- 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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