Canadian Financial, Real Estate and Mortgage Glossary

Words categorized under Financial-banking

mint condition — Definition (Automotive, Real-estate, Financial-banking)

A term describing a building or item that's just like new.

mis-selling — Definition (Investments, Mortgages, Real-estate, Insurance, Financial-banking, Legal-contracts)

The act of misleading a client into buying a product or service by deliberately misrepresenting the aforementioned product or service.

mixed-income housing — Definition (Real-estate, Financial-banking)

A neighbourhood whose residents earn widely varying wages and salaries.

modification — Definition (Mortgages, Financial-banking)

A change in terms of the loan agreement.

monetary policy — Definition (Investments, Mortgages, Financial-banking, Legal-contracts)

The Bank of Canada's ability to influence the economy through changes in short-term interest rates and the money supply.

monetary value — Definition (Real-estate, Insurance, Financial-banking)

A property's monetary value is its worth if sold at this moment in time.

money factor — Definition (Automotive, Financial-banking)

A leasing term that expresses the cost of borrowing. It is similar to the interest rate paid on a conventional car loan, but it is expressed as a difficult-to-understand fraction. To convert the money factor to a recognizable interest rate, multiply it by 24. For example, a money factor of .00345 x 24 = 9 percent interest. The money factor is negotiable, and consumers who lease a new car should look for a money factor close to the current interest rate charged for new-car loans.

money laundering (ML) — Definition (Investments, Taxation, Financial-banking)

A process used by individuals to conceal illegally acquired funds by converting them into seemingly legitimate income. The term is generally associated with organized crime and those who need to legitimize illegally earned funds.

money market account (MMA) — Definition (Investments, Financial-banking)

A bank account that restricts the type and number of withdrawals. The account also earns interest similar to money market funds.

money market mutual fund (MMMF) — Definition (Investments, Financial-banking)

A mutual fund that invests in short-term debt instruments such as Treasury bills, commercial paper, and large CDs. Also referred to as money market fund (MMF).

monthly periodic rate — Definition (Mortgages, Financial-banking)

The interest rate factor used to calculate the interest charges on a monthly basis. The factor equals the yearly rate divided by 12.

mortgage application — Definition (Mortgages, Financial-banking, Legal-contracts)

A document in which a prospective borrower details his or her financial situation to qualify for a loan.

mortgage banker — Definition (Mortgages, Financial-banking)

An employee of a large bank who finds financing for the general public.

mortgage brokerage — Definition (Mortgages, Financial-banking)

An individual or group who brokers deals between their clients and lenders.

  ➥  CanEquity is a mortgage brokerage.

mortgage lender (ML) — Definition (Mortgages, Financial-banking)

A lender that offers mortgages, often through a mortgage broker.

  ➥  Used internally by mortgage brokers and mortgage lenders.

mutual insurance company — Definition (Insurance, Financial-banking)

An insurance company where the each policyholder is a part owner of the company.

negative amortization — Definition (Mortgages, Financial-banking)

A gradual increase in loan debt that occurs when the monthly payment does not cover the entire principal and interest due. The shortfall is added to the remaining balance which creates "negative" amortization.

net cash flow (NCF) — Definition (Taxation, Financial-banking)

Incremental after-tax income plus depreciation expense resulting from investment.

net income (NI) — Definition (Taxation, Financial-banking)

The difference between effective gross income and expenses. The term is qualified as net income before depreciation and debt.

net interest margin (NIM) — Definition (Taxation, Financial-banking)

Net interest income (the difference between interest income and interest expense) as a percentage of average total assets.

net operating loss (NOL) — Definition (Investments, Taxation, Financial-banking)

A net loss for the tax year because of business or casualty losses. Taxpayers may use an excess loss of one year as a deduction for certain past or future years.

net worth — Definition (Investments, Taxation, Financial-banking)

The total value of all assets, such as house, car, furniture and investments, minus all debts, such as mortgages and credit card bills.

netting — Definition (Financial-banking)

The offsetting with a counter-party of financial obligations or payments one is owed with those one is entitled to receive, thus reducing the costs arising out of payment settlements. Netting is also used as a risk management tool to help counter-parties reduce their exposure to credit risk.

niche banks — Definition (Financial-banking)

Smaller banks that cater to particular communities or certain industries. These banks have been thriving in the fallout from mega-bank mergers.

no credit history — Definition (Mortgages, Financial-banking)

To have no record of an individual's credit worthiness.

no-documentation loan — Definition (Mortgages, Financial-banking, Legal-contracts)

A mortgage in which the applicant provides a minimum of information -- name, address, Social Insurance number (so credit reports can be pulled), and contact information for an employer, if there is one. The underwriter decides on the loan based on the applicant's credit history, the appraised value of the house and size of down payment.

no-load annuity — Definition (Investments, Estate-management, Annuities, Financial-banking)

An annuity that pays the salesperson no commission and has low fees and expenses. A no-load annuity is often sold by an insurer directly.

non-cancellable — Definition (Insurance, Financial-banking, Legal-contracts)

A contract or section of a contract that cannot be modified.

non-dischargeable debt — Definition (Taxation, Financial-banking)

Debt that cannot be eliminated in bankruptcy such as Federal taxes.

non-liquid asset — Definition (Investments, Financial-banking)

A possession that can't be transformed readily into cash. Stocks and bonds are liquid assets because they can be sold easily; a house is a non-liquid asset because it takes time to sell.

non-owner occupant — Definition (Investments, Mortgages, Real-estate, Financial-banking)

A borrower who purchases a property for investment or rental purposes and will not occupy the property.

non-recourse debt — Definition (Mortgages, Financial-banking)

A loan secured by collateral where the borrower is not personally liable.

non-refundable credit — Definition (Taxation, Financial-banking)

Tax credits reduce your tax liability dollar-for-dollar. Non-refundable credits can get your tax bill down to zero.

North American Free Trade Agreement (NAFTA) — Definition (Investments, Financial-banking)

An agreement between the United States, Canada, and Mexico that allows for freer trade between the three countries.

not-for-profit — Definition (Taxation, Financial-banking, Legal-contracts)

An Organization operated solely for: social welfare, civic improvement, pleasure or recreation, or any other purpose except profit.

note — Definition (Investments, Financial-banking, Legal-contracts)

A legal acknowledgement of a debt and an implicit promise to repay. It includes the loan amount, interest rate and term.

note rate — Definition (Mortgages, Financial-banking)

The percentage paid by a borrower for the use of money, usually expressed as an annual percentage on a promissory note.

Notice of Assessment (NOA) — Canada

A form the federal government issues when personal taxes are complete. A notice of assessment shows a breakdown of the given years income along with the balance owing or refund.

  ➥  Canada Revenue Agency's T451 tax form.

notice of default (NOD) — Definition (Mortgages, Real-estate, Financial-banking, Legal-contracts)

The step in the foreclosure process where the lender informs the court that the borrower is in arrears.

nsf — Definition (Financial-banking)

NSF means Non-sufficient Funds.

nsf cheque — Definition (Financial-banking)

If a cheque is returned for this reason, it means that there was not enough money in your bank account to cover the amount of the cheque. There is a fee to you if this situation occurs.

number of free transactions per month — Definition (Financial-banking)

The number of transactions an account holder is allowed to make before being charged a fee. If the limit is exceeded, a per-item charge is applied. Some accounts offer an unlimited number of free transactions or no free transactions per month.

offline debit card — Definition (Financial-banking)

A card with traits from both ATM cards and credit cards (usually VISA or MasterCard). Banks issue this type of card either instead of or in addition to an ATM card. The card can be used anywhere the VISA or MasterCard logo is displayed, but a line of credit is not accessed -- the customer's chequing account is debited. It is "offline" because the account is not directly accessed -- there is a delay of 24 to 72 hours before the debit is made in the account. If you sign a slip of paper to complete the transaction, it is offline. In the Canada, a Personal Identification Number (PIN) may be required to use an offline debit card.

old age security (OAS) — Definition (Investments, Financial-banking)

A Canadian pension plan for eligible Canadians over the age of 65.

online banking (OLB) — Definition (Financial-banking)

Access by personal computer or terminal to bank information, accounts and certain transactions via the financial institution's web site on the Internet. Also known as Internet banking.

online bill payment — Definition (Financial-banking)

A service offered by online banks, usually for a small monthly fee, that relieves consumers from having to write cheques and lick stamps to pay their monthly bills. Online bill payment systems allow people to enter the names of their creditors and the numbers of their utility accounts and pay virtually all routine bills.

online debit card — Definition (Financial-banking)

A method of payment in the form of a card that immediately deducts funds from a person's bank account when used. The card may have a VISA or MasterCard logo on it, or just the name of the bank that issued the card, similar to an ATM card.

onus item — Definition (Financial-banking)

A payment that is deposited at the same financial institution in which it was drawn or written. For example, a cheque that is written by one bank customer and deposited by the recipient at another branch of the same bank. These items are not cleared between institutions and therefore are not represented in statistics of payments exchanged between financial institutions in the clearings.

open-end lease — Definition (Automotive, Financial-banking)

Sometimes called a finance lease. It usually offers lower payments, but carries a risk for the consumer. Under an open-end lease, the lessee must pay any difference between the residual value of the car as stated in the lease and the fair market value of the car, if lower, at the end of the lease. The lessor pays for the appraisal that sets the value. If the consumer doesn't agree with it, the consumer may pay for a binding, independent appraisal by someone agreed to by both parties.

operating cash flow (OCF) — Definition (Investments, Taxation, Financial-banking)

The money a company generates from its business operations. This revenue excludes costs from certain investments.