Canadian Mortgage, Insurance and Financial Glossary

Words categorized under Mortgages

abandonment — Definition (Mortgages, Real-estate)

A disclaimer of ownership by the trustee or debtor in property deemed burdensome or inconsequential. Once property has been "abandoned" it is no longer the property of the estate and creditors can seek to recover their money.

abstract of title (ab) — Definition (Mortgages, Real-estate, Abbreviation, Legal-contracts)

A written history of all the transactions that bear on the title to a specific piece of land. An abstract of title covers the time from when the property was first sold to the present.

  ➥  AB is a common abbreviation for Abstract of Title when used in property listings and real estate classifieds.

acceptance — Definition (Mortgages, Real-estate, Legal-contracts)

A property seller's formal, written approval of a buyer's offer.

Accredited Mortgage Professional (AMP) — Canada

The Accredited Mortgage Professional (AMP) is the only national proficiency standard created by CAAMP for Canada's mortgage industry.

  ➥  Accreditation offered by Canadian Association of Accredited Mortgage Professionals (CAAMP).

accrue — Definition (Mortgages, Financial-banking, Legal-contracts)

To gather together an amount often over a period of time.

accrued interest — Definition (Mortgages, Financial-banking)

Interest which has already been earned but has not yet been paid.

acquisition fee — Definition (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.

add-on interest — Definition (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 payment — Definition (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.

additional property — Definition (Mortgages, Real-estate)

A property that is owned by the person that is not being financed.

adjustable-rate mortgage (ARM) — Definition (Mortgages)

A type of mortgage loan program in which the interest rate and payments may be adjusted as frequently as every month. The principal loan balance or term of the loan may also be adjusted to reflect the rate change. The purpose of the program is to allow mortgage interest rates to fluctuate with market conditions.

  ➥  A type of variable rate mortgage product.

adjustment period — Definition (Mortgages)

The time between changes in the interest rate in an adjustable-rate mortgage.

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 closing — Definition (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.

alienation clause — Definition (Mortgages, Real-estate, Legal-contracts)

A requirement that the borrower pay the mortgage in full upon transfer of the property.

alternative mortgage — Definition (Mortgages)

A home loan that is not a standard fixed-rate mortgage.

amortization — Definition (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 period — Definition (Mortgages, Financial-banking)

The amount of time it will take to pay off a mortgage by making routine payments.

amortization schedule — Definition (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 table — Definition (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 term — Definition (Mortgages, Financial-banking)

The time required to amortize (repay) an entire mortgage loan.

amortized loan — Definition (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 financed — Definition (Mortgages, Financial-banking)

The principal that is financed. It could include the cost of the purchase and other items rolled into the payments.

annual administrative fee — Definition (Mortgages, Insurance, Financial-banking, Legal-contracts)

An annual (yearly) fee charged for the administration of a service.

annual mortgage statement — Definition (Mortgages, Taxation)

A report sent to the borrower every year, detailing how much principal remains on the home loan and how much was paid in taxes and interest during the previous year.

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.

application fee — Definition (Mortgages, Financial-banking)

What the lender charges to process the document in which a prospective borrower details his or her financial situation to qualify for a loan.

appraisal — Definition (Mortgages, Real-estate)

An estimate of the market value of a piece of real estate made by a competent professional who knows local real estate prices and markets.

appraisal fee — Definition (Mortgages, Real-estate)

What someone charges to deliver a professional opinion about how much a property is worth.

appraisal report — Definition (Mortgages, Real-estate)

A detailed evaluation of the value of a property based on an inspection and a review of the values of nearby, comparable properties.

appraised value — Definition (Mortgages, Real-estate)

An educated opinion of how much a property is worth.

appraiser — Definition (Mortgages, Real-estate)

A person qualified by education, training, and experience to estimate the value of real property and personal property.

approval — Definition (Mortgages, Real-estate, Financial-banking)

An assessment made by a lender of a borrower's ability to pay for a home and a confirmation of the amount the borrower may obtain.

assessed value (AV, ast) — Definition (Mortgages, Real-estate, Taxation, Abbreviation)

A municipal or provincial government's determination of a property's worth for tax purposes.

assessment rolls — Definition (Mortgages, Real-estate, Taxation)

Lists of taxable property.

asset — Definition (Mortgages, Insurance, Financial-banking, Legal-contracts)

Anything of monetary value that is owned by a person. Assets include real property, personal property, and enforceable claims against others including bank accounts, stocks, mutual funds, and so on.

assignment — Definition (Mortgages)

The transfer of a mortgage from one person to another.

assumability — Definition (Mortgages, Real-estate)

The ability of a mortgage to be taken over from the original borrower by a new borrower.

assumable — Definition (Mortgages, Real-estate)

A loan or obligation that can be taken over by a new borrower.

assumable mortgage — Definition (Mortgages, Real-estate)

A mortgage that can be taken over or "assumed" by the buyer when a home is sold.

assumption clause — Definition (Mortgages, Real-estate, Legal-contracts)

A provision in a mortgage contract that allows a buyer to take responsibility for the loan from the seller.

assumption fee — Definition (Mortgages, Real-estate, Legal-contracts)

A lender's charge for updating records when a buyer takes responsibility for a mortgage from the seller.

automatic payment — Definition (Mortgages, Financial-banking)

An arrangement that authorizes periodic withdrawals to be made from a chequing or savings account to pay bills, usually regular monthly payments such as for rent or mortgages.

bad credit — Definition (Mortgages, Financial-banking)

Someone who carries a higher credit risk.

bad debt — Definition (Mortgages, Taxation, Financial-banking)

Money that cannot be collected is considered bad debt. Businesses can deduct bad debts under certain circumstances. If a bad debt is personal, it can also be deducted in some instances as a short-term capital loss.

balloon loan — Definition (Mortgages, Financial-banking)

A loan in which the payments aren't set up to repay the loan in full by the end of the term. At the end comes the balloon payment -- one that is larger than the other, periodic payments and pays off the remaining principal.

balloon mortgage — Definition (Mortgages)

A loan that has regular monthly payments which amortize over a stated term but call for a final lump sum (balloon payment) at the end of a specified term, or maturity date, such as 10 years.

balloon payment — Definition (Mortgages, Financial-banking)

A loan instalment that is larger than the other, periodic payments and pays off the remaining principal.

bank — Definition (Mortgages, Financial-banking)

An institution that acts as a financial intermediary by receiving money from depositors and lenders and also lending to borrowers.