Real Estate Glossary:

• Scroll down or browse at right for desired term.

Terms and Definitions

Amortization Period The actual number of years it will take to pay back your mortgage loan. [  top  ]

Appraised Value An estimate of the value of the property and not always the Purchase Price. Conducted for the purpose of mortgage lending by a certified appraiser. This appraisal is not to be confused with a building inspection. [  top  ]

Assumability Allows the buyer to take over the seller's mortgage on the property. [  top  ]

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. [  top  ]

Condominium The owner has title to a single unit, as well as a share in the common elements such as elevators or surrounding land. [  top  ]

Condominium Fee A monthly common payment among owners which is allocated to pay expenses. [  top  ]

Conventional Mortgage A mortgage loan issued for up to 75% of the property's appraised value or purchase price, whichever is less. [  top  ]

Down Payment The buyer's cash payment toward the property. The difference between the purchase price and the amount of the mortgage loan. [  top  ]

Equity The difference between the home's selling value and the debts against it. [  top  ]

High-Ratio Mortgage A mortgage that exceeds 75% of the home's appraised value. These mortgages must be insured for payment. [  top  ]

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

Land Transfer Tax A fee paid to the government for the transferring of property from seller to buyer. [  top  ]

Maturity Date The end of the term, at which time you can pay off the mortgage or renew it. [  top  ]

Mortgage See also: | closed mortgage | conventional mortgage | high-ratio mortgage | mortgagee | mortgagor | mortgage insurance | mortgage life insurance | open mortgage | pre-approved mortgage | second mortgage | variable-rate mortgage | vendor take-back mortgage | [  top  ]

Mortgagee The person or financial institution that lends the money. [  top  ]

Mortgagor The borrower of the money. [  top  ]

Mortgage Insurance Applies to high-ratio mortgages. It protects the lender against loss if the borrower is unable to repay the mortgage. [  top  ]

Mortgage Life Insurance Pays off the mortgage if the borrower dies. [  top  ]

Open Mortgage Allows partial or full payment of the principal at any time, without penalty. [  top  ]

Portability A mortgage option that enables borrowers to take their current mortgage with them to another property, without penalty. A transfer fee may apply. [  top  ]

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. [  top  ]

Prepayment Privileges Voluntary payments in addition to regular mortgage payments. [  top  ]

Principal The amount borrowed or still owing on a mortgage loan. Interest is paid on the principal amount. [  top  ]

Refinancing Paying off the existing mortgage and arranging a new one or re-negotiating the terms and conditions of an existing mortgage. [  top  ]

Renewal Re-negotiation of a mortgage loan at the end of a term for a new term. [  top  ]

Second Mortgage Additional financing. Usually has a shorter term and higher interest rate than the first mortgage. [  top  ]

Term The length of time the interest rate is fixed. It also indicates when the principal balance becomes due and payable to the lender. [  top  ]

Title Legal ownership in a property. [  top  ]

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. [  top  ]

Vendor Take-Back Mortgage When the seller provides some or all of the mortgage financing in order to sell their property [  top  ]