Your Dreams. Your Goals. Your Success.
Your Dreams. Your Goals. Your Success.
Glossary
  • Adjustable Rate Mortgage (ARM)
    A mortgage with monthly payments that fluctuate with interest rates. The changing interest rate determines how much the monthly payment increase or decrease is. ARMs change according to prime.

    Amortization Period
    The actual number of years it will take to pay back your mortgage loan. Currently in Canada the amortization generally ranges between 25 and 40 years.

    Appraised Value
    An estimate of the value of the property, conducted for the purpose of mortgage lending by a certified appraiser. Generally needed when financing a property under 80% of its value

    Assets
    Things that make you money, things that pay you per month such as stock, bonds RSP’s, self sustaining investment properties. Although, a banks definition will consist of things like your home, you car or vacation property. Generally anything you own.

    Assuming a Mortgage
    Taking over the obligations of the previous owner's (or builder's) mortgage when you buy a property. This would only be considered if the seller or builders mortgage terms are more beneficial than that of the current market. The assumer would still have to qualify under the terms of that financial institution.

    Carrying Costs
    The expenses of living in and maintaining a home and property; this includes mortgage payments, property taxes, heating, repairs, maintenance fees, etc. In the case of an investment property this can include property management fees.

    CMHC- Canada Mortgage and Housing Corporation
    One of three insurers who works to enhance Canada's housing finance options, assists Canadians who cannot afford housing in the private market, improves building standards and housing construction, and provides policymakers with the information and analysis they need to sustain a vibrant housing market in Canada.

    Closed Mortgage
    A mortgage that locks you into a specific payment schedule for a chosen term. A penalty usually applies if you repay the loan in full before the end of a closed term. A fully closed mortgage can be a mortgage product that can only be paid out after a specific term or in the event of sale of your property. Under the terms of a fully closed mortgage you cannot pay out the mortgage whatsoever. This means no refinances, no assuming and no porting during the specified term.

    Closing Costs
    Costs that are in addition to the purchase price of a property and which are payable on the closing date; examples include legal fees, land transfer taxes, and disbursements.

    Closing Date
    The date on which the property transaction takes place, ie purchase refinance or transfer.

    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.

    Conventional Mortgage
    A mortgage loan issued for up to 80% of the property’s appraised value or purchases 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. Down payment is looked upon as strongest when from own resources.

    Equity
    The difference between the price for which a property could be sold less the total debt registered against the property.

    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 costs. Most lenders will support a 35% GDS ratio, although this does vary per program.

    Genworth Financial
    One of three insurers. A private mortgage insurance company; one potential source of mortgage insurance for high-ratio mortgages

    High Ratio Mortgage
    A mortgage loan which exceeds 80% of the lesser of the appraised value or purchase price of the property. This mortgage must be insured and borrowers must pay the insurance premium (which may be added to the mortgage) to the insurer.

    Interest Rate
    The value charged by the lender for the use of the lender's money. Expressed as a percentage

    Property Transfer Tax
    A fee paid to the municipal and/or provincial government for the transferring of property from seller to buyer.

    Liabilities
    Things you pay. What you owe, including taxes, mortgage, car loan and credit card balances.

    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.

    Open Mortgage
    Allows unlimited 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 a newly purchased property, without penalty.

    Possession Date
    The date on which a new owner takes possession of their newly purchased property, it can be same day as completion date or days past the completion.

    Pre-Approved Mortgage
    Qualifies you for a mortgage before you start shopping; you know exactly how much you can spend. The pre-approval is not a guarantee for financing but merely a rate hold. The pre-approval is usually good for 90 days and is subject to income verification, down payment verification, determination of property value/security etc...

    Prepayment Privileges
    Voluntary payments in addition to regular mortgage payments. These can be lump sum once per year, or an increase in monthly payments. Industry standards range from 10/10 to 25/25 generally (monthly privilege/lump sum privilege)

    Principle
    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.

    Switch
    The process of changing Lenders at the end of a term when a mortgage becomes due or "mature".

    TDS Ratio (Total debt service ratio)
    The percentage of gross annual income required to cover payments associated with housing and all other debts and obligations, such as car loans and credit cards.

    Term
    The product time length that you select. A one year, 3 year, 5 year, 7 year, etc...

    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.




The Mortgage Centre - Mortgage Negotiators

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Dominion Lending Centres - Mortgage Negotiators
Dominion Lending Centres - Mortgage Negotiators
Dominion Lending Centres
Mortgage Negotiators
#205 - 20641 Logan Ave.
Langley, BC, V3A 7R3

michael@michaelmcivor.com
P. 778.823.6453
F. 866.407.0237
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