|
Amortization |
Gradual re-payment of a mortgage
loan by means of partial payments on a regular basis. |
|
Appraisal |
An independent estimate of the
property value by a certified appraiser on a specific date. |
|
Bi-Weekly
Payments |
Bi-weekly payments speed up the
repayment of your mortgage since you are making the equivalent of one extra
monthly payment each year. We urge you to take full advantage of this plan. |
|
Blended Payment
Method |
All monthly mortgage payments are
identical, each being comprised of part principal and part interest on the
outstanding debt for the chosen term. Early monthly payments by this method are
mostly composed of interest, but as amortization progresses, successive
payments will consist of less interest and more principal, and the later
payments will be composed almost entirely of principal. |
|
Cash Back
Mortgage |
For a 5 year term cash back
mortgage, the borrower will receive a cash back rebate up to 5% of the amount
he or she borrows. |
|
Commitment
Letter |
Based on the property appraisal
and the borrower's ability to pay, the lender issues a commitment letter which
sets out the terms, conditions and loan amount under which a lender is prepared
to lend in the form of a mortgage. |
|
Conventional
Mortgage |
Maximum loan to value ratio of 80%
based on whichever is less: the purchase price or the appraised value. Mortgage
loan insurance is not required for conventional mortgages. |
|
High Ratio (CMHC)
Mortgages |
For loan to value ratios greater
than 80%, lenders will require mortgage insurance to protect against payment
default. CMHC uses a sliding scale insurance premium based on the loan to value
ratio. |
|
Interest
Adjustment |
Interest calculated on a mortgage
loan for the number of days between the closing date and the end of the month.
Borrower will have to pay this interest adjustment amount at his lawyer's
office on the closing date.
|
|
Land Holding and
Registration |
Under joint tenancy, the interest
of the deceased automatically transfers to the survivor of the tenancy. Under
Tenancy in Common, the interest of a deceased tenant's ownership transfers to
heirs. |
|
Portability |
Remaining mortgage amount with the
same interest rate is allowed to be transferred from the existing home to a new
location. |
|
Prepayment
Option |
The borrower has the privilege to
prepay any part or all of the outstanding balance of a mortgage prior to
maturity. |
|
Rate
Commitment |
The duration of time a lender is
prepared to hold the committed mortgage rate for you. |
|
Tax
Adjustment |
If you choose the option to pay
the property tax installments with your monthly mortgage payments, on closing
date, your lender will hold back the necessary funds to cover the current
year's property taxes which are owing. |
|
Variable (Adjustable) Rate
Mortgage |
The interest rate changes during
the term of the loan in response to changes in the prime lending rate. The rate
is equal to the prime lending rate at any point in time minus a constant
spread. Borrowers are usually charged a slightly lower interest rate as an
incentive during the initial period of the term. In most cases, the borrowers
are allowed to convert to a fixed term of 3 years or longer. |
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Mortgage Glossary - Privacy Statement - Contact Us
Canadian Home Mortgage Company Ltd.
Northwest Office:
107 Hawkside Close N.W. Calgary, Alberta T3G 3K8
Phone: (403) 230-0320 Fax: (403) 230-0339
E-mail: bestrate@mortgagecalgary.com
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