Critical Illness is purchased when you are healthy and don’t have any medical conditions. If you develop one of the 25 covered illnesses and you receive a written diagnosis, your claim can be submitted.
Don’t let mortgage lingo hold you back from achieving your homeownership goals. We’re here to demystify the terminology and help you navigate the mortgage process with confidence. Our comprehensive mortgage glossary covers all the common mortgage terms and phrases you’ll encounter in the process.
A 50-50 mortgage is a type of mortgage where the borrower and the lender each contribute 50% of the total cost of the property. This means that the borrower is responsible for paying half of the purchase price of the property and the lender is responsible for the other half.There are a few different ways that a 50-50 mortgage can be structured. In some cases, the borrower may make a down payment of 50% of the purchase price and the lender will provide the remaining 50% as a loan. In other cases, the borrower may contribute 50% of the purchase price and the lender will contribute the other 50% as a gift or grant.
Abandonment refers to the act of a homeowner intentionally relinquishing ownership of a property without paying off the mortgage. This can occur when the homeowner decides to move out of the property and stops making mortgage payments, or when the homeowner simply walks away from the property and leaves it vacant.
Accelerated Bi-Weekly Mortgage Payments
An accelerated bi-weekly mortgage is a type of mortgage repayment schedule in which the borrower makes payments every two weeks instead of once per month. Under the terms of an accelerated bi-weekly mortgage, the borrower makes half of their typical monthly mortgage payment every two weeks.This results in the borrower making 26 half-payments (or 13 full payments) over the course of a year, which is the equivalent of making one extra mortgage payment per year.
Accredited Mortgage Professional
An Accredited Mortgage Professional (AMP) is a financial professional who has been certified by the Mortgage Professionals Canada (MPC) organization as having completed a specific set of educational requirements and demonstrated a high level of knowledge and experience in the mortgage industry. AMPs are mostly mortgage brokers, mortgage bankers, or other financial professionals who work with clients to secure financing for the purchase or refinance of a home or other real estate property. They may also work with clients to structure mortgage financing for commercial properties.
Adjustable Rate Mortgage
An adjustable rate mortgage (ARM) is a type of home loan in which the interest rate is not fixed, but rather adjusts periodically based on a financial index. The interest rate on an ARM loan is usually lower than the interest rate on a fixed-rate mortgage, at least initially. However, because the interest rate can change over time, the monthly payments on an ARM loan may also change.
The adjustment date in a mortgage refers to the date on which the interest rate on an adjustable rate mortgage (ARM) loan is scheduled to change. The adjustment date is specified in the loan agreement and may be annual, semi-annual, or some other periodic interval. On the adjustment date, the interest rate on the loan will be adjusted based on the terms of the loan and the performance of the financial index to which it is tied.
The amortization period is the length of time it will take to pay off a mortgage loan in full, assuming a fixed interest rate and a fixed monthly payment. The amortization period is mostly expressed in terms of years.
An amortization schedule is a table or schedule that shows the breakdown of each mortgage payment into its principal and interest components. It shows the remaining balance of the loan, the interest rate, and the amount of each payment applied to both the principal and the interest over the life of the loan. An amortization schedule is often used to help borrowers understand the details of their mortgage and to plan for future payments.
The appraised value of a property is an assessment of its worth or value. It is determined by a licensed, professional appraiser who has been trained to assess the value of real estate based on a variety of factors, including the property’s location, size, condition, and other characteristics. The appraised value is typically used to help determine the amount that a lender is willing to lend to a borrower for the purchase or refinance of a property, as well as to help set the terms of the loan.
Articles Of Incorporation
In the context of mortgages, articles of incorporation refer to the legal documents that are filed with a government agency to create a corporation that is involved in the mortgage industry. This could be a mortgage lender, a mortgage servicer, or another type of corporation that is involved in the mortgage industry.The articles of incorporation for a mortgage-related corporation will outline the basic information about the corporation, such as its name, purpose, and the names of its directors and shareholders. They will also establish the corporation as a legal entity separate from its owners and directors and outline the rights and responsibilities of the corporation and its shareholders.
An asset is any item of value that is owned by the borrower and can be used as collateral for a loan. Assets can include things like cash, stocks, bonds, and other financial investments, as well as physical property such as a home or car.When a borrower applies for a mortgage, the lender will typically consider the borrower’s assets as part of their overall financial picture. This can include an evaluation of the borrower’s liquid assets, which are assets that can be easily converted to cash, as well as the borrower’s non-liquid assets, such as real estate or other property.
An assumable mortgage is a type of home loan that can be transferred from the original borrower to a new borrower without the need to qualify for a new loan or to obtain the lender’s approval. The new borrower assumes responsibility for paying off the remaining balance of the loan and agrees to the terms and conditions of the original loan agreement.
A bridge loan is a short-term loan that is used to bridge the gap between the purchase of a new property and the sale of an existing property. It allows the borrower to use the equity in their current property as collateral for a loan to purchase a new property, with the intention of paying off the loan once the existing property is sold.Bridge loans are mostly used when a borrower is unable to qualify for a mortgage on the new property because they have not yet sold their existing property. They are also used when the borrower needs to move quickly and cannot wait for the sale of their existing property to be completed before purchasing a new one.
Canada Mortgage and Housing Corporation (CMHC)
The Canada Mortgage and Housing Corporation (CMHC) is a federal Crown corporation that provides mortgage insurance and housing market research to Canadians. CMHC is funded by the government of Canada and operates at arm’s length from the government.One of the main functions of CMHC is to provide mortgage insurance to lenders. In Canada, lenders are required to have mortgage insurance for high-ratio mortgages, which are mortgages where the borrower has a down payment of less than 20% of the purchase price of the property. CMHC is one of the main providers of mortgage insurance in Canada, along with a few other private companies.CMHC also provides housing market research and analysis to help Canadians understand the housing market and make informed decisions about buying and selling real estate. The organization also offers a range of programs and services to help Canadians afford and maintain their homes, including financial assistance for first-time home buyers, support for renters, and resources for homeowners looking to make energy-efficient upgrades to their homes.
A closed mortgage is a type of home loan in which the borrower is not allowed to make additional payments or pay off the loan in full before the end of the term. The term of a closed mortgage is approximately shorter than the amortization period, which is the length of time it will take to pay off the loan in full assuming a fixed interest rate and a fixed monthly payment.With a closed mortgage, the borrower is required to make regular monthly payments to the lender, and the balance of the loan will be paid off at the end of the term. The interest rate on a closed mortgage is fixed, which means it will not change over the life of the loan.
Closing costs are fees and expenses that are associated with the purchase or refinance of a home. They are paid by the borrower at the closing of the transaction and can include a variety of expenses, such as lender fees, title insurance, appraisal fees, and other costs.
The closing date, also known as the settlement date, is the date on which the purchase or sale of a property is finalized and the ownership is transferred from the seller to the buyer. It is mostly the last step in the process of buying or selling a home and involves the signing of legal documents and the exchange of funds.The closing date is agreed upon by the buyer and seller as part of the purchase agreement or contract and is set to coincide with the completion of any necessary inspections or other conditions.
Collateral refers to the property that is being used as security for the loan. The borrower agrees to transfer ownership of the collateral to the lender if they default on the loan. The lender can then sell the collateral to recoup their losses.For example, if you take out a mortgage to buy a house, the house itself is the collateral for the loan. If you fail to make your mortgage payments, the lender can foreclose on the house and sell it to recover the money you owe.Collateral can also be used in other types of loans, such as a car loan or a small business loan. In these cases, the car or the business assets may be used as collateral for the loan.The use of collateral can help to reduce the risk for the lender, as it provides them with a way to recover their money if the borrower defaults on the loan. It also may allow the borrower to secure a loan with a lower interest rate, as the lender is taking on less risk.
A compound period is the frequency at which interest is calculated and added to the outstanding balance of the loan.There are three main types of compound periods: monthly, quarterly, and annually. In a mortgage with a monthly compound period, interest is calculated and added to the balance of the loan on a monthly basis. Similarly, in a mortgage with a quarterly compound period, interest is calculated and added every three months, and in a mortgage with an annual compound period, interest is calculated and added once per year.
A condo fee (also known as a homeowner association fee or HOA fee) is a monthly or quarterly payment that is made by the owners of condominium units to cover the costs of maintaining and managing the common areas and amenities of a condominium complex.Condominium complexes have shared amenities such as swimming pools, fitness centers, and community rooms, which are used by all of the residents of the complex. The condo fees are used to pay for the maintenance and upkeep of these amenities, as well as for the general maintenance and repair of the common areas of the complex, such as the grounds, parking areas, and hallways.
A conventional mortgage is a type of home loan that is not insured or guaranteed by the government. It is a loan that is issued by a private lender, such as a bank, credit union, or mortgage company, and is used to purchase a single-family home, a multi-family home, or a condominium.
A credit bureau is a financial institution that collects, maintains, and sells information about the credit history and financial behavior of individuals and businesses. Credit bureaus use this information to create credit reports, which are used by lenders, landlords, and other organizations to evaluate an individual’s creditworthiness and financial risk.
A credit report is a detailed record of an individual’s credit history and financial behavior. It is used by lenders, landlords, and other organizations to evaluate an individual’s creditworthiness and financial risk. Credit reports are maintained by credit bureaus, which are financial institutions that collect, maintain, and sell information about the credit history and financial behavior of individuals and businesses.In Canada, there are two main credit bureaus: Equifax and TransUnion. These bureaus maintain records of an individual’s credit history, including information about their credit accounts, payment history, and outstanding debts.When a person applies for a mortgage or other loan in Canada, the lender will request a copy of their credit report from one or both of the credit bureaus. The lender will use this information to determine the borrower’s creditworthiness and to assess the risk of lending to them. A borrower’s credit score, which is a numerical representation of their creditworthiness, is also often used by lenders to make lending decisions.
Creditor insurance is a type of insurance policy that is offered by lenders to protect their borrowers against certain financial risks. It is designed to cover the borrower’s debt payments in the event of certain unforeseen circumstances, such as the borrower’s death, disability, or job loss.
A credit score is a numerical representation of an individual’s creditworthiness, based on their credit history and financial behavior. Credit scores are used by lenders, landlords, and other organizations to evaluate an individual’s risk as a borrower or tenant.There are several different credit scoring models that are used by credit bureaus, and each model has its own specific scoring range. Ultimately, a higher credit score indicates a lower risk of default, and may result in a better interest rate or other terms for a mortgage loan.
Debt consolidation is a financial strategy that involves combining multiple debts into a single, more manageable loan. It is often used by individuals who have multiple high-interest debts, such as credit card balances, personal loans, and other types of unsecured debts, and who are looking to reduce their monthly payments and simplify their debt repayment process.In the context of a mortgage, debt consolidation may involve taking out a new mortgage or refinancing an existing mortgage to pay off other debts. This can allow the borrower to combine their debts into a single loan with a lower interest rate and potentially lower monthly payments.
Debt ratio, also known as debt-to-income (DTI) ratio, is a financial measure that compares an individual’s total monthly debt payments to their gross monthly income. It is used by lenders to evaluate an individual’s ability to manage their debts and to make sure that they can afford the payments on a mortgage or other loan.To calculate an individual’s debt ratio, lenders add up all of the borrower’s monthly debt payments, including their mortgage, car loans, credit card payments, and other debts. This total is then divided by the borrower’s gross monthly income, which is their total income before taxes and other deductions.The resulting debt ratio is expressed as a percentage. For example, if an individual’s total monthly debt payments are $2,000 and their gross monthly income is $6,000, their debt ratio would be 33%.
Default occurs when a borrower fails to make their mortgage payments as required by the terms of their loan agreement.If a borrower defaults on their mortgage, the lender may take legal action to recover the unpaid amount of the loan. This may include the initiation of foreclosure proceedings, in which the lender attempts to sell the property that was used as collateral for the loan in order to recoup their losses.
The down payment is the portion of the purchase price of a home that the borrower pays in cash, rather than financing through a loan. The down payment is usually paid at the time of closing, when the borrower takes possession of the property.The size of the down payment can vary widely depending on the type of property being purchased, the borrower’s financial situation, and the lender’s requirements. For a mortgage, the down payment is usually a percentage of the purchase price, and may range from 3% to 20% or more.
Equity represents the ownership interest that a homeowner has in their property. It is calculated by subtracting the amount of the mortgage and any other debts secured by the property from the property’s value.For example, if a homeowner has a mortgage of $200,000 on a property that is worth $300,000, they have $100,000 in equity in the property. As the homeowner pays down their mortgage and the value of the property increases, their equity in the property will also increase.
A home equity loan is a type of loan that allows a homeowner to borrow money using their equity in their property as collateral. It is a fixed-term loan, which means that the borrower receives a lump sum of money at the time the loan is issued, and is required to make regular payments to pay back the loan over a set period of time, usually 5 to 15 years.
Equity Take Out Mortgage
An equity takeout mortgage is a type of loan that allows a homeowner to borrow money using the equity in their property as collateral. It is used by homeowners who want to access the equity they have built up in their property in order to make improvements, pay off debts, or finance other expenses.An equity takeout mortgage is similar to a home equity loan, in that it allows a homeowner to borrow money using the equity in their property as collateral. However, an equity takeout mortgage is typically used to refinance an existing mortgage, rather than being taken out as a separate loan.
Fair Market Value
Fair market value (FMV) is the price that a willing buyer would pay and a willing seller would accept for a property in an open and competitive market, assuming that both parties are fully informed and acting in their own best interests. It is a common standard that is used to determine the value of a property for a variety of purposes, including for mortgage lending.Lenders often use the fair market value of a property to determine the amount of a mortgage loan that they are willing to extend to a borrower. For example, if the fair market value of a property is $300,000 and the borrower has a 20% down payment, the lender may be willing to extend a mortgage loan for the remaining $240,000.
A first mortgage is a type of loan that is used to finance the purchase of a property, such as a home or a condominium. It is called a “first” mortgage because it is the primary loan that is secured by the property, and has priority over any other loans or liens that may be placed on the property.A first mortgage is issued by a lender, such as a bank, credit union, or mortgage company, and is secured by the property that is being purchased. The borrower is required to make regular payments to the lender to pay back the loan, and the lender holds a lien on the property until the loan is fully paid off.
Fixed Rate Mortgage
A fixed-rate mortgage is a type of home loan in which the interest rate remains the same throughout the life of the loan. This means that the borrower’s monthly payments are also fixed, and do not fluctuate based on changes in interest rates.
Foreclosure is the legal process by which a lender attempts to recover the unpaid balance of a mortgage loan by selling the property that was used as collateral for the loan. It is a serious and often costly consequence of defaulting on a mortgage loan, and can result in the borrower losing their home.Foreclosure mostly begins when a borrower misses one or more mortgage payments and the lender sends them a notice of default. If the borrower is unable to catch up on the missed payments and bring the loan current, the lender may initiate foreclosure proceedings.
The gross debt service (GDS) ratio is a measure of an individual’s ability to make the payments on a mortgage or other debt. It is calculated by dividing the total monthly mortgage payments, including principal, interest, taxes, and heating costs, by the borrower’s gross monthly income.For example, if a borrower has a gross monthly income of $5,000 and their total monthly mortgage payments are $1,500, their GDS ratio would be 30%. This would indicate that the borrower is using 30% of their income to cover their mortgage payments.
A gift letter is a written statement that confirms that a borrower has received a gift of money from a donor, and that the donor does not expect the money to be repaid. Gift letters are commonly used in the mortgage industry when a borrower is using gifted funds as part of their down payment or closing costs for a property.
A home equity line of credit (HELOC) is a type of loan that allows a homeowner to borrow money using the equity in their property as collateral. It is a revolving credit line, which means that the borrower can access the funds as needed and make payments on the loan as they use the funds.HELOCs are often used by homeowners to finance home renovations, pay off high-interest debts, or finance other expenses. They may offer lower interest rates than other types of loans, as the lender is taking on less risk by using the property as collateral.
A high-ratio mortgage is a type of mortgage wherein the borrower has a down payment of less than 20% of the purchase price of the property. High-ratio mortgages are also known as high-loan-to-value (HLTV) mortgages.In Canada, high-ratio mortgages are required to be insured by the Canada Mortgage and Housing Corporation (CMHC) or a private mortgage insurance company. The insurance protects the lender against the risk of default by the borrower.
Home insurance, also known as homeowner’s insurance, is a type of insurance that covers a homeowner’s property and belongings against various risks, such as damage from natural disasters, theft, and liability. It is sometimes required by lenders when a borrower takes out a mortgage on a property.
Home Insurance Policy
Home insurance policies include coverage for the structure of the home, such as the walls, roof, and foundation, as well as the personal belongings of the homeowner, such as furniture, appliances, and clothing. Some policies may also include coverage for additional living expenses if the home is temporarily uninhabitable due to a covered loss. Policies vary in terms of the specific risks that are covered and the amount of coverage provided. Some common risks that may be covered by a home insurance policy include damage from natural disasters, such as earthquakes, floods, and storms, as well as fire, theft, and liability.
High Yield Mortgage
A high yield mortgage, also known as a high yield investment mortgage, is a type of mortgage that is offered to investors as an alternative to traditional investments, such as stocks or bonds. High yield mortgages are often structured as mortgage-backed securities, which means that they are backed by a pool of mortgages and are sold to investors in the form of securities.High yield mortgages may offer investors the potential for higher returns than traditional investments, as they may be based on a higher interest rate. However, they may also come with higher risks, as they are often issued by non-traditional lenders, such as private individuals or companies, and may not be subject to the same regulatory oversight as traditional mortgages.
The interest rate is the percentage of a loan that is charged by the lender for borrowing money. It is expressed as a yearly rate and is added to the principal amount of the loan. The interest rate determines the size of the monthly payments that the borrower is required to make to pay back the loan, as well as the total cost of the loan over its term.
Interim financing, also known as bridge financing or gap financing, is a type of short-term loan that is used to finance the purchase of a property until the borrower is able to secure permanent financing. It is often used when a borrower is unable to obtain a mortgage or other long-term financing in time to complete the purchase of a property.Interim financing is secured by the property that is being purchased and is used as a temporary solution to bridge the gap between the time that the borrower makes an offer on the property and the time that they are able to secure permanent financing. The loan is paid off when the borrower obtains a mortgage or other long-term financing, or when the property is sold.
A job letter is a document that provides proof of employment and income for a borrower who is applying for a mortgage. It is requested by a lender as part of the mortgage application process in order to verify the borrower’s employment and income information.A job letter may include information about the borrower’s job title, salary, length of employment, and other relevant details. It may also include a statement from the borrower’s employer confirming their employment status and salary.Job letters are often required by lenders in order to evaluate a borrower’s ability to make the required mortgage payments. Lenders may also request other documentation, such as pay stubs or tax returns, to verify the borrower’s employment and income.
Liability is the responsibility of the borrower to pay back the loan according to the terms of the mortgage. This includes making the required monthly payments, as well as paying any fees or penalties that may be due.Borrowers are mostly required to sign a mortgage agreement or promissory note, which specifies the terms of the loan, including the interest rate, the term of the loan, and the borrower’s responsibilities. By signing the agreement, the borrower agrees to take on the liability for paying back the loan.Liability can also refer to the risk that a lender takes on when issuing a mortgage. For example, if a borrower defaults on their mortgage and is unable to pay back the loan, the lender may be at risk of losing the property that was used as collateral for the loan. To protect against this risk, lenders may require insurance, such as mortgage default insurance, or may require the borrower to have a high credit score or a large down payment.
Licensed Mortgage Associate
A licensed mortgage associate is a professional who is trained and licensed to provide mortgage-related services to clients. In Canada, mortgage associates are required to be licensed by the Financial Services Regulatory Authority of Ontario (FSRA) or a similar regulatory body in order to legally offer mortgage services.Mortgage associates may work for a mortgage broker, a bank, or other financial institution, and may be responsible for helping clients find and secure mortgage financing, as well as providing guidance on the mortgage process and helping clients to understand their options. They may also assist clients with the paperwork and documentation required for a mortgage application.In order to become a licensed mortgage associate, individuals must typically complete a certain amount of education and training, pass an exam, and meet other licensing requirements. Licensed mortgage associates must also adhere to professional standards and regulations, and may be subject to ongoing education requirements to maintain their license.
A lien is a legal claim that is made on a property by a creditor as security for the payment of a debt. Liens can be placed on a property by creditors, such as lenders or contractors, in order to ensure that the debt is paid.There are different types of liens that can be placed on a property, including mortgage liens, judgment liens, and mechanics’ liens. A mortgage lien is a claim on a property that is made by a lender as security for a mortgage loan. A judgment lien is a claim on a property that is made by a creditor who has obtained a judgment against the borrower in court. A mechanics’ lien is a claim on a property that is made by a contractor or other service provider who has not been paid for work done on the property.
A loan is a sum of money that is borrowed by a borrower from a lender and is required to be repaid with interest over a specified period of time. Loans may be secured, which means that they are backed by collateral, such as a property or other asset, or unsecured, which means that they are not backed by collateral.Loans may be used for a variety of purposes, such as financing the purchase of a home, paying for education, or starting a business. There are different types of loans available, including mortgage loans, personal loans, and business loans, each with its own specific terms and conditions.
Loan To Value Ratio (LTV)
The loan-to-value ratio (LTV) is a measure of the size of a mortgage loan in relation to the value of the property that is being purchased. It is expressed as a percentage and is calculated by dividing the loan amount by the property value.For example, if a borrower is taking out a mortgage for $200,000 to purchase a property valued at $250,000, the LTV would be 80%, as $200,000 is 80% of $250,000.Lenders use the LTV ratio to assess the risk of a mortgage loan and to determine the terms of the loan, including the interest rate and any required insurance. A higher LTV ratio may indicate a higher risk for the lender, as it may be more difficult for the borrower to pay back the loan if the value of the property declines. As a result, borrowers with a higher LTV ratio may be required to pay a higher interest rate or to purchase mortgage default insurance.
A loan officer is a professional who is responsible for evaluating and approving loan applications for a lender. Loan officers typically work for banks, credit unions, and other financial institutions, and may also work for mortgage brokers or other organizations that provide loan services.The primary role of a loan officer is to assess the creditworthiness of potential borrowers and to determine whether they are eligible for a loan. This may involve reviewing the borrower’s credit history, employment and income information, and other financial details. Loan officers may also be responsible for negotiating the terms of the loan, including the interest rate and repayment period, with the borrower.
Market value is the estimated price that a property would sell for in a competitive market, based on the demand for the property and the prices of similar properties in the area. Market value is determined by a licensed appraiser, who takes into account various factors, such as the location, size, and condition of the property, as well as recent sales of similar properties in the area.Market value is an important consideration for both buyers and sellers in the real estate market, as it can affect the price that a property is listed for and the price that it ultimately sells for. It can also be used to determine the amount that a lender is willing to lend on a property, as well as the amount of insurance coverage that is required.
The maturity date is the date on which a loan or other financial obligation is due to be repaid. It is the end of the loan term and is specified in the loan agreement or other documentation.For example, in the case of a mortgage, the maturity date is the date on which the borrower is required to pay off the remaining balance of the loan. This may involve paying off the principal and any outstanding interest, as well as any fees or penalties that may be due.
A mortgage is a loan that is used to finance the purchase of a property. It is secured by the property itself and is used to purchase a home, although it can also be used to purchase other types of real estate, such as commercial properties or vacation homes.Mortgages are issued by banks, credit unions, and other financial institutions, and may also be offered by mortgage brokers or other organizations that specialize in providing mortgage financing. In order to qualify for a mortgage, borrowers need to have a good credit score, a stable income, and a down payment, which is a percentage of the purchase price that is paid upfront.
Mortgage affordability is the ability of a borrower to secure and maintain a mortgage based on their income, expenses, and other financial factors. When determining mortgage affordability, lenders consider a variety of factors, including the borrower’s credit score, debt-to-income ratio, and the size of the down payment.Lenders use a variety of tools and techniques to determine mortgage affordability, including affordability calculators, which allow borrowers to input their financial information and receive an estimate of the mortgage amount that they may be able to afford.
Mortgage amortization is the process of paying off a mortgage loan over time through regular payments. When a borrower takes out a mortgage, the loan is typically divided into a series of equal payments, known as installments, which are made over a specified period of time, such as 15 or 30 years. Each installment includes a portion of the principal and the interest on the loan.
A mortgage application is a formal request for a mortgage loan that is made by a borrower to a lender. The mortgage application process involves filling out a mortgage application form and submitting it to the lender, along with supporting documentation and information about the borrower’s financial situation.The purpose of a mortgage application is to provide the lender with information about the borrower and the property being purchased, in order to determine the borrower’s eligibility for a mortgage and the terms of the loan.Mortgage applications require information about the borrower’s employment, income, assets, liabilities, and credit history, as well as details about the property being purchased, such as the location, size, and value. The lender may also require additional documentation, such as pay stubs, tax returns, and proof of insurance.
The mortgage balance is the remaining amount of a mortgage loan that is owed by the borrower. It is the difference between the original loan amount and the amount that has been paid off through regular mortgage payments or other means.The mortgage balance may change over time as the borrower makes payments on the loan. As the balance is paid down, the borrower’s equity in the property increases, as the borrower owns a greater portion of the property outright.
A mortgage broker is a professional who helps borrowers to find and secure mortgage financing. Mortgage brokers work with a variety of lenders, including banks, credit unions, and other financial institutions, and are sometimes paid a commission or fee for their services.Mortgage brokers act as intermediaries between borrowers and lenders, and may be responsible for helping borrowers to understand the different mortgage products and options available to them, as well as assisting with the mortgage application process. They may also be able to negotiate the terms of the mortgage, such as the interest rate and fees, on behalf of the borrower.Mortgage brokers may work with a wide range of borrowers, including first-time homebuyers, homeowners looking to refinance their mortgages, and investors seeking to purchase rental properties. In order to become a mortgage broker, individuals need to be licensed and may be required to complete certain educational and training requirements.
A mortgage brokerage is a business that specializes in helping borrowers to find and secure mortgage financing. Mortgage brokerages usually employ mortgage brokers, who are professionals who work with a variety of lenders, including banks, credit unions, and other financial institutions, to help borrowers find the best mortgage products and terms.
A mortgage company is a financial institution or other organization that provides mortgage loans to borrowers. Mortgage companies may be banks, credit unions, or other financial institutions that offer a range of mortgage products, including fixed-rate mortgages, adjustable-rate mortgages, and government-insured mortgages.Mortgage companies may work with a wide range of borrowers, including first-time homebuyers, homeowners looking to refinance their mortgages, and investors seeking to purchase rental properties. They may also offer a variety of other financial products and services, such as personal loans, credit cards, and investment products.Mortgage companies may be regulated by a government agency or other regulatory body, and may be required to adhere to certain standards and regulations in order to operate.
A mortgage deed is a legal document that is used to secure a mortgage loan. It is also known as a mortgage note or a deed of trust.A mortgage deed includes the names of the borrower and the lender, the terms of the mortgage, including the interest rate and the repayment period, and a description of the property that is being used as collateral for the loan. It may also include provisions for default on the loan, such as the right of the lender to foreclose on the property.The mortgage deed is recorded with the county or other local government agency, in order to provide public notice of the mortgage and to establish the lender’s legal claim to the property. It is an important document in the mortgage process and is retained by the lender as evidence of the loan.
A mortgage holder is the person or entity that holds the mortgage on a property. The mortgage holder is the lender that provided the mortgage loan to the borrower, and may be a bank, credit union, or other financial institution.The mortgage holder has a legal claim to the property that is being used as collateral for the mortgage loan, and may have the right to foreclose on the property if the borrower defaults on the loan. The mortgage holder is also responsible for servicing the loan, which may include collecting payments, managing the escrow account, and communicating with the borrower about the loan.
Mortgage insurance is a type of insurance that is designed to protect lenders against losses that may result from a borrower defaulting on a mortgage loan. It is typically required when a borrower has a high loan-to-value ratio (LTV), which means that the size of the mortgage loan is relatively high compared to the value of the property being purchased.
A mortgage lead is a potential borrower who has expressed an interest in obtaining a mortgage loan. Mortgage leads may be generated through a variety of channels, including online advertising, direct mail campaigns, or referrals from real estate agents or other industry professionals.Mortgage leads are mostly collected and managed by mortgage brokers, lenders, or other organizations that provide mortgage financing.
A mortgage lender is a financial institution or other organization that provides mortgage loans to borrowers. Mortgage lenders may be banks, credit unions, or other financial institutions that offer a range of mortgage products, including fixed-rate mortgages, adjustable-rate mortgages, and government-insured mortgages.
Mortgage Life Insurance
Mortgage life insurance is a type of insurance that is designed to pay off a borrower’s mortgage in the event of their death. It is purchased by borrowers who are concerned about the financial impact that their death could have on their loved ones, particularly if they have a high mortgage balance or a large number of dependents.Mortgage life insurance policies are issued in the borrower’s name and are designed to pay off the remaining balance of the mortgage upon the borrower’s death. The policy may also provide additional benefits, such as income replacement or funeral expenses, to the borrower’s beneficiaries.Mortgage life insurance premiums are based on the borrower’s age, health, and the terms of the mortgage, and may be included in the monthly mortgage payment or paid separately.
A mortgage loan is a loan that is used to finance the purchase of a property. It is secured by the property itself and is used to purchase a home, although it can also be used to purchase other types of real estate, such as commercial properties or vacation homes.
A mortgage payment is a regular payment made by a borrower to a lender in order to pay off a mortgage loan. Mortgage payments include a portion of the principal balance of the loan, as well as interest and any applicable fees or charges.The amount of the mortgage payment is determined by the terms of the mortgage, including the interest rate, the loan term, and the size of the down payment. Mortgage payments may be made on a monthly, biweekly, or other regular basis, and are required until the mortgage is fully paid off.Mortgage payments may also include property taxes, homeowner’s insurance, and private mortgage insurance (PMI) premiums, if applicable.
The mortgage principal is the amount of money that is borrowed in a mortgage loan. It is the amount of the loan that is outstanding and unpaid, and may include any fees or charges associated with the loan.The mortgage principal is paid off over time through regular mortgage payments, which are made on a monthly, biweekly, or other regular basis. Each mortgage payment includes a portion of the principal and the interest on the loan.
Mortgage qualification is the process of evaluating a borrower’s financial situation and creditworthiness in order to determine their ability to qualify for a mortgage loan. Mortgage qualification involves reviewing the borrower’s credit score, income, debts, and other financial factors to determine whether they meet the lender’s requirements for a mortgage.Lenders have specific guidelines and requirements for mortgage qualification, which may vary depending on the type of mortgage, the property being purchased, and the borrower’s credit and financial situation. Factors that may be considered in mortgage qualification include the borrower’s credit score, debt-to-income ratio, employment history, and savings and assets.
The mortgage rate is the interest rate that is charged on a mortgage loan. It is the percentage of the loan amount that is paid to the lender as interest over the term of the loan.Mortgage rates can vary widely depending on a variety of factors, including the lender, the type of mortgage, the borrower’s credit score and financial situation, and the current economic climate. Fixed-rate mortgages have an interest rate that remains the same throughout the term of the loan, while adjustable-rate mortgages (ARMs) have an interest rate that can change over time based on changes in market interest rates.
Mortgage refinancing is the process of replacing an existing mortgage with a new mortgage loan. It is commonly done in order to obtain a lower interest rate, lower monthly payments, or to access the equity in the property.
A mortgage renewal is the process of extending a mortgage loan for an additional term at the end of the original loan term. Mortgage renewal is usually offered to borrowers by their current lender, although borrowers may also have the option to shop around for a new mortgage lender if they wish.
A mortgage statement is a document that is provided to a borrower by their mortgage lender that outlines the details of their mortgage loan. It includes information about the borrower’s loan balance, payment history, and any fees or charges associated with the loan.A mortgage statement may also include information about the borrower’s escrow account, if applicable, which is an account that is used to pay for property taxes and insurance premiums on behalf of the borrower. It may also include a summary of any recent transactions or changes to the loan, such as a payment or a change in the interest rate.
The mortgage term is the length of time over which a mortgage loan is intended to be repaid. It is typically expressed in years, and may range from a few years to several decades, depending on the terms of the mortgage and the borrower’s financial situation.
The mortgagee is the lender or financial institution that provides a mortgage loan to a borrower. The mortgagee has a financial interest in the property that is being purchased with the mortgage loan and is sometimes the owner of the mortgage.The mortgagee is responsible for evaluating the borrower’s creditworthiness and financial situation and determining the terms of the mortgage loan, such as the interest rate, fees, and other terms and conditions. The mortgagee is also liable for servicing the mortgage loan, which may include collecting monthly payments and enforcing any terms or conditions of the loan.
The mortgagor is the borrower who takes out a mortgage loan in order to finance the purchase of a property. The mortgagor is responsible for repaying the mortgage loan according to the terms of the mortgage agreement and is mainly the owner of the property.
Notice Of Assessment
A Notice of Assessment (NOA) is a document that is issued by the Canada Revenue Agency (CRA) to individuals and businesses in Canada that summarizes their tax assessment for a particular tax year. The NOA provides information about the amount of income that was earned and the taxes that were paid during the year, as well as any credits or deductions that were claimed.
An open mortgage is a type of mortgage that allows the borrower to make additional payments or pay off the mortgage in full at any time without incurring any penalties or fees. Open mortgages often have a variable interest rate, which means that the interest rate may change over time based on market conditions.
The overnight rate is the interest rate that banks and other financial institutions charge each other for borrowing or lending funds on a very short-term basis. The overnight rate is set by the central bank of a country and is used as a benchmark for short-term interest rates in the financial markets.The overnight rate is used to influence the supply of money in the economy and to help stabilize prices and maintain financial stability. Central banks may adjust the overnight rate up or down in order to achieve their monetary policy objectives.The overnight rate can have a significant impact on the cost of borrowing for businesses and consumers, as it is used as a benchmark for other short-term interest rates, such as those on credit cards and short-term loans. It is also closely watched by investors and analysts as an indicator of the overall direction of monetary policy and the state of the economy.
A pay stub is a document that is provided to an employee by their employer that summarizes the employee’s earnings and deductions for a pay period. A pay stub typically includes the employee’s gross pay, which is the total amount of pay before any deductions are taken, as well as any deductions that have been taken, such as taxes, insurance premiums, and retirement contributions.Pay stubs are important for employees to keep for tax and financial record-keeping purposes, and may also be required in order to apply for a mortgage or other types of loans. Lenders typically require borrowers to provide proof of income, such as pay stubs or tax returns, in order to evaluate their creditworthiness and determine their ability to make mortgage payments.
A portable mortgage is a type of mortgage that allows the borrower to transfer the mortgage to a new property if they decide to sell their current property and purchase a new one. Portable mortgages are typically offered by lenders as an option for borrowers who may be planning to move in the near future and want the flexibility to take their mortgage with them to their new home.
Portability refers to the ability of a borrower to transfer their mortgage to a new property if they decide to sell their current property and purchase a new one. A mortgage that is portable allows the borrower to take the mortgage with them to their new home, rather than having to apply for a new mortgage or pay off the existing mortgage in full.
A pre-approved mortgage is a type of mortgage in which the lender has evaluated the borrower’s creditworthiness and financial situation and has agreed to lend a specific amount of money for the purchase of a property. Pre-approved mortgages are typically issued to borrowers after they have submitted a mortgage application and provided financial information to the lender, such as income, debts, and credit score.
Prepayment penalties are fees that may be charged to a borrower if they pay off their mortgage in full or make additional payments on their mortgage before the end of the mortgage term. Prepayment penalties are included in the terms of a mortgage agreement and are designed to protect the lender’s financial interests by ensuring that they receive a certain amount of interest over the life of the mortgage.Prepayment penalties may be applied if a borrower pays off their mortgage in full or makes additional payments that exceed a certain amount, such as 20% of the original mortgage balance. The amount of the penalty may be based on a percentage of the amount being prepaid or a fixed dollar amount.
Prepayment privilege, also known as a prepayment option or prepayment flexibility, is a feature of some mortgage products that allows the borrower to make additional payments on their mortgage or pay off the mortgage in full without incurring any penalties or fees. Prepayment privilege is offered as an option by lenders to borrowers who want the flexibility to pay off their mortgage early or to make additional payments without being penalized.
The principal is the original amount of money that is borrowed and is typically used to finance the purchase of a property. The principal is usually repaid over the term of the mortgage through a series of monthly payments, which include a portion of the principal as well as interest.The principal is important in determining the overall cost of a mortgage, as the borrower will be required to pay interest on the principal amount over the life of the mortgage. The principal may also be affected by additional payments made by the borrower, such as prepayments or extra payments, which can reduce the overall amount of interest paid and potentially shorten the term of the mortgage.
The prime rate is a benchmark interest rate that is used as a reference point for setting other interest rates, such as those on credit cards, loans, and mortgages. The prime rate is set by the central bank of a country and is based on the overnight rate.The prime rate is closely watched by investors and analysts as an indicator of the overall direction of monetary policy and the state of the economy. Changes in the prime rate can have a significant impact on the cost of borrowing for businesses and consumers, as it is used as a benchmark for other short-term interest rates.
Property Tax Assessment
Property tax assessment is the process of determining the value of a property for the purpose of calculating property taxes. Property tax assessment is mostly conducted by local governments or other tax authorities, who use a variety of methods to determine the value of a property, such as comparing it to similar properties in the area or using a formula that takes into account factors such as the size and age of the property and the quality of the neighborhood.
A purchase contract, also known as a sales contract or purchase agreement, is a legally binding agreement between a buyer and a seller. This outlines the terms and conditions of a real estate transaction. A purchase contract mostly includes the purchase price of the property, the closing date, any contingencies that must be met before the sale can be completed, and any other terms and conditions that have been agreed upon by the parties.The purchase contract is an important document in the process of buying a property, as it sets out the rights and obligations of both the buyer and the seller and helps to protect their interests. The purchase contract may also include provisions for financing the purchase, such as a mortgage or other financing arrangement, and may be subject to certain conditions or contingencies related to the financing.
A rate lock is a feature that allows a borrower to lock in a specific interest rate on a mortgage or other loan for a set period of time. Rate locks are offered by lenders as a way to protect borrowers from potential increases in interest rates during the loan application process.Rate locks are usually offered for a fee and are valid for a specific period of time, such as 30, 45, or 60 days. The length of the rate lock period may depend on the lender and the borrower’s financial situation, as well as market conditions.
A readvanceable mortgage is a type of mortgage that allows the borrower to borrow additional funds from the lender without having to reapply for a new mortgage or go through the loan approval process again. Readvanceable mortgages are structured as a line of credit that is secured by the borrower’s home, and the borrower can access additional funds as needed by drawing on the line of credit.
Real Estate Agent
A real estate agent is a professional who helps individuals buy, sell, or rent properties. Real estate agents are licensed by the state in which they practice and are typically affiliated with a real estate brokerage, which is a company that represents buyers and sellers in real estate transactions.Real estate agents work with clients to understand their needs and goals and to help them find properties that meet their criteria. They may also assist with negotiations and help to facilitate the closing of the sale or rental of a property. Real estate agents may specialize in working with buyers, sellers, or landlords — or with all three.
Real Estate Appraisal
A real estate appraisal is a professional assessment of the value of a property. Real estate appraisals are conducted by a licensed appraiser, who uses methods to determine the value of a property based on its features, location, and other factors.Real estate appraisals are often used to determine the value of a property for the purpose of setting a sale price, determining a mortgage loan amount, or calculating property taxes. They may also be used in legal or financial disputes, such as in divorce or estate settlement proceedings.
A realtor is a professional who is licensed to help individuals buy, sell, or rent properties. Realtors are members of the National Association of Realtors (NAR), a professional trade organization that sets standards for the real estate industry and provides education and resources for real estate professionals.Like other real estate agents, realtors work with clients to understand their needs and goals and to help them find properties that meet their criteria. They may also assist with negotiations and help to facilitate the closing of the sale or rental of a property.
A reverse mortgage is a type of loan that allows homeowners who are 62 years of age or older to borrow against the equity in their home. Reverse mortgages are offered as a way for seniors to access the equity in their home to supplement their retirement income or to pay for healthcare or other expenses.With a reverse mortgage, the borrower does not have to make monthly payments on the loan, and the loan becomes due when the borrower sells the home, moves out of the home, or passes away. The borrower is responsible for paying property taxes, insurance, and any other costs related to maintaining the home.
A sale contract, also known as a purchase contract or sales agreement, is a legally binding agreement between a buyer and a seller that outlines the terms and conditions of a real estate transaction. A sale contract typically includes the purchase price of the property, the closing date, any contingencies that must be met before the sale can be completed, and any other terms and conditions that have been agreed upon by the parties.
A second mortgage is a loan that is secured by the equity in a property and is taken out in addition to the borrower’s first mortgage. A second mortgage is typically taken out to borrow additional funds, such as for home renovations, investments, or debt consolidation.
Security refers to the collateral that is pledged to the lender to secure the loan. In most cases, the security for a mortgage loan is the borrower’s home, which is used as collateral to guarantee repayment of the loan. If the borrower defaults on the loan, the lender may be able to foreclose on the property and sell it to recover the outstanding balance of the loan.
Semi-Monthly Mortgage Payments
Semi-monthly mortgage payments are a kind of mortgage payment schedule in which the borrower makes half of their monthly mortgage payment twice a month. These payments commonly take place on the 15th and the last day of the month. Semi-monthly mortgage payments may be offered as an option by the lender or may be requested by the borrower as a way to manage their cash flow or to align their mortgage payments with their pay schedule.
Sweat equity refers to the value of the labor and effort that a homeowner puts into improving their home — mainly through repairs, renovations, or other projects. The sweat equity can increase the value of a home and can be used as a form of down payment or collateral when applying for a mortgage or refinancing a loan.For example, if a homeowner spends time and money fixing up a home (repainting, doing renovations and certain constructions) to increase its value, they may be able to use that increased value as leverage when applying for a mortgage or refinancing a loan. The lender may consider the increased value of the home as a form of equity and may use it to help determine the borrower’s loan-to-value ratio or to assess their creditworthiness.
Take Out Mortgage
A take-out mortgage is a long-term mortgage that is used to replace a short-term or interim loan, such as a construction loan or a bridge loan. Take-out mortgages are used when a borrower is purchasing a property and wants to secure permanent financing for the property once it has been built or renovated.
The TDS ratio, or total debt service ratio, is a measure of a borrower’s ability to make the payments on their debts, including their mortgage, based on their income. The TDS ratio is calculated by dividing the borrower’s total monthly debt payments by their gross monthly income.
The term refers to the length of time that the mortgage agreement is in effect. The term of a mortgage is usually expressed in years, and can range from a few years to several decades.
A third mortgage is a loan that is secured by the equity in a property and is taken out in addition to the borrower’s first and second mortgages. A third mortgage is typically taken out to borrow additional funds, such as for home renovations, investments, or debt consolidation.
Titles are the legal ownership of a property. The title to a property is held by the borrower, who has the right to use, sell, or transfer the property as they see fit.The title to a property is typically established through a legal process known as conveyancing, in which the ownership of the property is transferred from the seller to the buyer. The title to a property may also be held in trust, in which case the property is owned by a trust rather than an individual or group of individuals.
Title insurance is a type of insurance that protects the borrower and the lender against loss or damage resulting from defects in the title to a property. Title insurance is sometimes required by lenders as a condition of granting a mortgage, and is intended to protect the lender’s interest in the property.
Underwriting is the process of evaluating and approving a mortgage application, typically by a lender or an underwriter working on behalf of the lender. During the underwriting process, the underwriter reviews the borrower’s financial information, including their credit history, income, assets, and debts, to determine whether they are a good risk for the lender.If the underwriter determines that the borrower is a good risk, they will approve the mortgage application and set the terms of the loan. If the underwriter determines that the borrower is not a good risk, they may deny the mortgage application or offer the borrower a loan with less favorable terms.
Variable Rate Mortgage
A variable rate mortgage, also known as a floating rate mortgage or an adjustable rate mortgage (ARM), is a type of mortgage in which the interest rate on the loan may change over time. The interest rate on a variable rate mortgage is typically tied to a benchmark interest rate, such as the prime rate, and may fluctuate based on changes in the benchmark rate.
A void cheque is a type of personal check that has been marked as “void” or “cancelled” to indicate that it cannot be used for payment. Void cheques are often used as a way to provide the routing and account numbers for a bank account without actually transferring any funds.In the context of a mortgage, a void cheque may be required by the lender as part of the mortgage application process. The lender may use the void cheque to verify the borrower’s bank account information and to set up automatic payments for the mortgage.A void cheque may be provided by the borrower as an alternative to other types of bank account verification, such as a bank statement or a letter from the bank.
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