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
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
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
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
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
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
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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