Resources

Amortization Period:
The actual number of years it will take to pay back your mortgage loan.

Appraised Value:
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.

Assumability:
Allows the buyer to take over the seller's mortgage on the property.

Closed Mortgage:
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.

Condominium:
The owner has title to a single unit, as well as a share in the common elements such as elevators or surrounding land.

Condominium Fee:
A monthly common payment among owners which is allocated to pay expenses.

Conventional Mortgage:
A mortgage loan issued for up to 75% of the property's appraised value or purchase price, whichever is less.

Down Payment:
The buyer's cash payment toward the property. The difference between the purchase price and the amount of the mortgage loan.

Equity:
The difference between the home's selling value and the debts against it.

High-Ratio Mortgage:
A mortgage that exceeds 75% of the home's appraised value. These mortgages must be insured for payment.

Interest Rate:
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.

Maturity Date:
The end of the term, at which time you can pay off the mortgage or renew it.

Mortgagee:
The person or financial institution that lends the money.

Mortgagor:
The borrower of the money.

Mortgage Insurance:
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.

Open Mortgage:
Allows partial or full payment of the principal at any time, without penalty.

Portability:
A mortgage option that enables borrowers to take their current mortgage with them to another property, without penalty. A transfer fee may apply.

Pre-Approved Mortgage:
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.

Prepayment Privileges:
Voluntary payments in addition to regular mortgage payments.

Principal:
The amount borrowed or still owing on a mortgage loan. Interest is paid on the principal amount.

Refinancing:
Paying off the existing mortgage and arranging a new one or re-negotiating the terms and conditions of an existing mortgage.

Renewal:
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.

Term:
The length of time the interest rate is fixed. It also indicates when the principal balance becomes due and payable to the lender.

Title:
Legal ownership in a property.

Variable-Rate Mortgage:
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