Buying

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Glossary of Terms

Amortization Period

The actual number of years it will take to pay back your mortgage loan.


Appraised Value

An estimate of the value of the property. Conducted for the purpose of mortgage lending by a certified appraiser. This appraisal is not to be confused with a building inspection.


Assumability

Allows the buyer to take over the seller's mortgage on the property.


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.


Condominium Fee

A common payment among owners which is allocated to pay expenses.


Conventional Mortgage

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


Down Payment

The buyer's cash payment toward the property. The difference between the purchase price and the amount of the mortgage loan.


Equity

The difference between the home's selling value and the debts against it.


High-Ratio Mortgage

A mortgage that exceeds 75% of the home's appraised value. These mortgages must be insured for payment.


Interest Rate

The value charged by the lender for the use of the lender's money. Expressed as a percentage.


Land Transfer Tax, Deed Tax or Property Purchase Tax

A fee paid to the municipal and/or provincial government for the transferring of property from seller to buyer.


Maturity Date

The end of the term, at which time you can pay off the mortgage or renew it.


Mortgagee

The person or the financial institution that lends the money.


Mortgage Insurance

Applies to high-ratio mortgages. It protects the lender against loss if the borrower is unable to repay the mortgage.


Mortgage Life Insurance

Pays off the mortgage if the borrower dies.


Mortgagor

The borrower.


Open Mortgage

Allows partial or full payment of the principal at any time, without penalty.


Portability

A mortgage option that enables borrowers to take their current mortgage with them to another property, without penalty.


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.


Prepayment Privileges

Voluntary payments in addition to regular mortgage payments.


Principal

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


Refinancing

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


Renewal

Re-negotiation of a mortgage loan at the end of a term for a new term.


Second Mortgage

Additional financing. Usually has a shorter term and higher interest rate than the first mortgage.


Term

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


Title

Legal ownership in a property.


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.

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A real estate transaction is really about managing people, their desires and their finances. It is an intricate and consequential negotiation. Sandy knows that it is not only important to secure the most able buyer, but also the one that is most likely to close the deal when so much is at stake.


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