REAL ESTATE TERMS AND DEFINITIONS
The actual number of years it will take to pay back your mortgage loan.
An estimate of the value of the property and not always the Purchase Price. Conducted for the purpose of mortgage lending by a certified appraiser. This appraisal is not to be confused with a building inspection.
Allows the buyer to take over the seller’s mortgage on the property.
A mortgage that locks you into a specific payment schedule. A penalty usually applies if you repay the loan in full before the end of a closed term.
The owner has title to a single unit, as well as a share in the common elements such as elevators or surrounding land.
A monthly common payment among owners which is allocated to pay expenses.
A mortgage loan issued for up to 75% of the property’s appraised value or purchase price, whichever is less.
The buyer’s cash payment toward the property. The difference between the purchase price and the amount of the mortgage loan.
The difference between the home’s selling value and the debts against it.
A mortgage that exceeds 75% of the home’s appraised value. These mortgages must be insured for payment.
The value charged by the lender for the use of the lender’s money. Expressed as a percentage.
Land Transfer Tax
A fee paid to the government for the transferring of property from seller to buyer.
The end of the term, at which time you can pay off the mortgage or renew it.
The person or financial institution that lends the money.
The borrower of the money.
Applies to high-ratio mortgages. It protects the lender against loss if the borrower is unable to repay the mortgage.
Mortgage Life Insurance
Pays off the mortgage if the borrower dies.
Allows partial or full payment of the principal at any time, without penalty.
A mortgage option that enables borrowers to take their current mortgage with them to another property, without penalty. A transfer fee may apply.
Qualifies you for a mortgage before you start shopping. You know exactly how much you can spend and are free to make a “firm” offer when you find the right home.
Voluntary payments in addition to regular mortgage payments.
The amount borrowed or still owing on a mortgage loan. Interest is paid on the principal amount.
Paying off the existing mortgage and arranging a new one or re-negotiating the terms and conditions of an existing mortgage.
Re-negotiation of a mortgage loan at the end of a term for a new term. Second Mortgage
Additional financing. Usually has a shorter term and higher interest rate than the first mortgage.
The length of time the interest rate is fixed. It also indicates when the principal balance becomes due and payable to the lender.
Legal ownership in a property.
A mortgage with fixed payments, but fluctuates with interest rates. The changing interest rate determines how much of the payment goes towards the principal.
Vendor Take-Back Mortgage
When the seller provides some or all of the mortgage financing in order to sell their property.