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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

Words categorized under Mortgages

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Standby Commitment — Zero Down Mortgage
 
standby commitmentDefinition (Mortgages, Financial-banking)
A commitment from a lender to make a loan in a specified period of time on specified terms with the understanding that the borrower will not likely draw down the funds.
statementDefinition (Mortgages, Financial-banking)
A detailed record of transactions in a bank customer's account(s) for a certain period, usually each month, which shows debits, credits, transfers, payroll deposits, account balance, cheque fees, service and interest charges, ATM activity, etc.
step-rate mortgageDefinition (Mortgages)
A fixed-rate home loan on which payments are lower at the beginning, typically for two years, and which then rise.
sub-prime borrowerDefinition (Mortgages, Financial-banking)
A borrower with a less-than-perfect credit report due to late payments or a default on debt payments.
sub-prime mortgageDefinition (Mortgages)
A mortgage loan that is granted to a borrower who is considered sub-prime (has a less-than-perfect credit report). Sub-prime borrowers have either missed payments on a debt or have made late payments. Lenders charge a higher interest rate to compensate for potential losses from customers who may default on the loan.
subordinate loanDefinition (Mortgages, Financial-banking)
A mortgage whose priority is below that of another mortgage; i.e., a second or third mortgage or a home-equity loan.
sweat equityDefinition (Mortgages, Financial-banking, Legal-contracts)
The value of the work put into a house by its owner. This can be used in place of a full down payment. Up to and including 50% of a down payment.
takeout mortgage loanDefinition (Mortgages, Real-estate)
A long term mortgage loan that is advanced to borrower on completion of construction or in compliance with any other conditions in the loan commitment. The funds are normally used to pay off or take out the construction lender.
tandem loanDefinition (Mortgages, Financial-banking)
When one asset, usually a house, has two loans taken out on it.
tax lienDefinition (Mortgages, Real-estate, Taxation, Financial-banking)
A claim, or obstacle, to the sale of property because of unpaid taxes. The property's title can't be transferred until liens are paid.
teaser rateDefinition (Mortgages, Financial-banking)
Often called the introductory rate, it is the below-market interest rate offered to entice customers to switch credit cards or lenders.
termDefinition (Investments, Mortgages, Insurance, Financial-banking, Legal-contracts)
The length of time you commit to repay a lender or bank at an agreed upon interest rate and payment schedule. The interest rate usually remains constant during this term unless the commitment states otherwise. For example, a five year fixed rate mortgage has a term of five years.
title reportDefinition (Mortgages, Real-estate, Insurance, Legal-contracts)
A report that reveals any competing claims, liens, or other problems relating to a property. A title report is required before title insurance will be issued. Also known as a "Preliminary Title Report" or "Prelim."
total annual loan cost (TALC)Definition (Mortgages, Financial-banking)
A method of finding the annual cost of a reverse loan.
total debt service (TDS)Definition (Mortgages)
The ratio of a borrower's total monthly debt payments to his or her monthly gross income. Lenders use this ratio to determine how much of a loan a borrower is qualified for.
trade equityDefinition (Mortgages, Real-estate, Financial-banking)
A swap of property, such as real estate or a car, as part of a down payment for other real estate.
transfer of title (TOT)Definition (Mortgages, Real-estate)
A document signed by the seller and purchaser transferring ownership, at which time the document is registered against the property.
TransUnion (TU)Definition (Mortgages, Companies-associations, Financial-banking)
One of the major Canadian credit bureau companies along with Equifax.
  ➥  See TransUnion Canada.
type 'a' propertyDefinition (Mortgages, Real-estate)
Residential property that is centrally heated and accessible year-round.
type 'b' propertyDefinition (Mortgages, Real-estate)
Property that may not be centrally heated or may only be seasonally accessible.
umbrella mortgageDefinition (Mortgages)
A specific arrangement where one document encompasses one or more already existing mortgages registered on the same property. The mortgagee is responsible for remission of payment(s), to lender(s), while the mortgagor makes one payment to the mortgagee. Also referred to as a wraparound.
underwriterDefinition (Investments, Mortgages, Insurance, Financial-banking)
An entity that issues and distributes financial products including equity capital, credit, mortgages, and insurance.
underwriting (UW)Definition (Investments, Mortgages, Real-estate, Insurance, Financial-banking, Legal-contracts)
Assessing individuals for eligibility and issuing and distributing a financial product such as insurance, equity capital or credit.
underwriting expensesDefinition (Investments, Mortgages, Insurance, Financial-banking)
The expenses accumulated by an insurance company while underwriting a product.
underwriting guideDefinition (Mortgages, Insurance, Financial-banking)
The rules and guidelines an underwriter must follow while writing policies.
underwriting incomeDefinition (Investments, Mortgages, Insurance, Financial-banking)
The income earned by an insurer from underwriting in a certain amount of time.
underwriting riskDefinition (Investments, Mortgages, Insurance, Financial-banking)
The total amount of risk an entity takes on from underwriting something.
upside-downDefinition (Automotive, Mortgages, Real-estate, Financial-banking)
A position that consumers find themselves in when the outstanding balance of a loan is higher than the current fair market value of the property purchased with the loan. See also "Depreciation."
variable interest mortgageDefinition (Mortgages)
A loan where the interest rate may vary during the term of the mortgage. The variance is usually tied to some specific factor such as prime bank rate or the guaranteed investment certificate rate for a designated lender.
variable interest rateDefinition (Mortgages, Financial-banking)
Percentage that a borrower pays for the use of money, and which moves up or down periodically based on changes in other interest rates.
variable rateDefinition (Mortgages, Financial-banking)
A floating percentage value that fluctuates based on certain conditions.
variable rate mortgage (VRM)Definition (Mortgages)
Home loan in which the interest rate is changed periodically based on a standard financial index. Also called an "Adjustable-rate Mortgage."
  ➥  A type of mortgage loan offered by brokers and lenders.
vendor take backDefinition (Mortgages, Real-estate, Financial-banking)
Where the seller of the property provides all or some of the financing in order to sell the property.
verification of employment (VOE)Definition (Mortgages, Financial-banking, Legal-contracts)
Confirmation that a loan applicant is telling the truth about where he or she works and how much he or she makes.
workoutDefinition (Mortgages)
A "mortgage workout" is when a lender works with a borrower on altering their existing mortgage terms in order to prevent a foreclosure.
wraparound mortgageDefinition (Mortgages)
A refinanced home loan in which the balances on all mortgages are combined into one loan.
year-end statementDefinition (Mortgages, Taxation, Financial-banking)
A report sent to the borrower each year. The report shows how much was paid in taxes and interest during the year, as well as the remaining mortgage loan balance at the end of the year.
zero down mortgageDefinition (Mortgages)
A mortgage product that allows the borrower to financing 100% of their property.
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Standby Commitment — Zero Down Mortgage
 

Search the Glossary

Index of Mortgages Terms

Page 1: Abandonment
Bank
Page 2: Bank of Canada
Conditional Commitment
Page 3: Conforming Loan
Escrow Account
Page 4: Escrow Agent
Joint Credit
Page 5: Joint Liability
Mortgage Disability...
Page 6: Mortgage Insurance
Prime Rate
Page 7: Principal
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Page 8: Standby Commitment
Zero Down Mortgage

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