Occupancy Date

Date when you can move in to newly built property. Occupancy Date is set by the builder.

Ongoing Costs

Some lenders include a fee which you must pay every year, regardless of the mortgage balance. The fee varies, from lender to lender and is rare.

On-site Auction / On Site Auction

Property auction that takes place on the property being sold. For example, Ron is auctioning his house and the auction is going to take place in his house.

Offline Debit Card

Card that combines characteristics of a debit card and a credit card. With debit card you are required to enter password before making a purchase. Debit card takes money from your debit account. Credit card does not require you to enter password when making a purchase, but a signature. Credit card accesses credit account.

Offline Debit Card does not require password when making purchases, just a signature acting as a credit card, but it takes money from your debit bank account, acting a debit card. It is a hybrid between credit card and debit card. Offline debit cards are issued by banks, in addition to credit or debit cards.

Offer to Purchase

Offer to purchase property on sale.

Offshore Borrowers

Borrowers from other countries.

One-year Adjustable

Mortgage where interest rates change every year. Interest rates are based on an index such as the prime rate set by the Bank of Canada, LIBOR(London InterBank Exchange Rate) and others.

Online Banking

Access to banking information via internet. Online Banking is very convenient since people can make changes to their accounts, view balances and pay bills from the comforts of their homes.

Online Bill Payment

System that allows people to pay their bills via internet as opposed to mailing checks or going to a bank. To pay bills online, person needs an online banking account with his/her bank (most banks provide it today) and an internet connection.

Online Debit Card

Refers to majority of debit cards. Whenever you buy products, use ATM machines or do online banking - an online debit card deducts the amount from your bank account without any delays. As soon as you agree to buy, withdraw or transfer, online debit card accesses your bank account and deducts the amount in a matter of seconds.

Ontario Land Transfer Tax / Ontario Property Transfer Tax / Ontario LTT

Tax collected by provinces for change in property ownership rights. For example, Cathy sold her house to Monica. Monica must pay land transfer tax for the sale to go through.

Also known as Property Transfer Tax

To find out more about land transfer tax please read Land Transfer Tax Act of Ontario http://www.rev.gov.on.ca/english/taxes/ltt/

Open House

Sales approach used by sellers and realtors. Seller declares his property as “open house” meaning that anyone can come by and look at it. Potential buyers are more likely to buy, since they are not pushed by sales people and come to a decision on their own.

Open Listing

Property being sold by multiple real estate agents.

Open Mortgage

Mortgage that can be paid off early without any penalties.

Open-end Credit

Type of credit (usually credit line) where borrower can borrow up to a certain limit but does not have a set repayment date. For example, Ron has a credit line for $20.000. He can borrow any amount up to $20.000 and can pay it back any time he wants.

Open space

Open space is an undeveloped land which will be used by all residents. For example land for tennis courts, which will be used by all condo owners, or land for a recreational park, which will be used by all the residents living in a nearby area. 

Operating Expense

Expenses associated with running a business. This includes salaries, taxes, insurance, equipment, etc.

Operating Loan

Loan borrowed by businesses to cover day to day expenses. Operating Loan can be used to sponsor inventory, salaries, stock etc. Operating loan is a short term loan and must be repaid in short period of time.

Option

Option is a financial term. It means that an asset holder can do whatever he/she wants with an asset. Can: sell it(put), buy(call) and put other obligations on it, hence the terms – put option, call option, etc..

Option ARM / Pick a Payment ARM

An adjustable (variable) rate mortgage with monthly interest rate adjustments and low monthly payments in first years. Payments may go up with time.

Oral Agreement

Spoken agreement. Oral Agreement is legally binding, but is hard to prove in court.

Ordinary Dividends

Dividends: Distribution of earnings to shareholders. Whenever corporation makes X amount of profit, it must share it with the shareholders. A portion of the profit that goes to a single share holder is called dividend.

Ordinary Dividends: dividends that are taxed by the government.

Ordinary Income

Income earned by means of: salary, wages, commission, interest rates etc. Ordinary Income is fully taxable at highest possible rates.

Original Principal Balance

Total mortgage amount owed to the lender before any payments are made. For example, Ron borrowed $200.000 to buy his house. His original principal balance is $200.000

Origination Date

Date when the mortgage is due. For example, you borrowed a mortgage on Dec 1st 2005 for 25 year amortization period. Your origination date will be Dec 1st 2030.

Origination Fee / Origination Points / Point / Loan Discount Points / Points

Fee paid for processing loan application. Origination fee is represented in points. One point is equal to 1% of the total mortgage amount. Origination fee includes: appraisal, credit report, title expense, legal expenses, etc. It is charged on every mortgage.

Some lenders offer no fee mortgages, that carry the same fees but at the cost of higher interest rates or longer terms. You either pay originations fees upfront with regular mortgage or pay them over time with no-fee mortgages at the cost of higher interest rates.

Origination Process

Process of giving new loan to the borrower. It includes credit background check, appraisal, legal duties, etc.

Overage

The difference of borrowers’ end price for a mortgage and price presented to lenders and mortgage brokers. For example, Ron is getting a new mortgage for $200.000. Lenders may have the interest rates set to 4%, but sell it for 6%, making the overage of 2%. Brokers may also add fees, where the final mortgage price will be $203.000 with overage of $3000.

Over-the-limit Fee / Over the Limit Fee

Fee charged on credit cards for going over a set credit limit. For example, Ron has a credit limit of $20.000. He withdrew $20.500 going over the limit by $500. He will be charged Over-the-limit Fee. This fee differs with different banks.

Overdraft

Trying to get more money than available on the account. For example, you try to buy a car for $20.000, while you only have $15.000 on the account. If you write a cheque, the bank will indicate overdraft and will block the transaction. Overdraft is also referred to as “insufficient funds”.

Overdraft Annual Cost

Fee charged by banks for Overdraft. People may decide to have an overdraft feature on their account. Whenever overdraft occurs, bank lets it go through charging a one time overdraft fee, plus an annual overdraft cost.

Overdraft: Trying to get more money than available on the account. For example, you try to buy a car for $20.000, while you only have $15.000 on the account. If you write a cheque, the bank will indicate overdraft and will block the transaction. Overdraft is also referred to as “insufficient funds”.

Overdraft Protection

Overdraft: Trying to get more money than available on the account. For example, you try to buy a car for $20.000, while you only have $15.000 on the account. If you write a cheque, the bank will indicate overdraft and will block the transaction. Overdraft is also referred to as “insufficient funds”.

Overdraft Protection: feature that protects account holders from overdraft. Whenever there are insufficient funds on the account, overdraft protection will access other accounts (savings, credit) and get additional funds from there.

Overhang

Portion of a building structure that extends over exterior walls.

Overpayment

Money paid to the creditor that exceed the amount owed. For example, you owe $500 on your credit card, but pay back $600. Since it is a $100 overpayment, your creditor is bound to return the overpayment.

Owner Financing

Real estate purchase where owner of the property provides buyer with portion of money to buy the property. This is done between relatives, friends and businesses.

Owner Occupant

Owner of the property who lives on that property.

Owner's Title Policy / Mortgagor's Title Insurance

Insurance that protects the owner from losing ownership of his property. For example, Ron owns a house. Julie may come in later claiming that her parents used to own that house and that she has rights to it. Insurance title will represent Ron’s interests in court and in case he loses, will pay him a sum of money for losing his property. That sum can be market value of his house or less, depending on insurance title contract.