- Amortization
Period: The number of years that it will take you to pay back your
entire mortgage loan
- Appraised Value:
An estimated value of a property that is completed by a certified appraiser
for mortgage financing
- Assumability:
When the buyer is allowed to take over (or assume) the seller's mortgage,
which is already in place on the property
- Balanced Market:
Where demand for property equals the supply of available property. Sellers
usually accept reasonable offers and houses generally sell in sufficient
time periods. Prices remain stable and there is usually a good number
of homes to choose from
- Buyer's Market:
There is a high number of homes to choose from and few buyers in comparison.
Prices of homes tend to be lower and they remain available for sale
longer. Buyers usually have more leverage in negotiating a purchase
- Closed Mortgage:
A mortgage loan that has a locked-in payment schedule, which does not
vary over the life of the closed term. A buyer who uses a closed mortgage
will likely have to pay the lender a penalty if you fully repay the
loan before the end of the closed term
- Conditions:
Items that are usually put in place to protect a party's interests upon
selling or buying the property and refer to things that must occur or
be in place before the sale closes.
- Conventional
Mortgage: A mortgage loan that is issued for up to 75% of the property's
appraised value, or the property's purchase price, whichever is lower.
The buyer must have 25% or more of the lower value as a down payment
- Conveyancing:
The transfer of ownership of any property or real estate from one person
to another
- Down Payment:
This is the difference between the purchase price and the total amount
of the mortgage loan, which represents the buyer's cash payment towards
the purchase of a property
- Deposit:
A deposit is usually given from the buyer to the seller as a token of
the buyer's assurance and intention to buy the property involved. The
deposit is applied against the purchase price of the home once the sale
has closed. Len can assist you in proposing a certain and appropriate
amount for the deposit.
- Equity:
The difference between a property's market value for selling and the
mortgage plus other debts taken against the property
- High-Ratio Mortgage:
When a mortgage loan exceeds 75% of the home's appraised value. These
types of loans are typically used by first time buyers and must be insured
for payment
- Inclusions and
Exclusions: These are specifications within the offer that detail
the items to be included or excluded from the purchase of the property.
Typical inclusions are appliances, window coverings, fixtures and decorative
pieces.
- Interest Rate:
A figure expressed as a percentage as the value that is charged by the
lender for use of the lender's money
- Maturity Date:
The end of the term of your mortgage loan. At this time, the buyer can
pay off the entire mortgage loan balance or renew it for a longer term
- Mortgagee:
The individual or financial institution that lends the money for the
purpose of a mortgage on property
- Mortgage Insurance:
Insurance purchased to protect the lender against loss from the borrower
being unable to make payments on the mortgage loan
- Mortgage Life
Insurance: Insurance purchased to protect the mortgagor from the
mortgage loan debt if the mortgagee dies. If he/she dies, the mortgage
loan is paid off by the insurance company
- Mortgagor:
The person who borrows from a financial institution to finance a property
or home purchase
- Open Mortgage:
A type of mortgage loan where the borrower can make a partial or full
payment of the principal amount at any time, without penalty
- Portability:
An option available on a mortgage that enables the mortgagor to take
their current mortgage loan with them to another property without penalty
- Possession or
Closing Date: This is usually the date that the legal ownership
of the property transfers from the seller to the buyer and, unless otherwise
noted, when the funds for the purchase are concluded.
- Pre-Approved
Mortgage: When a lender approves the potential mortgagor for a specified
amount, based on how much money the lender is prepared to lend to the
borrower. This allows buyers to shop for homes that they already know
they can obtain financing for and not homes that are potentially too
expensive, or out of the borrowers means to finance
- Prepayment Privileges:
Allows the borrower to make voluntary payments on the mortgage loan,
in addition to the regular, scheduled mortgage payments
- Property Purchase
or Land Transfer Tax: A toll paid to the provincial and/or municipal
government(s) for transferring property to the buyer from the seller
- Principal:
The amount still owing to the lender or the amount borrowed from the
lender, excluding interest. Interest is applied and payable based on
the principal amount outstanding
- Purchase Price:
This is the amount that the buyer is offering to pay for the property.
The price is usually dependent on market conditions and may differ from
the seller's current asking price.
- Refinancing:
Re-negotiating the current terms of a mortgage loan or paying off the
current mortgage loan and obtaining a new one
- Renewal:
At the end of a mortgage term, the borrower re-negotiates the loan for
a new term
- Second Mortgage:
A type of additional financing on top of your existing mortgage. This
second mortgage usually is applied at a higher rate of interest and
is negotiated for a shorter term
- Seller's Market:
More buyers are looking for homes than there are homes for sale. There
is a smaller inventory of homes available for sale and many buyers looking
to purchase. House prices generally increase and homes sell quickly
- Strata or Condominium
Fee: A payment made by all owners of condominiums or townhouses
within a particular complex that is allocated to pay expenses such as
maintenance, repairs and management costs
- Term: The
total length of time that the interest rate on a loan is fixed, which
also indicates when the principal balance becomes due and is thus payable
to the mortgagee
- Terms: An
offer includes certain "terms", which specify the total price offered
and how the financing will be arranged, such as if you will arrange
your own with a financial institution or mortgage broker or if you wish
to take over the seller's mortgage (assumability).
- Title: The
legal ownership of a property/home
- Variable-rate
Mortgage: A type of mortgage with fixed payments but fluctuating
interest rates. The change in current interest rates doesn't alter the
amount of the mortgage payment, but determines how much of each payment
is applied against the principal amount and how much goes to pay interest
to the lender
- Vender Take-Back
Mortgage: A situation where the seller of a property provides all
or part of the mortgage financing in order to sell their property
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