This is the written history of your property. You can view at your local registry office at any time.
A provision in a loan agreement that allows the lender to require the balance of the loan to become due immediately if mortgage payments are not made or there is a breach in your obligation under your mortgage or note.
Any addition to, or modification of, a contract. Also called an amendment or rider.
An adjustable-rate mortgage is a mortgage whose interest rate and monthly payments vary throughout its life. ARM's typically start with an unusually low interest rate (see teaser rate) that gradually rises over time. If the overall level of interest rated drops, as measured by a variety of different indexes (see index), the interest rate of your ARM generally follows suit. Similarly, if interest rates rise, so does your mortgage's interest rate and monthly payment. Caps (see also periodic caps and lifetime caps) limit the amount that interest rates can fluctuate. Before you agree to an adjustable-rate mortgage, be sure that you can afford the highest payments that would result if the interest rate on your mortgage increased to the maximum allowed.
This refers to how often the interest rate for adjustable-rate mortgages changes. Some adjustable rate mortgages change every month, but it is more typical to have one or two adjustments per year. The less frequently your loan rate shift's, the less financial uncertainty you may have. But less frequent adjustments in your mortgage rate mean that you will probably have a higher teaser, or initial interest, rate. (The initial interest rate is also called the "start rate".)
This document is also known as the contract of purchase, purchase agreement, or sales agreement. It is the agreement by which the seller agrees to sell you his or her property if you pay a certain price. It contains all provisions and conditions for the purchase, must be written, and is signed by both parties.
The amount of time it takes to pay back the entire mortgage.
The method of paying back a loan by regular periodic payments. The payments are made up of both interest and principal portions. Amortization isn't to be confused with the term, which is the duration of a mortgage contract. When the amortization ends, the mortgage has been totally paid out but when the term ends, the outstanding balance is due (although most people simply refinance for another term).
This figure states, the total yearly cost of a mortgage as expressed by the actual rate of interest paid. The APR includes the base interest rate, points, and any other add-on loan fees and costs. The APR is thus variably higher than the rate of interest that the lender quotes for the mortgage.
A formal estimate of property value by a certified professional using disciplined technological method regulated by law and independent financial or personal interest in the amount of the estimate.
Appreciation refers to the increase of a property's value. Depreciation (the reverse of appreciation) is when a property's value decreases.
A method of solving contract disputes that is generally less costly and faster than going to a court of law. In arbitration, buyers and sellers present their differences to a neutral arbitrator who, after hearing the evidence, makes a decision that resolves the disagreement. The arbitrator's decision is final and may be enforced as if it were a court judgement. Consult a real estate lawyer if you are ever a party in arbitration.
This is the price placed on the property for sale by the seller.
The assessed value is the value of your property (according to your local county tax assessor) for the purpose of determining your property taxes.
This is the transfer of ownership of a mortgage from one mortgagee to another.
The act of assuming liability, for an existing mortgage on a property by the purchaser of that property.
If you assume a mortgage when you purchase a home, you undertake to fulfill the obligations of the existing loan agreement the seller made with the lender. The obligations are similar to those that you would incur if you took out a new mortgage. When assuming a mortgage, you become personally liable for the payment of principal and interest. The seller, or original mortgagor, is released from the liability, and should get that release in writing. Otherwise, he or she could be liable if you don't make the monthly payments.
The narrowest aspect of the home faces the road and the stairways are at the back of the house.
A type of mortgage which is generally short in length, but is amortized over twenty-five or thirty years so that the borrower pays a combination of interest and principal each month. At the end of the term, the entire balance of the loan must be repaid at once.
This is one mortgage, which blankets or covers more than one piece of property.
Payments consisting of principal and interest components paid during the amortization period of a mortgage.
This is when there is a failure to perform part or all promises of a contract.
If you find yourself in the inadvisable situation where you have closed on a new home before you have sold your old one, you may need a short-term bridge loan. Such loans enable you to borrow against the equity that is tied up in your old house until it sells.
A person licensed by provincial or territorial government to trade in real estate. Real estate brokers may form companies or offices which appoint sale representatives to provide services to the seller or buyer, or they may provide the same service themselves.
The amount charge by a mortgage broker for arranging your mortgage. Mortgage brokers can sometimes find mortgage money where conventional lenders can't.
A demand or claim charged against the property's title for any work or materials that haven't been paid for during the home's construction. It is considered a "cloud" against title.
The exact distance from the front, back, or side of a lot beyond which construction or improvements may not extend without permission from the proper governmental authority. The building line may be established by a filed plat of subdivision, by building codes, or by zoning ordinances.
This is a home with one floor building with a basement.
A written agreement between the buyer and buyer's agent, outlining the agency relationship between the two parties and the manner in which the buyer's agent will be compensated.
This is a person or firm that represents the buyer. A Buyer's Agent primary allegiance is to the buyer. The buyer is the Buyer Agent's client.
Market conditions that favor the buyer. A buyer's market is usually expressed when there are too many homes for sale, and a home can be bought for less money.
A warning or notice to interested parties that there's a claim against the property.
The most money a purchaser will ever pay versus the floor price or least amount a vendor is willing to accept.
This is a home that was built over one hundred years ago.
A documents or instrument issued by a local government agency to a homeowner, naming the homeowner as the owner of a specific piece of property. At the sale of the property, the certificate of title is transferred to the buyer. The agency then issues a new certificate of title to the buyer.
This is the lineage (who all owned) of ownership of a particular property.
This is movable personal property, such as a car, stove, or furniture.
A mortgage that can't be paid out until the term expires. Currently, shorter terms are very common. Conversely, an open mortgage can be paid off early if the purchaser decides to, without incurring any penalties. Rates are higher for open mortgages.
This type of mortgage has a fixed term. There is a penalty imposed of the mortgagor wished to discharge this loan before the end of its term.
The closing date of a transaction is the day that the full price is paid and the deed is delivered along with any other necessary details involved in completing the transfer of property.
(statement of adjustments) A summary of money owing and owed prepared for both the seller and the buyer.
This is an outstanding claim or claims on title of the property. These must be settled before a transfer is completed.
CMHC stands for Canada Mortgage and Housing Corporation. A Crown corporation providing information services and mortgage loan insurance.
This is a large home with pillared entrances.
This is something that must be done before the contract is judged binding. For example, "subject to the sale of the purchaser's home."
These are separately owned units of a multi-unit building that each unit has its own title.
This is either a change in price or an incentive that encourages a party to enter into a contract. Consideration can be in the form of money, profit or interest.
A provision in a contract that sets forth one or more conditions that must be met prior to closing. If the contingency is not met, usually the party who is benefiting from the contingency can terminate the contract. Some common contingencies include financing, inspection, attorney approval, and toxic substances.
A legally binding agreement between competent parties to perform or not perform specific actions.
This is the transfer of property to the purchaser utilizing the required documentation.
This is a multi-unit building that is owned by members of a group. Each member possesses shares in the building.
When the seller or buyer responds to a bid. If you decide to offer $100,00.00 for a home listed at $150,000.00, the seller might counter you offer and propose that you purchase the home for $140,000.00. That new proposal, and any subsequent offer, is called a counteroffer.
This is a rural property surrounded by fields.
Assurances or promises set our in the deed or a legally binding contract, or implied in the law. For example, when you obtain title to a property by warranty, there is the Covenant of Quiet Enjoyment, which gives you the right to enjoy your property without disturbances.
A lender will decide whether or not to give you a loan based on your credit history. A credit report lists all of your credit accounts (such as charge cards), and any debts or late payments that have been reported to the credit company.
This is a street that ends in a U-shape, leading the driver or pedestrian back to the beginning.
This real estate talk used to describe how attractive a house appears from the outside.
This is a house builder who builds homes for individual owners to the owner's specification. The house builder may either own a piece of property or build a home on someone else's land.
Before you go out buying, you should determine what your price range is. Lenders generally figure that you shouldn't spend more than about 33 to 40 percent of your monthly income for your housing costs. The debt-to-income ratio measures your future monthly housing expenses, which include your proposed mortgage payment (debt), property tax, and insurance, in relation to your monthly income.
A deed is the document that conveys title to real property.
Default is the failure to make your monthly mortgage payments on time. You are officially in default when you have missed two or more monthly payments. Default also refers to other violations of the mortgage terms. Default can lead to foreclosure on your house.
At first you become delinquent; then you are in default. Delinquency occurs when a monthly mortgage payment is not received by the due date.
Money given by the buyer to the seller with a signed contract to purchase or offer to purchase.
This is the lowering of value of your property. Depreciation is caused by wear and tear or by changes in public taste. Some types of depreciation can be remedied (replacing a roof) but some types can't (undesirable style).
To pay off the entire mortgage loan.
This is the legal means of passing on an interest or share of real estate to a deceased husband's widow.
The cash put into a purchase by the borrower. Lenders like to see the borrower put at least 25 percent down in cash, because lenders generally believe that if you have a higher cash down payment, it is less likely the home will go into foreclosure. In recent years, however, lenders have become more flexible about cash down payments; lenders have begun accepting cash down payments of as little as 5 percent.
A real estate broker or salesperson who acts as agent for both the seller and the buyer in the same transaction. Both the buyer and the seller are the agent's client.
This refers to the date when mortgages must be either paid in full or another term negotiated through a renewal agreement.
A due-on-sale clause contained in the mortgage entitles the lender to demand full payment of all money due on your loan when you sell or transfer title to the property.
This is a tow family structure, where each facility is complete.
A right of land given by a landowner to a third party to make use of the land in a specific way. There may be several easements on your property, including for passage of utility line or poles, sewer or water mains, and even a driveway. Once the right is given, it continues indefinitely, or until released by the party who received it.
When your neighbour builds a garage or a fence, and it occupies your land, it is said to "encroach on" your property.
The mortgagor's right to pay off the mortgage in full and become full owner of the property.
The net value of the property after mortgage loans, claims and liens, etc. are deducted.
When an owner of property dies and leaves no heirs. The property then returns to the state or crown.
This is to hold documents, or money, etc. until a certain happening and then releasing the documents, money, etc.
This mean clear title, you have absolute ownership of your property (subject to expropriation, liens, etc.).
This is a mortgage that takes priority over all other voluntary liens.
The fixed-rate mortgage is the granddaddy of all mortgages. You lock into an interest rate and it never changes during the term of you 15- or 30- year mortgage. Your mortgage payment will be the same amount each and every month.
Personal property, such as a built-in bookcase, furnace, hot water heater, and recessed lights, that becomes "affixed" because it has been permanently attached to the home.
The legal action taken so extinguish a homeowner's right and interest in a property, so that the property can be sold in a foreclosure sale to satisfy a debt.
A letter to the lender indicating that a gift of cash has been made to the buyer and that it is not expected to be repaid. The letter must detail the amount of the gift, and the name of the giver.
The period of time after a loan payment due date in which a mortgage payment may be made and not be considered delinquent.
This is a mortgage in which the payments increase over the life of the mortgage, allowing the borrower to make very low payments at the beginning of the loan.
Gross debt service divided by household income. The GDS should not exceed 30%. It is also referred to as PIT (Principal Interest and Taxes) over income. Sometimes energy costs are added to the formula, producing PITE, which moves the GDS to 32%.
The amount of money needed to pay principal, interest, taxes and sometimes energy costs. If the dwelling unit is a condominium, all or a portion of common fees are included, depending on what expenses are covered.
A second party, who signs for your mortgage and who provides backup liability in case of default on your payments. Guarantor are only required in certain instances. For instance, a guarantor may be stipulated when you're new to the work force and have little collateral when applying for a mortgage.
This is insurance that covers the property from damages that might materially affect its value. Also known as homeowner's insurance.
A home-equity loan is technical talk for what used to be called a second mortgage. With this type of loan, you borrow against the equity in your house. If used wisely, a home-equity loan can help people pay off high-interest consumer debt, which is usually at a higher interest rate than that of a home-equity loan. A home-equity loan can also be used for other short-term needs, such as for payments on a remodeling project.
This is coverage that includes hazard insurance, as well as personal liability and theft.
The following should be inspected: overall condition of the property, inside and out; electrical, heating, and plumbing systems; foundation; roof; pest control and dry rot; and seismic/slide risk.
This is a legal document, for example the deed in an instrument.
Interest is what lenders charge you to use their money. Lenders generally charge higher rates of interest on higher-risk loans.
An equal, undivided ownership in a property, taken by two or more owners. Under joint tenancy there are rights of survivorship, which means that if one of the owners dies, the surviving owner rather that the heirs of the estate inherits the other's total interest in the property.
A formal award granted by the courts to a party involved in an action or suit.
This is the trees, flowers, plantings, lawn, and shrubbery that surround the exterior of a dwelling.
This is a penalty applied to a mortgage payments that after the grace period.
When the renter or lessee of a piece of property has right to purchase the property for a specific period of time at a specific price. Usually, a lease with an option to buy allows a first-time buyer to accumulate a down payment by applying a portion of the monthly rent toward the down payment.
A written description definitely describing the property and acceptable for registration.
This is a person, company, corporation, or entity that lends money for the purchase of real estate.
A formal statement, usually in letter form, from the buyer to the seller stating that the buyer intends to purchase a specific piece of property for a specific price on a specific date.
Using a small amount of cash, say a 10 or 20 percent down payment, to purchase a piece of property.
This is an encumbrance against the property, which may be voluntary or involuntary. Types of property liens include the following; tax liens (for unpaid federal, provincial, or real estate taxes), judgment liens (for monetary judgments by a court of law), a mortgage lien (when you take out a mortgage), and a construction lien (for work done by a contractor on the property that has not been paid for). For a lien to be attached to the property's title, it must be filed or recorded with local sheriff's office.
This is a written document that states that a mortgage company has agreed to lend a buyer a certain amount of money at a certain rate of interest for a specific period of time, which may contain sets of conditions and a date by which the loan must close.
This is a one-time fee charged by the Mortgage Company to arranging the financing of the loan.
This is an amount of money that is lent to a borrower, who agrees to repay it plus interest.
The ratio of the amount of money you wish to borrow compared to the value of the property you wish to purchase. Institutional investors (who buy loans on the secondary market from your mortgage company) set up certain ratios that guide lending practices. For example, the Mortgage Company might only lend you 80 percent of property's value.
This is where the property is geographically situated. "Location, location, location" is a broker's maxim that states that where the property is located is its most important feature, because you can change everything about a house, except its location.
This is when a borrower signals to a mortgage company that he or she has decided to lock in, or take, a particular interest rate for a specific amount of time. The mechanism by which a borrower locks in the interest rate that will be charged on a particular loan. Usually, the lock lasts for a certain time period, such as thirty, forty-five, or sixty days. On a new construction, the lock may be much longer.
Law Society of Upper Canada. This is the Society that governs and regulates the Lawyers.
The monthly or annual fee charged to condo, co-op, or town house owners, and paid to the homeowner's association, for the maintenance of common property. Also called an assessment.
The amount a purchaser is willing to pay a vendor for his property. As with property appraisals, the market is changeable.
A situation in which the position of your structure and/or neighboring structures has crossed the property line. It most often applies to fences.
A misrepresentation is a false statement of fact and must be avoided when advertising or selling your home. "Negligent misrepresentation" is false information given by a qualified person (a real estate agent, a building inspector, etc.). Because of the person's assumed skills, he or she may be held liable for false representations.
These are trademarks owned by The Canadian Real Estate Association. They are used in conjunction with a real estate database service operated by local real estate boards, under which properties may be listed, purchased or sold.
A vague term used in some agreements for sale to indicate the quantity or extent of the owner's property.
A mortgage broker is a person who can help you find a mortgage.
In Canada, either CMHC or private insurers must insure any high-ratio mortgages, (those representing greater than 75% of the property value) against default. The borrower must arrange to pay for the insurance, which protects the lender against default.
Mortgage life insurance guarantees that the lender will receive its money in the event that you meet an untimely demise. Many people may try to convince you that you need this insurance to protect your dependants and loved ones. We recommend that you do not waste your time or money with this insurance. Mortgage life insurance is expensive. If you need life insurance, buy low-cost, high-quality term life insurance rather than mortgage insurance.
The loan issued that uses your property as security. Mortgagor - This is the borrower of the money. Mortgagee - This is the bank of lender.
A legal term for the lender.
A condition created when the monthly mortgage payment is less than the amount necessary to pay off the loan the period of time set forth in the note. Because you're paying less that the amount necessary, the actual loan amount increases over time. That's how you end up with negative equity. To pay off the loan, a lump-sum payment must be made.
A phrase used in agreements to signify that certain actions constitute the agreement as having no validity or legal effect.
This type of mortgage has a fixed term. There is no penalty imposed if the mortgagor wishes to discharge this loan before the end of its term.
When a buyer pays for the right or option to purchase property for a given length of time, without having the obligation to actually purchase the property.
This is the absolute right to use, enjoy, and dispose of property. You own it.
Slang usage that refers to the mortgage; trust deed, installment, and land contract.
The wall separating two properties such as condominiums, row houses, etc.
This is the part of the property, which are not fixed, such as appliances, furniture and rugs.
This is an acronym for Principal-Interest-Taxes-and-Insurance. These are usually the four parts of your monthly mortgage payment.
Borrowers who do not want to have a real estate tax or insurance escrow administered by the mortgagee can, in some circumstances, pledge a savings account into which enough money to cover real estate taxes and the insurance premium must be deposited. You must then make the payments for your real estate taxes and insurance premiums from a separated account. If you fail to pay your taxes or premiums, the lender is allowed to use the funds in the pledged account to make those payments.
Being in control of a piece to property, and having the right to use it to the exclusion of all others.
This is the legal authorization given to an individual to act on behalf of another individual.
Interest paid at closing for the number of day left in the month after closing. For example, if you close on the 15th, you would prepay the interest for the 16th through the end of the month.
A fine imposed when a loan is paid off before it comes due. Many states now have laws against prepayment penalties, although banks with federal charters are exempt from provincial laws. If possible, do not use a mortgage that has a prepayment penalty, or you will be charged a fine if you sell your property, or you will be charged a fine if you sell your property before your mortgage has been paid off.
When a mortgage company tells a buyer in advance of the formal application approximately how much money the buyer can afford to borrow.
A deed that operates to release any interest in a property that a person may have, without representation that he or she actually has a right in that property.
Trademark identifying real estate professionals in Canada who are members of The Canadian Real Estate Association.
The Real Estate business and Brokers Act. The legislation in Ontario that licenses regulates and governs the trade of Real Estate Agents and Brokers. REBBA is Schedule B to the Consumer Protective Statue Law Amendment Act, 2002.
Refinance, or "re-fi", is a fancy word for taking out a new mortgage loan (usually at a lower interest rate) to pay off an existing mortgage (generally at a higher interest rate). Refinancing is not automatic, nor is refinancing guaranteed. Refinancing can also be a hassle and expensive. Carefully weigh the costs and benefits of refinancing.
A fee paid in advance of performance to reserve the services of an agent, sometimes credited against service charges.
The return on investment is the percentage of profit that you make on an investment. If you put $1,000.00 into an investment and in one year your account is worth $1,100.00, you have made a profit of $100.00. Your return is the profit ($100.00) divided by the initial investment ($1,000.00) equals 10 percent.
A reverse mortgage enables elderly homeowners, typically who are low in cash, to tap into their home's equity without selling their home or moving from it. Specifically, a lending institution makes a check out to you each month, and you can use the check as you want. This money is really a loan against the value of your home; because the money that you receive is a loan, the money is tax-free when you receive it. The downside of these loans is that they deplete your equity in your estate, the fees and interest rates tend to be on the high side, and some require repayment within a certain number of years.
This is what happens when your purchaser withdraws the offer before you formally accept it. The contract is then legally cancelled.
The right of one property owner to pass over the land of another property owner which is established by an easement or a licensed agreement.
A transaction in which the seller sells property to a buyer, who then leases the property back to the seller. This is accomplished within the same transaction.
This is the document by which a buyer contracts to purchase property. Also known as the purchase contract of a contract to purchase.
Mortgages registered secondly and thirdly on a title after the first mortgage. These mortgages have second and third call on funds if the mortgage goes into default and the property must be sold. These are sometimes known as equity loans.
A mortgage that is obtained after the primary mortgage, and whose rights for repayment are secondary to the first mortgage.
Those listed on legal deeds as owners of the property. If any of the parties involved cannot be present, or is incapable of signing the purchase agreement, a legal power of attorney must be given to the other party, the lawyer, or third party who will act on that person's behalf.
The Seller's Agent represents the seller. They act either as a listing agent under the listing agreement with the seller of by cooperating as a sub-Agent, typically through the MLS system. In dealing with prospective buyers, (customers) the Seller's Agent provide a variety of information and services to assist the buyer in his/her decision making. The Seller's Agent does not represent the buyer.
The end units on row or town houses.
Two houses built on either side of a common centre wall.
The longest aspect faces the road and the stairways are at the sides of the house.
Houses incorporating different levels of floors linked by short stairways can by two, three or four levels.
The statement given by the lawyer after the sale is completed showing how the money paid by the purchaser is shown on the ledger.
A single story house, with a dormer living space in the roof with angled ceilings.
This is the division of a large piece of property into several smaller pieces. Usually a developer or a group of developers will build single family or duplex homes of a similar design and cost within a single subdivision.
This is a plan of a parcel of land showing accurate measurements of its area.
When the vendor decides to become a mortgagee for his property, this is known as "taking back" a mortgage.
A lien that is attached to property if the owner does not pay his or her real estate taxes or federal income taxes. If overdue property taxes are not paid, the owner's property might be sold at auction for the amount owed in back taxes.
A public auction of property for non-payment of assessed taxes.
This is a type of ownership in which two or more parties have an undivided interest in the property. The owners may or may not have equal shares of ownership, and there are no rights of survivorship. However, each owner retains the right to sell his or her share in the property as her or she sees fit.
This refers to the space of time mortgage funds are borrowed, on the expiry date the debt obligation is either paid in full or a new term negotiated.
This is the prescribed length of time during which the mortgage agreement exists. At the end of each term a new term can be negotiated at the rates of interest current at the time of negotiation
A phrase used in an agreement of purchase and sale calling for punctual performance on stated dates with failure to comply resulting in a potential breach of contract unless otherwise agreed in writing.
Refers to the ownership of a particular piece of property.
This is the corporation or company that insures the status of title (title insurance) through the closing, and may handle other aspects of the closing.
Insurance that protects the lender and the property owner against losses arising from defects or problems with the title to property.
Also known as Row houses. Two houses or more houses attached side by side sharing walls.
This is to convey property from one person to another person.
This is a house with two complete floors.
This is a person who underwrites a loan for another. Your lender will have an investor underwrite your loan.
A type of mortgage with varying payments throughout the term, depending on the fluctuating interest rates. Of all mortgages, it's an attractive on for gamblers. That is, variable mortgages are great when interest rates are declining but if they suddenly take off, each payment could be higher than the last.
This is the person who is selling the property.
A contract that was never legally binding so can't be enforced. An avoidable contract, on the other hand, is considered in existence until one of the parties denies to tries to reject it.
This is a lien, such as a mortgage, that a homeowner elects to grant to lender.
This is the surrender or relinquishment of a particular right claim or privilege.
A legally binding promise given to the buyer at closing by the seller, generally regarding the condition of the home, property, or other matter.
A person subscribing his or her name for the purpose of attesting to a document's authenticity and proving he or she saw the parties place their signatures on the document.
The right of the local municipal government to decide how different areas of the municipality will be used. Zoning ordinances are the laws that govern the use of the land.