ABSTRACT OF TITLE:
Registry System: A condensed history of the title to a parcel of land. The abstract consists of a synopsis of every recorded instrument affecting the title to that land arranged in chronological order of recording.
ACCELERATED BI-WEEKLY MORTGAGE PAYMENTS:
Mortgage payments which are made every 2 weeks for a total of 26 payments per year. Not to be confused with semi-monthly mortgage payments.
AMORTIZATION PERIOD:
The actual number of years it will take to pay back your mortgage loan. In Canada the amortization does not generally exceed 25 years.
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.
ARMS LENGTH:
A transaction between unrelated entities where a willing seller (the seller is not compelled to sell) transacts with a willing buyer (the buyer is not compelled to buy).
ASSUMEABILITY:
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.
COMPOUND PERIOD:
The number of times per year in which the interest rate is compounded. In Canada, mortgages are generally compounded semi-annual, which is twice per year.
CONDOMINIUM FEE:
A common payment among owners which is allocated to pay expenses associated with the development.
CONVENTIONAL MORTGAGE:
A mortgage loan issued for up to 80% 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 price for which a property could be sold less the total debt registered against the property.
EFFECTIVE INTEREST RATE:
This is the actual interest rate paid on a loan or mortgage. In Canada, mortgages typically have a higher effective interest rate because of the fact that interest rates are compounded semi-annually or twice per year.
FIRST MORTGAGE:
The first mortgage in the mortgage agreement that is considered to be in first place and will have first claim on assets in the event of default.
FIXED RATE MORTGAGE:
A mortgage in which the rate of interest has been fixed for a specific period of time. This specific period of time is generally known as the term.
GDS RATIO (Gross Debt Service Ratio):
The percentage of gross annual income required to cover payments associated with housing. Payments include mortgage principal, interest, property taxes and sometimes include secondary financing, heating, condominium fees or pad rent.
HIGH-RATIO MORTGAGE:
A mortgage that exceeds 75% of the home’s appraised value or purchase price, whichever is lower. 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.
LOAN TO VALUE RATIO:
The ratio of the loan to the appraised value or purchase price of the property, whichever is lower.
MATURITY DATE:
The end of the term, at which time you can pay off the mortgage or renew it.
MORTGAGEE:
The party who advances the funds for a mortgage loan. The lender.
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:
One who gives a mortgage as security for a loan. The borrower.
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Mortgage Term
Hans Anderson
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Tags: abstract of title, amortization, amortization period, conventional mortgage, effective interest rate, loan equity, monthly mortgage payments, mortgage glossary, mortgage in canada, mortgage lending, Mortgage Term, mortgages
April 6th, 2011 at 8:03 pm
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