Canadian Financial, Real Estate and Mortgage Glossary

Words categorized under Financial-banking

compound interest — Definition (Investments, Mortgages, Financial-banking)

Interest that is calculated by adding the interest earned in the current period to the principal and figuring the next period's interest on this "compounded" total amount.

compounding method — Definition (Investments, Mortgages, Financial-banking)

Used in Bank rate tables. These include: S--Simple interest. A--Compounded annually. H--Compounded semi-annually. Q--Compounded quarterly. M--Compounded monthly. D--Compounded daily.

comptroller — Definition (Insurance, Financial-banking)

An individual who oversees and audits the financial reporting and accounting of an organization.

conditional commitment — Definition (Mortgages, Financial-banking)

A promise by a lender to make a loan if the borrower meets certain requirements.

conditional reserves — Definition (Financial-banking)

Reserves that are considered liabilities.

consolidate — Definition (Financial-banking)

To merge multiple things into one single thing.

construction loan — Definition (Mortgages, Real-estate, Financial-banking)

A short-term interim loan for financing the cost of construction. The lender makes payments to the builder at periodic intervals as the work progresses.

construction to permanent loan — Definition (Mortgages, Real-estate, Financial-banking)

A loan that finances the construction, then for a long-term, traditional mortgage, as distinct from a construction loan followed by a separate mortgage loan.

constructive receipt — Definition (Investments, Taxation, Financial-banking)

The idea in which a taxpayer does not actually have to take possession of money for it to be taxable. An example of this is when savings account interest is reinvested rather than sent to the account holder as a separate payment. In this case, the account holder constructively received the interest because the earnings were credited to his account and could have been taken out at the owner's discretion. As such, the earnings are taxable.

consumer bankruptcy — Definition (Financial-banking, Legal-contracts)

A bankruptcy case filed to reduce or eliminate debts that are primarily consumer debts.

consumer credit — Definition (Financial-banking)

Loans for personal use as opposed to business or commercial lending. These loans are typically unsecured and not backed by collateral.

consumer credit service (CCS) — Definition (Financial-banking)

A service that offers counselling about how to work out a realistic budget and debt repayment plan and work with creditors. The goal is to ensure that debts are paid back over time.

consumer debt — Definition (Financial-banking)

Debts incurred for personal, as opposed to business, needs.

consumer price index (CPI) — Definition (Investments, Financial-banking)

An index that measures movements in the average price of products and services typically consumed by Canadian families.

contingent beneficiary — Definition (Investments, Estate-management, Insurance, Financial-banking)

A beneficiary who only receives his or her benefit when specific conditions have been met.

contract holder — Definition (Investments, Real-estate, Insurance, Financial-banking, Legal-contracts)

The entity that holds the rights to a obligation or debt.

contractual lien — Definition (Mortgages, Real-estate, Financial-banking, Legal-contracts)

A legal claim against property as a result of a voluntary contract, such as a mortgage.

cooperative mortgage — Definition (Investments, Mortgages, Financial-banking)

A loan that allows the borrower to buy into a co-op project.

corporate banking — Definition (Financial-banking)

Banking services for large firms.

corporate relocation — Definition (Financial-banking)

When a company relocates to a new office.

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

A legal entity that is legally separate from its owners and employees.

correspondent bank — Definition (Financial-banking)

A bank that holds deposits of another bank, usually a smaller bank, and in turn provides certain banking services that may not be readily available to the smaller bank.

cost basis — Definition (Investments, Taxation, Insurance, Financial-banking)

The original price paid for an investment which is also known as the basis or tax basis. The cost basis includes any commissions or fees paid when the investment was purchased.

cost of goods sold (COGS) — Definition (Taxation, Financial-banking)

An expense that appears on a business's income statement and represents the inventory cost of the goods sold during a particular period.

cost of living adjustment (COLA) — Definition (Investments, Insurance, Financial-banking)

A method used to keep salaries and benefits in line with inflation by following an index such as the Consumer Price Index.

counteroffer — Definition (Real-estate, Financial-banking)

Rejection of a purchase offer by submission of another offer with different terms (such as price or closing date). A step in the negotiating process.

covenantor — Definition (Mortgages, Real-estate, Financial-banking, Legal-contracts)

A person who promises to be responsible for the repayment of a loan.

creative financing — Definition (Mortgages, Financial-banking)

An innovative or unusual way of structuring a home loan that allows the buyer to buy the house.

credit — Definition (Investments, Mortgages, Financial-banking)

Money that a lender gives to a borrower on condition of repayment over a certain period.

credit bureau (CB) — Definition (Mortgages, Financial-banking)

A company that collects and sells information about how people handle credit. It issues credit reports that list how individuals manage their debts and make payments, how much untapped credit they have available and whether they have applied for any loans. The reports are made available to individuals and to creditors who profess to have a legitimate need for the information.

  ➥  Company that determines one's credit worthiness.

credit card (CC) — Definition (Financial-banking)

A plastic card with a coded magnetic stripe that, when signed, entitles its bearer to a revolving line of credit, with a credit limit and interest rate determined by the borrower's income and credit report.

  ➥  A payment card that gives customers access to a revolving line of credit.

credit history — Definition (Mortgages, Financial-banking)

A record of an individual's or company's past borrowing patterns and whether or not debts were repaid on time.

credit limit — Definition (Financial-banking)

The maximum amount of charges a cardholder may apply.

credit line — Definition (Financial-banking)

The maximum money amount available in an open-end credit arrangement such as a credit card or overdraft protection.

credit rating (CR) — Definition (Mortgages, Financial-banking)

A judgement of a person's ability to repay debts. The rating is often based on a person's current and projected income and past debt payment history. Also called a credit score.

  ➥  A metric to measure the credit worthiness of a debtor.

credit report (CR) — Definition (Mortgages, Financial-banking)

A report on a loan applicant's willingness and ability to make payments in a timely manner in the past. This report is provided to the bank by an outside agency.

  ➥  A report that outlines the credit worthiness of an individual or entity.

Credit Reporting Agency (CRA) — Definition (Mortgages, Financial-banking)

An organization that prepares reports that are used by lenders to determine a potential borrower's credit history. The agency obtains data for these reports from a credit repository as well as from other sources.

credit repository — Definition (Mortgages, Real-estate, Financial-banking)

Another term for a credit bureau.

credit risk — Definition (Financial-banking)

The risk of loss assumed under a financial contract that a borrower or a counter-party to a loan or other credit-related contract may default or fail to fulfill its obligations.

credit score — Definition (Mortgages, Financial-banking)

Also referred to as a 'Beacon Score' is a number, between 300 and 900, that reflects a person's credit history. Lenders calculate this number using a computer system as part of the process for assigning rates and terms to the loans they grant.

credit union (CU) — Definition (Mortgages, Insurance, Financial-banking)

A non-profit, cooperative financial institution owned and controlled by the people who use its services, usually a group such as employees in the same company or industry. Credit unions historically have been able to offer lower rates and fees and still operate in the black. Credit unions rely on a financial reserve to absorb unexpected losses from loan defaults or other financial setbacks, and the majority of credit unions carry federal deposit insurance that protects individual accounts up to a specified amount in the event the credit union fails.

  ➥  Credit unions are member-owned, full service co-operative financial institutions.

credit worthiness — Definition (Mortgages, Financial-banking)

How likely an individual or entity is to default on their debt.

creditor — Definition (Mortgages, Financial-banking)

One who is owed money.

creditor insurance — Definition (Mortgages, Insurance, Financial-banking)

Insurance that repays debt if the borrower cannot.

current market value (CMV) — Definition (Mortgages, Real-estate, Insurance, Financial-banking)

The estimated price determined by the recent sale of similar properties.

current ratio — Definition (Investments, Financial-banking)

A method of determining an entity's liquidity and its ability to cover its current liabilities.

current yield — Definition (Investments, Mortgages, Financial-banking)

The annual increase in the value of an investment, usually expressed as a percentage.

death benefit (DB) — Definition (Investments, Estate-management, Annuities, Insurance, Financial-banking)

A payment or series of payments made to the beneficiaries of a life insurance policy.

  ➥  An amount paid to a beneficiary in a life linsurance policy.

debit — Definition (Financial-banking)

Another name for withdrawal of funds from your account.

debit bureau — Definition (Financial-banking)

A service used by banks that eventually tracks account opening and closing information, cheque order history, cheque writing history, any history of collection activity on unpaid accounts, frequency of debit and ATM card use and household demographics. Under the system, when a consumer gives a cheque to a participating retailer, the individual's account is identified by punching a code into a computer or swiping a card containing a magnetic strip or microchip through an electronic reader, which tells the retailer whether to accept or reject the transaction.