Amortization
The number of years it takes to repay a mortgage in full.
Appraised Value
An estimate of the market value of the property used as security for the mortgage.
Blended Mortgage Payment
The mortgage payment consisting of both principal and interest in which part is applied toward the accumulated interest and the remainder is applied toward the principal.
Bridge Financing
A loan required to provide the funds needed for the closing of the property you have purchased to the time of the later closing of the property you have sold.
CMHC
The Canada Mortgage and Housing Corporation is a federal crown corporation providing housing programs that allows lenders to loan up to 95% of property value.
Closed Mortgage
A mortgage that cannot be prepaid over and above the stated prepayment privileges without a penalty fee.
Closing Date
The date the purchase of the property becomes final and you, the new owner, obtain title.
Conventional Mortgage
A first mortgage of up to 75% of the property's value.
Deed
A legal document that transfers ownership of the property to the buyer .
Deposit
The amount of money deposited with the listing realtor as good faith to carry through with the offer to purchase and is applied toward the down payment.
Down payment
The difference of money between the purchase price and the mortgage.
Equity
The difference between the current value of a property and the outstanding mortgage amount at any time.
First Mortgage
A mortgage which is registered first in priority against the property.
Fixed Rate Mortgage
The rate of interest that is fixed for the term.
Gross Debt Service Ratio
The total amount of the mortgage payments (principal and interest), heating costs and property taxes (and condominium fees when applicable) divided by the total gross income.
High Ratio Mortgage
A mortgage for more than 75% of the property value. The down payment is less than 25% of the property value.
Maturity Date
The expiry date of the term of the mortgage. The interest rate is in effect until this time.
Mortgage Payment
The regular principal and interest payments made to repay the mortgage .
Mortgagee
The lender.
Mortgagor
The borrower.
Open Mortgage
A mortgage that can be prepaid or renegotiated at any time without penalty .
Pre-Approval
A mortgage approval for a pre-determined amount and interest rate arranged prior to the borrower's purchasing a property. A pre-approval will determine the borrower's purchasing power and hold the interest rate for up to 120 days.
Prepayment Options
The amount that allows the borrower to prepay a portion of the original mortgage amount every year and increase payments, without penalty.
Principal
The mortgage balance outstanding at any time.
Second Mortgage
A mortgage registered second in priority against the property.
Security
The property being purchased or refinanced forms the security for the mortgage.
Term
The time the interest rate is in effect. The rate is due for renegotiation at the end of this period. Typical terms vary from 6 months to 10 years.
Total Debt Service Ratio
The total amount of the mortgage payments (principal and interest), heating costs and property taxes (and condominium fees when applicable) plus all other contractual debts of the borrower divided by the total gross income.
Variable Rate Mortgage
The rate of interest will fluctuate in accordance with a bank trend setting rate. This is typically the bank prime rate. Adjusted on a predetermined basis, usually monthly, the rate can be set below, equal to or above the trend setting rate and will move up and down accordingly with that rate.
Vendor
The seller in a real estate transaction.
