The process of paying off a loan by periodic payments of blended principal and interest.

A contract by which one party agrees to sell and another agrees to purchase.

The estimation of the value of a property in which the mortgage value is determined.

City appraisal, usually for real property taxation purposes.

An estimate of the amount of rent that may become uncollectible from the tenants of occupied units.

Any payment of principal over and above the regular payment.

The process of determining the maximum amount that can be lent to a potential borrower given his or her income and landing value of the property to be purchased.

Interim financing to bridge between the closing date on the purchase of the new home and the closing date on the sale of the current home.

An intermediary between the buyer and seller who is licensed to carry out such activities.

The date on which the lender will advance the mortgage funds.

A notice from a mortgage lender to a prospective borrower that the lender will advance mortgage funds of a specified amount under certain conditions.

A clause in a contract that calls for the happening of some event, or performance of some act before the agreement becomes binding.

An offer to purchase subject to specified conditions. These conditions could be the arranging of a mortgage, or the selling of a present home.

An investigation of a loan applicant’s ability to repay.

Applicable on revenue properties. The number of times net operating income must cover the annual mortgage payments (principal & interest). A 1.1 ratio could be used, however this ratio will vary from lender to lender.

Incurring an obligation to repay a debt in order to invest or consume more than one currently owns.

The making of mortgage payments by the borrower, as arranged with the lender.

Non-payment of installments due under the terms of the mortgage.

The removal of all mortgages and financial encumbrances from the property.

The difference between a property’s market value or purchase price and the debt incurred to purchase the property.

A legal action taken by a mortgagee to obtain possession of a property by reason of the mortgagor’s default in payments.

A calculation used by lenders and mortgage insurer to determine an applicant\'s ability to service their respective mortgage request. Usually set at 32%. The equation is as follow:

GDSR = Annual mortgage payments + Property taxes + Heating Cost + (½ of Condo fees)

Gross annual income of all borrowers

An amount of money withheld by the lender during the progress of construction of a house to ensure that construction is satisfactory at every stage. The amount of hold-back is generally equivalent to the estimated cost to complete construction.

The process of calculating compound interest payable on the amount borrowed between the day the funds are advanced and the day the amortization period begins.

The amount of the mortgage expressed as a percentage of the value of the property. The magic number is 75%. i.e. If you purchase a $400,000 property with a $100,000 down payment, your LTV will be 75%, a conventional mortgage. If the LTV is greater than 75%, a high ratio mortgage, the mortgage will have to be insured.

A document evidencing a debt owed by the borrower (mortgagor) to the lender (mortgagee). Registration of the mortgage in the Land Title Office transfers the mortgage’s interest in land to the mortgagee as security for payment of the debt.

A single mortgage registered against two or more individual parcels of real estate.

No flexibility. A mortgage which cannot be fully paid out before expiry of its term.

A short term mortgage usually six or twelve months, allowing the borrower to switch into a longer term at any time without penalty.

The transfer of equity in property as security for a debt. Basically any mortgage registered on title subsequent to the fist mortgage, i.e. second and third mortgages.

When the Loan-To-Value ratio is greater than 75%. Regulations under The Bank Act prohibit lenders from lending in excess of 75% without obtaining Hi-Ratio Insurance. The insurance premiums are as follows:

0 – 75%, no need to insure
75.1 – 80%, 1.00% premium
80.1 – 85%, 1.75% premium
85.1 – 90%, 2.00% premium
90.1 – 95%, 3.25% premium

The good news is this premium is added to the mortgage amount, no need to pay it up front.

Best of all mortgages, allows the most flexibility. Allows borrowers to repay a portion or the total amount of their mortgage at any time without penalty.

A mortgage loan where the interest rate is established for a specific term. At the end of this term, the mortgage is said to \"roll-over\" and the borrower and lender may agree to extend the loan. If satisfactory terms cannot be agreed upon, the lender is entitled to be repaid in full. In this case, the borrower may seek alternative financing.

A mortgage where payments can be fixed from one to five years, but the interest rate could change from month to month or quarterly depending on market conditions. Payments and balance outstanding are adjusted accordingly.

A mortgage taken back by the vendor from the purchaser to facilitate a sale, whereby the vendor becomes the mortgagee and the purchaser become the mortgagor.

A sum of money paid to a lender for the privilege of prepaying a mortgage in part or in full. Usually two or three month interest penalty or the differential in interest rate, which ever is the greater.

The Purchase Plus Plan lets you add the cost of improvements to your home onto your mortgage.

The length of time which you pay a specific interest rate on your mortgage loan. At the end of the term you may repay the balance of the loan or re-negotiate at current rates and conditions.

Is a secondary calculation used by lenders and mortgage insurers to determine an applicant\'s ability to service their respective mortgage request in addition to their other debt obligations. The TDSR includes all debt, i.e. credit cards, loans, line of credits etc. Usually set at 40%. The equation is as follow:

TDSR = Mortgage payments + Taxes + Heating Cost + (½ of Condo fees) + Other Debts

Gross annual income of all borrowers

A lease in which the tenant pays all operating expenses.

Mortgage payments that include both interest and principal repayment. The payment remains constant while the amount of interest taken from each payment reduces, and the amount applied to principal increases with each payment.

A short term mortgage usually six or twelve months, allowing the borrower to switch into a longer term at any time without penalty.