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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. 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 FEE:
A 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, DEED TAX OR PROPERTY PURCHASE TAX:
A fee paid to the municipal and /or provincial 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 the financial institution that lends 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. MORTGAGOR:
The borrower. 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. 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.
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