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GLOSSARY
Terms
often
used
during
the
home
buying
process:
?
Amortization
Period
The
number
of
years
that
it
will
take
you
to
pay
back
your
entire
mortgage
loan.
?
Appraised
Value
An
estimated
value
of a
property
that
is
completed
by a
certified
appraiser
for
mortgage
financing.
?
Assumability
When
the
buyer
is
allowed
to
take
over
(or
assume)
the
seller's
mortgage,
which
is
already
in
place
on
the
property.
?
Balanced
Market
Where
demand
for
property
equals
the
supply
of
available
property.
Sellers
usually
accept
reasonable
offers
and
houses
generally
sell
in
sufficient
time
periods.
Prices
remain
stable
and
there
is
usually
a
good
number
of
homes
to
choose
from.
?
Buyer
Brokerage
Service
Where
a
buyer
retains
the
broker
[D'Arcy]
by
way
of a
written
agreement
to
find
real
estate
which
the
buyer
may
be
interested
in
purchaseng
or
leasing
and
to
assist
the
buyer
in
negotiating
the
terms
of
the
purchase
or
lease.
?
Buyer's
Market
There
is a
high
number
of
homes
to
choose
from
and
few
buyers
in
comparison.
Prices
of
homes
tend
to
be
lower
and
they
remain
available
for
sale
longer.
Buyers
usually
have
more
leverage
in
negotiating
a
purchase.
?
Closed
Mortgage
A
mortgage
loan
that
has
a
locked-in
payment
schedule,
which
does
not
vary
over
the
life
of
the
closed
term.
A
buyer
who
uses
a
closed
mortgage
will
likely
have
to
pay
the
lender
a
penalty
if
you
fully
repay
the
loan
before
the
end
of
the
closed
term.
?
Conventional
Mortgage
A
mortgage
loan
that
is
issued
for
up
to
75%
of
the
property's
appraised
value,
or
the
property's
purchase
price,
whichever
is
lower.
The
buyer
must
have
25%
or
more
of
the
lower
value
as a
down
payment.
?
Conveyancing
The
transfer
of
ownership
of
any
property
or
real
estate
from
one
person
to
another.
?
Down
Payment
This
is
the
difference
between
the
purchase
price
and
the
total
amount
of
the
mortgage
loan,
which
represents
the
buyer's
cash
payment
towards
the
purchase
of a
property.
?
Equity
The
difference
between
a
property's
market
value
for
selling
and
the
mortgage
plus
other
debts
taken
against
the
property.
?
High-Ratio
Mortgage
When
a
mortgage
loan
exceeds
75%
of
the
home's
appraised
value.
These
types
of
loans
are
typically
used
by
first
time
buyers
and
must
be
insured
for
payment.
?
Interest
Rate
A
figure
expressed
as a
percentage
as
the
value
that
is
charged
by
the
lender
for
use
of
the
lender's
money.
?
Maturity
Date
The
end
of
the
term
of
your
mortgage
loan.
At
this
time,
the
buyer
can
pay
off
the
entire
mortgage
loan
balance
or
renew
it
for
a
longer
term.
?
Mortgagee
The
individual
or
financial
institution
that
lends
the
money
for
the
purpose
of a
mortgage
on
property.
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?
Mortgage
Insurance
Insurance
purchased
to
protect
the
lender
against
loss
from
the
borrower
being
unable
to
make
payments
on
the
mortgage
loan.
?
Mortgage
Life
Insurance
Insurance
purchased
to
protect
the
mortgagor
from
the
mortgage
loan
debt
if
the
mortgagee
dies.
If
he/she
dies,
the
mortgage
loan
is
paid
off
by
the
insurance
company.
?
Mortgagor
The
person
who
borrows
from
a
financial
institution
to
finance
a
property
or
home
purchase.
?
Open
Mortgage
A
type
of
mortgage
loan
where
the
borrower
can
make
a
partial
or
full
payment
of
the
principal
amount
at
any
time,
without
penalty.
?
Portability
An
option
available
on a
mortgage
that
enables
the
mortgagor
to
take
their
current
mortgage
loan
with
them
to
another
property
without
penalty.
?
Pre-Approved
Mortgage
When
a
lender
approves
the
potential
mortgagor
for
a
specified
amount,
based
on
how
much
money
the
lender
is
prepared
to
lend
to
the
borrower.
This
allows
buyers
to
shop
for
homes
that
they
already
know
they
can
obtain
financing
for
and
not
homes
that
are
potentially
too
expensive,
or
out
of
the
borrowers
means
to
finance.
?
Prepayment
Privileges
Allows
the
borrower
to
make
voluntary
payments
on
the
mortgage
loan,
in
addition
to
the
regular,
scheduled
mortgage
payments.
?
Property
Purchase
or
Land
Transfer
Tax
A
toll
paid
to
the
provincial
and/or
municipal
government(s)
for
transferring
property
to
the
buyer
from
the
seller.
?
Principal
The
amount
still
owing
to
the
lender
or
the
amount
borrowed
from
the
lender,
excluding
interest.
Interest
is
applied
and
payable
based
on
the
principal
amount
outstanding.
?
Refinancing
Re-negotiating
the
current
terms
of a
mortgage
loan
or
paying
off
the
current
mortgage
loan
and
obtaining
a
new
one.
?
Renewal
At
the
end
of a
mortgage
term,
the
borrower
re-negotiates
the
loan
for
a
new
term.
?
Second
Mortgage
A
type
of
additional
financing
on
top
of
your
existing
mortgage.
This
second
mortgage
usually
is
applied
at a
higher
rate
of
interest
and
is
negotiated
for
a
shorter
term.
?
Seller's
Market
More
buyers
are
looking
for
homes
than
there
are
homes
for
sale.
There
is a
smaller
inventory
of
homes
available
for
sale
and
many
buyers
looking
to
purchase.
House
prices
generally
increase
and
homes
sell
quickly.
?
Strata
or
Condominium
Fee
A
payment
made
by
all
owners
of
condominiums
or
townhouses
within
a
particular
complex
that
is
allocated
to
pay
expenses
such
as
maintenance,
repairs
and
management
costs.
?
Term
The
total
length
of
time
that
the
interest
rate
on a
loan
is
fixed,
which
also
indicates
when
the
principal
balance
becomes
due
and
is
thus
payable
to
the
mortgagee.
?
Title
The
legal
ownership
of a
property/home.
?
Variable-rate
Mortgage
A
type
of
mortgage
with
fixed
payments
but
fluctuating
interest
rates.
The
change
in
current
interest
rates
doesn?t
alter
the
amount
of
the
mortgage
payment,
but
determines
how
much
of
each
payment
is
applied
against
the
principal
amount
and
how
much
goes
to
pay
interest
to
the
lender.
?
Vender
Take-Back
Mortgage
A
situation
where
the
seller
of a
property
provides
all
or
part
of
the
mortgage
financing
in
order
to
sell
their
property. |
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