A B C D E F G I L M N O P R S T Z

Amortization
The period of time required to reduce a debt to zero when payments are made regularly.

Appraisal
A process for estimating the market value of a particular property.

Assumption Agreement
A legal document signed by a home buyer that requires the buyer to assume responsibility for the obligations of a mortgage by the builder or original owner.

Blended Payment
A mortgage payment that includes principal and interest. It is paid regularly during the term of the mortgage. The payment total remains the same, although the principal portion increases over time and the interest portion decreases.

Closed Mortgage
A mortgage that cannot be prepaid, re-negotiated or refinanced prior to the expiry of the term, except with compensation or breakage costs.

Closing Costs
Costs, in addition to the purchase price of the home, such as legal fees, transfer fees and disbursements, that are payable on the closing date.

Closing Date
The date on which the sale of a property becomes final and the new owner takes possession.

Top of Page

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.

Conditional Offer
An offer to Purchase that is subject to specified conditions.

Conventional Mortgage
A mortgage loan up to a maximum of 75% of the lending to the borrower that approves the advancement of a specified amount of mortgage funds under specified conditions.

Deed
A legal document which is signed by both the vendor and purchaser, transferring ownership. This document is registered as evidence of ownership.

Default
Failure to abide by the terms of a mortgage loan agreement A Failure to make mortgage payments (defaulting on the loan) may give cause to the mortgage holder to take legal action to possess (foreclose) the mortgaged property.

Deposit
Money Place in trust by the purchaser when an Offer to Purchase is made. The sum held by the real estate representative or lawyer until the sale is closed and then paid to the vendor.

Discharge of Mortgage
A document signed by the lender and given to the borrower when a mortgage loan has been repaid in full.

Down Payment
The portion of the house price the buyer must pay up front from personal resources, before securing a mortgage. It generally ranges from 5%-25% of the purchase price.

Top of Page

Easement
A right acquired for access to or over, or for use of, another person's land for a specific purpose, such as a driveway or public utilities.

Equity
The difference between the price for which a home could be sold and the total debts registered against it. Equity usually increases as the outstanding principal of the mortgage is reduced through regular payments. Market values and improvements to the property also affect equity.

Foreclosure
A legal procedure in which the lender gets ownership of the property if the borrower defaults on the mortgage loan.

Gross Debt Service Ratio (GDS)
The percentage of the borrower's gross monthly income that will be used for monthly payments of principle, interest, taxes, heating costs and half of any condominium maintenance fees.

Interest
The cost of borrowing money. Interest is usually paid to the lender in installments along with repayment of the principle loan amount.

Lending Value
The purchase price or market value of a property, whichever is less.

Lien (Mechanic's)
A claim against a property for money owing. A lien may be filed by a supplier or a subcontractor who has provided labium or materials but had not been paid. A lien must be properly filed by a claimant. It has a limited life, prescribed by statute that varies. If the leinholder takes action within the prescribed period of time, the homeowner may be obliged to pay the amount claimed by the lienholder.
Alternatively, the leinholder may force a sale of the property to pay off the debt.

Top of Page

Maturity Date
The last day of the term of the mortgage agreement. On this day the mortgage loan must be either paid in full or the agreement renewed.

Mortgage
A Mortgage is security for a loan on the property that you own. It is your personal guarantee to repay the loan as well as a pledge of the property as security for the loan.

Mortgage Loan Insurance
If you have a high-ratio mortgage (more than 75% of the purchase price), your lender will require mortgage loan insurance - available from CHMC or a private insurer.

Mortgage Payment
A regularly scheduled payment that is blended to include both principle and interest.

Mortgagee
The lender who provides the mortgage loan.

Mortgagor
The borrower who pledges the property as security for the loan.

Net Worth
Your total financial worth, calculated by subtracting your total liabilities from your total assets.

Top of Page

Offer to Purchase
A written contract setting out the terms under which the buyer agrees to buy. If accepted by the seller, it forms a legally binding contract subject to the terms and conditions stated in the document.

Option Agreement
A document stipulating that, in exchange for a deposit, a specified individual is to be given the first chance of buying a property at or within a specified period of time. An option holder who does not buy at or within the specified period loses the deposit and the agreement is canceled.

P.I.T
Principal, interest and taxes - payments due on a regular basis under the terms of the mortgage agreement.

Principal
The amount of money actually borrowed.

Realtor
A real estate representative who is a member of an organization of persons engaged in the business of buying and selling real estate, such as the Canadian Real Estate Association.

Refinance
To pay off a mortgage or other registered encumbrance and arrange for a new mortgage sometimes with a different lender.

Statement of Adjustment
A balance sheet statement that indicates credits to the vendor, such as the purchase price and any prepaid taxes, and credits to the buyer, such as the deposit and the balance due on closing.

Top of Page

Survey
A document that illustrates the property boundaries and measurements, specifies the location of the buildings on the property, and indicates any easements or encroachment.

Term
The length of time during which a mortgagor pays a specific interest rate on the mortgage loan.
The entire mortgage principal is usually not paid off at the term because the amortization period is normally longer than the term.

Title
A freehold title gives the holder full and exclusive ownership of land and buildings for an indefinite period of time. In condominium ownership, land and common elements of the buildings are owned collectively by all unit owners, while the residential units belong exclusively to the individual owners.
A leasehold title gives the holder the right to use and occupy land and buildings for a defined period of time

Total Debt Service Ratio (TDS)
The percentage of gross monthly income required to cover all monthly payments for housing and all other debts, such as car payments

Zoning Bylaws
Municipal or regional laws that specify or restrict land use.

Top of Page