| Amortization: |
The
number of years it will take to pay off the
entire amount of a mortgage. In Ontario, most
mortgages are amortized over 25 years. |
| Appraisal: |
An
estimate of a property's market value. This
is used by lenders to determine the amount
of your mortgage. |
| Assessment: |
The
value of a property set by the local municipality.
The assessment is used to calculate your property
tax. |
| Assumable Mortgage: |
A mortgage held on a property by a seller that
can be taken over by the buyer. The buyer then
assumes responsibility for making payments. An
assumable mortgage can make a property more attractive
to potential buyers. |
| Blended
Mortgage Payments: |
Equal
or regular mortgage payments consisting of
both a principal and an interest component. |
| Broker: |
A
real estate professional licensed in Ontario
to facilitate the sale, lease or exchange of
a property. |
| Bridge
Financing: |
Money
borrowed against a homeowner's equity in a
property (usually for a short term) to help
finance the purchase of another property or
to make improvements to a property being sold. |
| Buy-down: |
A
situation where the seller reduces the interest
rate on a mortgage by paying the difference
between the reduced rate and market rate directly
to the lender. Or, the difference can be paid
to the purchaser in one lump sum or monthly
instalments. A buy-down can make a property
more attractive to potential buyers. |
| Closed
Mortgage: |
A
mortgage that cannot be prepaid, renegotiated
or refinanced during its term without significant
penalties. |
| Conventional
Mortgage: |
A
first mortgage issued for up to 75 per cent
of the property's appraised value or purchase
price, whichever is lower. |
| Debt
Service Ratio: |
The
percentage of a borrower's gross income that
can be used for housing costs (including mortgage
payments and taxes). This is used to determine
the amount of monthly mortgage payment the
borrower can afford. |
| Easement: |
A
legal right to use or cross (right of way)
another person's land for limited purpose.
A utility's right to run wires or lay pipe
across a property is a common example. |
| Encroachment: |
An
intrusion onto an adjoining property. A neighbour's
fence, shed or overhanging roof line that partially
or fully intrudes onto your property are examples. |
| First
Mortgage: |
The
first security registered on a property. Additional
mortgages secured against the property are
termed 'secondary'. |
| High-Ratio
Mortgage: |
A
mortgage for more than 75 per cent of a property's
appraised value or purchase price. |
| Listing
Agreement: |
The
contract between the listing broker and an
owner, authorizing the Realtor to facilitate
the sale or lease of a property. |
| Mortgage: |
A
contract between a borrower and a lender where
the borrower pledges a property as security
to guarantee repayment of the mortgage debt. |
| Mortgage
Term: |
The
length of time a lender will loan mortgage
funds to a borrower. Most terms run from six
months to five years, after which the borrower
will either pay off the balance or renegotiate
the mortgage for another term. Payments are
calculated using the interest rate offered
for the term, the amount of the mortgage, and
the amortization period. |
| Multiple
Listing Service (MLS): |
A
comprehensive system for relaying information
to Realtors about properties for sale. |
| Open
Mortgage: |
A
mortgage that can be prepaid or renegotiated
at any time and in any amount without penalty. |
| Partially
Open Mortgage: |
A
mortgage that allows the borrower to pre-pay
a specific portion of the mortgage principal
at certain times with or without penalty. |
| Realtor: |
A
trademarked name describing real estate professionals
who are members of a local real estate board
and the Canadian Real Estate Association. |
| Transfer
Taxes: |
Payment
to the provincial government for transferring
property from the seller to the buyer. |
| Vendor
Take-Back Mortgage: |
A
situation where sellers use their equity in
a property to provide some or all of the mortgage
financing in order to sell the property. |
| Zoning
Regulations: |
Strict guidelines set and enforced by municipal
governments regulating how a property may or
may not be used.
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