Real Estate Terms

Agreement of Purchase & Sale

The legal contract between buyer and seller.

Amortization Period

The number of years to repay a mortgage.

Appraisal

Determines the value of a property.

Assets

What you own; used to determine net worth.

Beacon Score

A credit score predicting repayment likelihood.

Blended Payments

Equal payments of principal + interest.

CMHC

Provides mortgage insurance for lenders.

Closing Date

The day ownership transfers to the buyer.

Collateral

Assets pledged as loan security.

Closed Mortgage

Cannot be prepaid without penalty.

Conventional Mortgage

Mortgage under 75% of property value.

Debt-Service Ratio

Percentage of income used for housing costs.

Deed

Legal document transferring ownership.

Deposit

Money held in trust when making an offer.

Equity

Value of property minus debts.

Fire Insurance

Required before mortgage funds are released.

Fixed Rate Mortgage

Interest rate stays the same for the term.

Foreclosure

Lender takes possession after default.

GDS Ratio

Income percentage for housing costs.

Guarantor

Person guaranteeing repayment.

High Ratio Mortgage

Requires mortgage insurance.

Holdback

Funds withheld until construction stages complete.

Interest Adjustment Date

Mortgage term start date.

Maturity Date

End of mortgage term.

Mortgage

Loan used to purchase property.

Mortgagor

Borrower of the mortgage.

Mortgage Life Insurance

Pays off mortgage upon death or illness.

Critical Illness Insurance

Pays mortgage if diagnosed with major illness.

Open Mortgage

Can be prepaid anytime.

Portable Mortgage

Can be transferred to a new property.

Pre‑Approved Mortgage

Preliminary approval for mortgage amount.

Pre‑Payment Penalty

Fee for paying off mortgage early.

Principal

Original loan amount.

Prime

Lowest rate offered to best customers.

Rate Commitment

Days lender guarantees rate.

Refinance

Renegotiating mortgage terms.

Renewal

New terms at end of mortgage term.

Prepayment Option

Right to pay off part of mortgage.

Second Mortgage

Loan behind first mortgage.

Security

Real estate used as collateral.

Survey

Legal document showing property layout.

Term

Length of mortgage agreement.

Title Search

Shows registered instruments on property.

TDS Ratio

Total debt obligations vs income.

Variable‑Rate Mortgage

Rate changes with prime.