origination point is equivalent to 1 percent of the loan amount. Origination points are set by the lender, usually based on the borrower's qualifications, and can sometimes be negotiated.

OTS

OTS, or Office of Thrift Supervision, is a U.S. federal entity that charters and oversees savings and loan banks. The OTS conducts audits and other inspections to ensure that its member banks are in compliance with government regulations.

Outpatient

Outpatient is a person receiving healthcare services that doesn't require an overnight stay.

Outstanding

Outstanding describes something that's unsettled. In lending, specifically, the term means unpaid, as in a debt balance.

Over-the-limit fee

Over-the-limit fee is an assessment charged by a credit card company when a credit card holder exceeds his approved credit limit.