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GLOSSARY

Canadian Mortgage, Insurance and Financial Glossary

Words categorized under Financial-banking

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Acceleration Clause — Annuity in Arrears
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Annuity LadderBook Value
acceleration clauseDefinition (Financial-banking, Legal-contracts)
A provision within a document that explains how the lender expects payment for a loan, in due haste.
account agreementDefinition (Financial-banking, Legal-contracts)
An agreement that you sign and which lists your rights and responsibilities and the bank's rights and responsibilities for the bank account.
accounting methodDefinition (Financial-banking)
The method used by a business or individual to keep records. Most individuals and small businesses use the cash method, although businesses that maintain inventory are required to use the accrual method. See also "Accrual Method" or "Cash Method."
accounting period (AP)Definition (Financial-banking)
The time period used in a set of accounting books or financial statements, often 12 months.
accounts payable (A/P, AP)Definition (Investments, Financial-banking)
Money owed by a business for goods and services received.
accounts receivable (A/R, AR)Definition (Investments, Financial-banking)
Money owed to a business by purchasers of goods and/or services.
accrual methodDefinition (Investments, Taxation, Financial-banking)
Business accounting in which you report income in the year you earned it and expenses in the year you incur them, rather than reporting income and expenses when you receive payment or when you pay the expenses. Under this method, if you built a deck and billed the client in December 1999, the amount you charged would be reported in 1999 as income even if you didn't get the payment until January 2000. If you own a business that maintains an inventory, you are required to use the accrual method.
accrueDefinition (Mortgages, Financial-banking, Legal-contracts)
To gather together an amount often over a period of time.
accrued interestDefinition (Mortgages, Financial-banking)
Interest which has already been earned but has not yet been paid.
accumulation period (AP)Definition (Investments, Annuities, Financial-banking)
The period where an investor continues to put money into his or her investment(s).
acid-test ratioDefinition (Investments, Financial-banking)
A ratio that determines the liquidity of a company without requiring the company to sell assets or inventory.
acquiring financial institutionDefinition (Financial-banking)
Merchants must maintain an account with an acquiring financial institution to receive credit for credit card transactions. Daily credit card totals are deposited into the merchant's account minus any fees.
acquisition feeDefinition (Mortgages, Financial-banking)
A fee charged by some leasing companies for originating the loan, just as mortgage lenders charge points as an origination fee. This fee is often not specified in a contract, but rolled into the capitalized cost when calculating monthly payments.
active incomeDefinition (Taxation, Financial-banking)
Active income refers to wages, tips, and profits from your business or employment that you partake in. It also includes portfolio income such as interest and dividends, but you cannot usually offset active income with passive losses.
active participantDefinition (Financial-banking)
Actively enrolled in an employer's retirement plan.
actuarial tableDefinition (Investments, Insurance, Financial-banking)
A table used in actuarial science that outlines the statistical probability that an individual of a specific age and sex will die within a year.
actuaryDefinition (Investments, Insurance, Financial-banking)
An individual who assesses the mechanisms, mathematics and complexities of risk and uncertainty.
add-on interestDefinition (Mortgages, Financial-banking)
Interest that is computed at the beginning of the loan, then added to the principal, so that all must be repaid, even if the loan is paid off early.
additional principal paymentDefinition (Mortgages, Financial-banking)
Extra money included with a loan payment to pay off the amount owed faster. Over time, this practice reduces the amount of interest paid.
adjusted balanceDefinition (Financial-banking)
A method used by some card issuers in which they subtract all payments made during the month, then add the finance charges.
adjusted basisDefinition (Real-estate, Financial-banking)
The amount you use to determine your profit or loss from a sale or exchange of property.
adjusted cost basisDefinition (Insurance, Financial-banking)
The amount paid for an item, plus the amount paid for improvements, minus losses and depreciation. When the owner sells the item, the difference between the sales price and the adjusted cost basis is the profit or loss.
affinity cardDefinition (Financial-banking)
A credit card (usually Visa or MasterCard) that has a promotion arrangement with an affiliated organization (often a charity or non-profit group). The logo of the group appears on the card and the group usually gets a percentage of the sales made on the card.
agency (agcy)Definition (Investments, Mortgages, Real-estate, Insurance, Financial-banking, Abbreviation, Legal-contracts)
A relationship between two parties -- a client and an agent -- in which the agent represents the client in transactions with a third party.
agency closingDefinition (Mortgages, Real-estate, Financial-banking, Legal-contracts)
The use of a title company to supervise the meeting where the property is transferred and mortgage is settled.
agent (agt)Definition (Investments, Mortgages, Real-estate, Insurance, Financial-banking, Abbreviation, Legal-contracts)
A person who acts on behalf of another. In real estate, an agent is a person who conducts transactions on behalf of sellers and sometimes buyers.
Air MilesCompany
One of the most popular rewards issued by airline-affiliated co-branded cards. Air miles are earned with every use of the card, and then transferred monthly to the cardholder's account with that airline.
alimonyDefinition (Taxation, Financial-banking, Legal-contracts)
Monthly payments received by an ex-spouse. Payments must be received continuously for one year to be counted toward qualifying income for a loan.
alternative minimum tax (AMT)Definition (Taxation, Financial-banking, Legal-contracts)
This tax primarily affects high-income taxpayers who shelter some of their income from tax through certain tax preference items or deductions. It is often referred to in tax publications as AMT and, if your income meets the limit, you have to recalculate your tax due based on the separate alternative minimum tax rates and tables.
  ➥  Form T691.
American Express Company (AMEX, AXP)Company
A corporation known for its credit card business.
amortizationDefinition (Mortgages, Financial-banking)
Amortization refers to the process of gradually paying down the principal of a loan. Each payment toward the principal reduces your loan by that amount. This is different than an interest-only loan payment where the principal balance is never reduced. Amortization for a mortgage loan in Canada is normally 25 years, but can be as few as 5 years.
amortization periodDefinition (Mortgages, Financial-banking)
The amount of time it will take to pay off a mortgage by making routine payments.
amortization scheduleDefinition (Mortgages, Financial-banking)
A detailed table showing the amortization of a loan which includes the beginning principal amount, period payments, the interest portion of each payment, the principal reduction portion each payment, and the ending balance. The Canadian Equity Group has developed a mortgage rate calculator which will generate a perfect example of an amortization schedule.
amortization tableDefinition (Mortgages, Financial-banking)
A mathematical formula used to calculate monthly mortgage payments based on the borrowed loan amount, the interest rate, and the loan term.
amortization termDefinition (Mortgages, Financial-banking)
The time required to amortize (repay) an entire mortgage loan.
amortized loanDefinition (Mortgages, Financial-banking)
A loan that is completely paid off, interest and principal, by a series of regular payments that are equal or nearly equal.
amount financedDefinition (Mortgages, Financial-banking)
The principal that is financed. It could include the cost of the purchase and other items rolled into the payments.
angel investorsDefinition (Investments, Financial-banking)
Private individuals with capital to invest in business enterprises.
annexDefinition (Real-estate, Financial-banking, Legal-contracts)
To add one thing onto another.
annual administrative feeDefinition (Mortgages, Insurance, Financial-banking, Legal-contracts)
An annual (yearly) fee charged for the administration of a service.
annual crediting capDefinition (Investments, Financial-banking)
The highest rate that can be credited to an equity-indexed annuity in a year.
annual feeDefinition (Financial-banking)
A bank charge for use of a credit card levied each year, which can range from $15 to $300, billed directly to the customer's monthly statement. Many credit cards come without an annual fee.
annual percentage rate (APR)Definition (Mortgages, Financial-banking)
A yearly rate of interest that includes fees and costs paid to acquire the loan. Lenders are required by law to disclose the APR. The rate is calculated in a standard way, taking the average compound interest rate over the term of the loan, so borrowers can compare loans. In mortgages, it is the interest rate of a mortgage when taking into account the interest, mortgage insurance, and certain closing costs including points paid at closing. There is no APR in an automobile lease; instead, the cost of money is expressed as the money factor.
  ➥  A number used to compare costs associated with mortgage loans and other forms of financing.
annual percentage yield (APY)Definition (Investments, Financial-banking)
The percentage, required by Truth in Savings regulations, to be disclosed on interest-bearing deposit accounts that reflects the total interest to be earned based on an institution's compounding method, assuming funds remain in the account for a 365-day year.
annuitantDefinition (Investments, Annuities, Financial-banking)
An individual who owns or is the recipient of an annuity.
annuitizationDefinition (Investments, Estate-management, Annuities, Financial-banking)
The process of turning a retirement plan or annuity into income in the form of periodic payments or a single lump sum.
annuitization optionsDefinition (Investments, Estate-management, Annuities, Financial-banking)
The different income dispersal options available when annuitizing a retirement plan or annuity, such as the timeframe and list of beneficiaries.
annuityDefinition (Investments, Estate-management, Annuities, Financial-banking)
A financial instrument that disperses a number of payments over a set period of time.
annuity in advanceDefinition (Investments, Annuities, Financial-banking)
When payments are made at the start of a period as opposed to the end.
annuity in arrearsDefinition (Investments, Annuities, Financial-banking)
When payments are made at the end of a period as opposed to the start.
  Currently Displayed — Page 1
Acceleration Clause — Annuity in Arrears
  Next Page
Annuity LadderBook Value

Search the Glossary

Index of Financial-banking Terms

Page 1: Acceleration Clause
Annuity in Arrears
Page 2: Annuity Ladder
Book Value
Page 3: Boot
Central Bank
Page 4: Certified Cheque
Commutation
Page 5: Compound Interest
Debit Bureau
Page 6: Debit Card
Employment Insurance
Page 7: Encumbrance
Franchise
Page 8: Fresh Start
Informal Trust
Page 9: Initial Public Offering
Lease Option
Page 10: Leasehold
Minimum Average Balance to...
Page 11: Minimum Balance to Open an...
Online Debit Card
Page 12: Onus Item
Policy Loan
Page 13: Portfolio
Quantum Meruit
Page 14: Quick Assets
Right of First Refusal
Page 15: Roll In Loans
Step Up Lease
Page 16: Stock
Two-Tier Healthcare
Page 17: Unaffiliated Investments
Zero Balance

Notable Terms

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Below is a listing of our most popular mortgage product inquiries made using our online mortgage application for clients in Gatineau.

Mortgage Product Type Inquiries
Mortgage Pre-approval18.18%
First-time Home Buyer15.42%
Refinance/Consolidate Debt15.02%
No Money Down discontinued13.44%
New Purchase13.04%
Mortgage Renewal11.86%
Pre-approval5.93%
Other7.13%