MORTGAGE TERMS
Amortization Period
The time over which all regular payments would pay off the mortgage. This is usually 25 years for a new mortgage, however can be greater, up to a maximum of 40 years.
Appraisal
The process of determining the value of property, usually for lending purposes. This value may or may not be the same as the purchase price of the home.
Assumable Mortgage
A type of financing arrangement in which the outstanding mortgage and its terms can be transfered from the current owner to a buyer. By assuming the previous owner's remaining debt, the buyer can avoid having to obtain his or her own mortgage.
Blended Payments
Payments consisting of both a principal and an interest component, paid on a regular basis (e.g. weekly, biweekly, monthly) during the term of the mortgage. The principal portion of payment increases, while the interest portion decreases over the term of the mortgage, but the total regular payment usually does not change.
Canadian Mortgage and Housing Corporation - CMHC
A division of the Government of Canada that acts as Canada's national housing agency. The CMHC's mandate is to help Canadians access a variety of affordable housing options. It also researches housing and real estate trends in Canada and around the world, providing research to consumers, businesses and other government divisions. The major activity of the CMHC, and the one for which it is best known, is mortgage loan insurance, which insures approved lenders (such as Canada's chartered banks) against borrower default. Mortgage loan insurance provides approved borrowers access to low-cost mortgage rates. CMHC approved buyers may purchase property with as little as 5% down payment.
Certificate of Search or Abstract of Title
A document setting out instruments registered against the title to the property, e.g. deed, mortgages, etc.
Closed Mortgage
A mortgage agreement that cannot be prepaid, renegotiated or refinanced before maturity, except according to its terms.
Collateral
Properties or assets that are offered to secure a loan or other credit. Collateral becomes subject to seizure on default.
Conventional Mortgage
A mortgage that does not exceed 80% of the purchase price of the home. Mortgages that exceed this limit must be insured against default, and are referred to as high-ratio mortgages.
Debt-Service Ratio
The percentage of the borrower's gross income that will be used for monthly payments of principal, interest, taxes, heating costs and condominium fees.
High Ratio Mortgage
If you don't have 20% of the lesser of the purchase price or appraised value of the property, your mortgage must be insured against payment default by a Mortgage Insurer, such as CMHC.
Interest Rate Ceiling
The absolute maximum rate of interest that a financial institution can charge for an adjustable rate mortgage or loan.
Mortgage
A debt instrument, secured by the collateral of specified real estate property, that the borrower is obliged to pay back with a predetermined set of payments. Mortgages are used by individuals and businesses wishing to make large value purchases of real estate without paying the entire value of the purchase up front. Mortgages are also known as liens against property, or claims on property.
Mortgage Banker
A company, individual or institution that originates, sells and services mortgage loans.
Mortgage Broker
The matchmaker between a home buyer and a lender whose goal is to originate a mortgage loan. The broker draws from a pool of various lenders to find the right match. Mortgage An entity that lends money to a borrower for the purpose of purchasing a piece of real property. By accepting a mortgage on the real property, the lender creates security in the full repayment of the loan in the future.
Mortgagor
An individual or company who borrows money to purchase a piece of real property. By granting the lender an interest in the property, which allows it to lend the funds with an accurate assessment of risk, the mortgagor provides the lender with a guarantee for the full repayment of the loan. Also known as a "chargor".
Total Debt Service (TDS) Ratio
The percentage of gross income needed to cover monthly payments for housing and all other debts and financing obligations. The total should generally not exceed 40% of gross monthly income.
Remember that a home that looks well kept will create favourable impression. Make sure you cut the grass or shovel the sidewalk as the season requires. Plan on doing a little spot painting to perk up problem areas, oil squeaking hinges, tighten loose screws, and all the other little things that show a home is cared for.
Then it's time to start promoting. Your real estate professional is the expert here, and can advise you what marketing techniques will be used to promote your event. Whether it’s direct mail, advertising in Home Guides or the newspaper, or website promotion, your representative will effectively promote your event. However, you can add to the process by partnering in the promotion too. Post notices on bulletin boards in supermarkets, libraries or community centers. Anyway that you can spread the word will add to the process.
For your Open House day, your representative will also counsel you on how to present your home to its best advantage. Leaving on all the lights, having a fire burning in the fireplace, soft background music playing, and coffee brewing all add to the ambience and make a welcoming impression. But as any real estate professional will tell you, the best thing that you can do to make your open house a success is to get out and stay out! All joking aside, you'll get better results when your visitors feel free to poke about, linger, and ask very direct questions of your real estate agent. If you're present, they'll feel more constrained, and your sales representative may not even get an opportunity to identify any concerns they may have, and attempt to offer them options and solutions. So pack up the dog and the kids, and enjoy your day away trust your real estate professional to do the job right. After all, they're the experts!
