Real Estate Terminology
You will find in Real Estate that there are many key phrases and terminologies that are used. I have listed below some of the more common terms that you will probably encounter during the processs of buying or selling a home. Take a minute to read through and familiarize yourself with some of these if you don't already know so you're better prepared when that time comes you know what is being discussed.
Amortization period is the actual number of years that it will take to pay back your mortgage
Appraisal Is an estimate of the value of the property up for purchase. This is conducted for the purpose of mortgage lending by a certified appraiser
Assumability This will allow the buyer to take over the seller's mortgage on the property they are purchasing
Bully Offer This is an offer that is put in on a property before a set offer acceptance date. Generally these offers are considerably over asling price with no conditions to secure a property for the Buyer and avoiding him going into a multiple offer situation.......again the Seller would have to accept this for it to be a Bully Offer.
Chattels These are personnal property which is considered tangible and moveable. (Fridge, Stove, Washer, Dryer, Blinds...etc)
Closed Mortgage This is a scheduled mortgage that locks you into a specific payment amount. You can receive a penalty from the bank for repaying your loan before the end of the closed term
Condominium Fee This is a common payment among condo owners which is used to pay the expenses of the building. (Heat, water, general repairs...etc)
Conventional Mortgage This is a mortgage loan that can be issued up to 75% of the property's appraised value or purchase price, whichever is deemed less
Deed This is a instrument used in writing, duly executed and delivered and it conveys the title or interest in the real property
Down Payment This is the buyer's cash payment put towards the property. The difference between the purchase price and amount of the mortgage loan
Encumbrance Is an outstanding claim or lien recorded against a property or any legal right to use the property by another person who is not the owner
Equity Is the difference between the home's selling value and the debts against it
Fiduciary Duties These are the duties required by an agent (the brokerage and its representatives) acting for the principle in an agency relationship. This includes loyalty disclosure, confidentiality, dilligence, accounting and obedience
High Ratio Mortgage Is a mortgage that exceeds 75% of the homes' appraised value. These mortgages must be insured for payment.
Interest Rate This is the value charged by the lender for the use of the lenders money
Irrevocable Incapable of being recalled or revoked. Deemed unchangeable or unalterable
Land Transfer The fee paid to the municipal and/or the provincial government
Maturity Date At the end of the term and at which time you can pay off your mortgage or renew it
Mortgagee This is person or the financial institution that lends the money
Mortgage Insurance This applies to high-ratio mortgages. This protects the lender against any loss if the borrower is unable to repay the mortgage
Mortgage Life Insurance This will pay of the mortgage if the borrower dies
Mortgagor The borrower
Open Mortgage This allows partial or full payment of the principal at any time, without being subject to a penalty
Portability This is a mortgage that enables borrowers to take their current mortgage with them to another property and again without penalty
Pre-approved Mortgage This qualifies you for a mortgage before you start looking for a home. This lets you know how much you can afford to spend
Prepayment Privileges These are voluntary payments in addition to regular mortgage payments
Principal This is the amount that was borrowed or still owing on a mortgage loan. Interest is paid on the principal amount.
Refinancing This is paying off the existing mortgage and arranging a new one or renegotiating the terms and conditions set in the existing mortgage
Renewal Re-negotiation of a mortgage loan at the end of a term for a new term
Second Mortgage This is additional financing and it usually has a shorter term and a higher interest rate that the first mortgage.
Survey This is the accurate mathematical measurement of land and buildings up for purchase
Term This is the length of time that the interest rate is fixed for and it can also indicate when the principal balance becomes due and payable to the lender
Title Shows who has legal ownership in a property
Variable Mortgage This is a mortgage with fixed payments but it also fluctuates with the interest rates. The changing rate determines how much of the payment goes towards the principal
Vendor Take Back Mortgage This is when the seller provides some or all of the mortgage financing in order to sell their property
There you have it, this should make you more familiar with these terms as they will be thrown around a lot while we are busy finding you a home!