The number of years it takes to repay the entire amount of a mortgage.
An estimate of a property's market value, used by lenders in determining the amount of the mortgage.
The increase of a property's value over time.
A lending institution authorized by the Government of Canada to make loans under the terms of the National Housing Act. Only Approved Lenders can negotiate mortgages that require mortgage insurance.
The value of a property, set by the local municipality, for the purposes of calculating property tax.
A mortgage held on a property by the seller that can be taken over by the buyer, who then accepts responsibility for making the mortgage payments.
A legal document signed by a homebuyer which requires the buyer to assume responsibility for the obligations of a mortgage by the builder or original owner.
A combination of two mortgages, one with a higher interest rate than the other,
BLENDED MORTGAGE PAYMENTS
Equal or regular mortgage payments, consisting of both a principal and an interest component. With each successive payment, the amount applied to interest decreases and the amount applied to the principal increases,
although the total payment doesn't change. (Exception: see Variable-Rate Mortgages)
When the seller reduces the interest rate on a mortgage by paying the difference between the reduced rate and market rate directly to the lender, or to the purchaser, in one lump sum or monthly instalments.
A mortgage that cannot be prepaid, re-negotiated or refinanced during its term.
The real estate transaction's completion, when the parties involved agree that all legal and financial obligations have been met, and the deed to the property is transferred from the seller to the buyer.
Expenses in addition to the purchase price for buying and selling a property. such as legal fees, transfer fees, and disbursements, which are payable on the closing date. Closing costs typically range from 2%-4% of a home's selling price.
The date on which the title and keys to the property are transferred from the seller to the buyer, and the money is paid.
CMHC Canada Mortgage and Housing Corporation.
A Crown corporation that administers the National Housing Act for the federal government and encourages the improvement of housing and living conditions for all Canadians. CMHC also creates and sells mortgage loan insurance products.
The portions of a condominium development owned in common (shared) by the unit owners.
Shared ownership in property. Owners have title (ownership) to individual units and a proportionate share in the common elements.
A first mortgage issued for up to 75% of the property's appraised value or purchase price, whichever is lower.
In law, conveyancing is the transfer of legal title of property from one person to another, or the granting of an encumbrance such as a mortgage or a lien.
One party's written response to the other party's offer during negotiation of a real estate purchase between buyer and seller.
DEBT SERVICE RATIO
The percentage of a borrower's gross income that can be used for housing costs, including mortgage payment and taxes. (and condominium fees, when applicable)
The part of the purchase price of a property that the buyer pays in cash and does not finance with a mortgage.
A legal right to use or cross (right-of-way) another person's land for limited purposes. A common example is a utility company's right to run wires or lay pipe across a property.
An intrusion onto an adjoining property. A neighbour's fence, storage shed, or overhanging roof line that partially (or even fully) intrude onto your property are examples of encroachments.
A homeowner's financial interest in a property. The difference between the value of the property and the amount owing (if any) on the mortgage.
A written statement of a condominium unit's current financial and legal status.
The first security registered on a property. Additional mortgages secured against the property are "secondary" to the first mortgage.
A legal process by which the lender takes possession and ownership of a property when the borrower doesn't meet ("defaults on") the mortgage obligations.
A mortgage for more than 75% of a property's appraised value or purchase price.
The cost of borrowing money.
A form of ownership in which two or more individuals (often spouses) have an equal share in the ownership of a property. In the event of one owner's death, his or her share is automatically transferred to the surviving owner(s), apart from the deceased's will.
Controlling a large asset with a relatively small amount of cash. In real estate, $25,000 down payment (or less) can be used to purchase (control) a $100,000 home, for example.
Any legal claim against a property, filed to ensure payment of a debt.
The contract between the listing broker and an owner, authorizing the REALTOR® to facilitate the sale or lease of a property.
The REALTOR® who signs a contract with an owner to sell the property.
A monthly fee paid by condominium owners for maintaining the development's common areas.
A contract between a borrower and a lender. The borrower pledges a property as security to guarantee repayment of the mortgage debt.
A licensed individual who, for a fee, brings together a borrower in search of a mortgage and a lender willing to issue that mortgage.
Government-backed or privately-backed insurance protecting the lender against the borrower's default on high-ratio (and other types of) mortgages.
MORTGAGE LIFE INSURANCE
Insurance that pays off the mortgage debt, should the insured borrower die.
The regular instalments made towards paying back the principal and interest on a mortgage.
The length of time a lender will loan mortgage funds to a borrower. Most mortgage terms run from six months to five years, after which the borrower can either repay the balance (remaining principal) of the mortgage,
or re-negotiate the mortgage for another term.
MULTIPLE LISTING SERVICE® (MLS®)
A system for relaying information to REALTORS® about properties for sale.
A mortgage which can be prepaid or re-negotiated at any time and in any amount without penalty.
PARTIALLY OPEN MORTGAGE
(Also called a "partially closed" mortgage.) Allows the borrower to prepay a specific portion of the mortgage principal at certain times with or without penalty.
A mortgage feature that allows borrowers to take their mortgage with them without penalty, when they sell their present home and buy another one.
A mortgage feature that allows the borrower to prepay a portion or all of the principal balance with or without penalty. This privilege is frequently restricted to specific amounts and times.
The mortgage amount initially borrowed, or the portion still owing on the mortgage. Interest is calculated on the principal amount.
The return the lender receives for advancing the mortgage funds required by the borrower to purchase a property.
Real Estate Professionals who are members of a local real estate board and the Canadian Real Estate Association. Only these professionals can call themselves REALTORS®.
The process of obtaining a new mortgage, usually at a lower interest rate, to replace the existing mortgage.
The portion of a condominium maintenance fee that is set aside to cover major repair and replacement costs.
A second financing arrangement, in addition to the first mortgage, also secured by the property. Second mortgages are usually issued at a higher interest rate and for a shorter term than the first mortgage.
Second, third, fourth, etc. mortgages, secured by a property "behind" the first mortgage.
See Vendor-Take-Back Mortgage
See Mortgage Term
The legal evidence of ownership of a property.
A detailed examination of the ownership documents to ensure there are no liens or other encumbrances on the property, and no questions regarding the seller's ownership claim.
Term used to describe the individual home or apartment held by the owner within a condominium development.
A mortgage for which payments are fixed, but whose interest rate changes in relationship to fluctuating market interest rates. If market rates go up, a larger portion of the payment goes to interest. If rates go down, a large portion of the payment is applied to the principal.
When sellers use their equity in a property to provide some or all of the mortgage financing in order to sell the property.
Mortgage payments made weekly or 52 times per year.
Strict guidelines set and enforced by municipal governments regulating how a property may or may not be used.