Real Estate Glossary Of Terms

• Mortgage Insurance - (Canada Mortgage and Housing Corporation) CMHC applies to the 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.

• Portability - A mortgage option that enables the borrowers to take their current mortgage with them to another property without penalty.

• Pre-approved Mortgage - Qualifies the buyer for a mortgage before you start shopping for a home so you’re aware how much you can spend.

• Pre-payment 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 proncipal amount.

• Refinancing - Paying off the existing mortgage and arranging a new one or renegotiating the terms and conditions of an existing mortgage.

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

• Second Mortgage - Additional financing on the home. Typically it has a shorter term and a 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 of the 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.

• Vendor Take Back Mortgage - The seller provides some or all of the mortgage financing in order to sell their property.