Canadian Financial, Real Estate and Mortgage Glossary

Words categorized under Mortgages

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Bank of CanadaConditional Commitment
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conforming loanDefinition (Mortgages)
A mortgage that is eligible for purchase or securitization by one of the government-sponsored enterprises such as Fannie Mae, Freddie Mac and Ginnie Mae (US mortgages only). Requirements include size of the loan, type, and age
construction loanDefinition (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 loanDefinition (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.
contractual lienDefinition (Mortgages, Real-estate, Financial-banking, Legal-contracts)
A legal claim against property as a result of a voluntary contract, such as a mortgage.
conventional mortgageDefinition (Mortgages)
A mortgage that is not insured or guaranteed by CMHC or GE Capital.
conversion clauseDefinition (Mortgages, Legal-contracts)
A provision that may appear in an adjustable-rate loan agreement allowing the loan to be changed to a fixed-interest rate loan, usually for an additional charge.
convertible armDefinition (Mortgages)
An adjustable rate mortgage (ARM) that can be converted to a fixed-rate mortgage under certain conditions.
convertible mortgageDefinition (Mortgages)
A mortgage where the borrower has the option at specified times to change the term length.
cooperative mortgageDefinition (Investments, Mortgages, Financial-banking)
A loan that allows the borrower to buy into a co-op project.
covenantorDefinition (Mortgages, Real-estate, Financial-banking, Legal-contracts)
A person who promises to be responsible for the repayment of a loan.
creative financingDefinition (Mortgages, Financial-banking)
An innovative or unusual way of structuring a home loan that allows the buyer to buy the house.
creditDefinition (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 historyDefinition (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 life insuranceDefinition (Mortgages, Estate-management, Insurance)
Life insurance that repays the insured's debts upon their death. The death benefit decreases as the debt is paid off.
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 repositoryDefinition (Mortgages, Real-estate, Financial-banking)
Another term for a credit bureau.
credit scoreDefinition (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 worthinessDefinition (Mortgages, Financial-banking)
How likely an individual or entity is to default on their debt.
creditorDefinition (Mortgages, Financial-banking)
One who is owed money.
creditor insuranceDefinition (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 yieldDefinition (Investments, Mortgages, Financial-banking)
The annual increase in the value of an investment, usually expressed as a percentage.
debtDefinition (Investments, Mortgages, Financial-banking)
Money one person or firm owes to another person or firm.
debt consolidationDefinition (Investments, Mortgages, Financial-banking)
The replacement of multiple loans with a single loan, often with a lower monthly payment and a longer repayment period. It's also called a consolidation loan. CanEquity has access to Canada's best debt consolidation products, for more info about debt consolidation see our debt consolidation page.
debt-to-income ratioDefinition (Mortgages, Financial-banking)
The percentage of an individual's income that is used to repay debt.
debtorDefinition (Mortgages, Financial-banking)
A person who has filed a petition for relief under the bankruptcy laws.
declining life insuranceDefinition (Mortgages, Insurance, Financial-banking)
Life insurance with a decreasing death benefit, often used to insure mortgage debt.
defaultDefinition (Mortgages, Financial-banking)
When a borrower fails to fulfill the obligations of a loan or lease.
delinquencyDefinition (Mortgages, Financial-banking)
Failure to make mortgage payments when mortgage payments are due.
delinquent mortgageDefinition (Mortgages)
A mortgage loan where the borrower fails to make payments as specified in the loan agreement.
dependentDefinition (Mortgages, Taxation, Legal-contracts)
A person who relies on someone else for financial support. If you have dependents, you can claim them as exemptions, which will reduce the amount of your income that is taxed.
depositDefinition (Mortgages, Real-estate, Financial-banking)
An act of putting a sum of money in to a bank account.
disclosureDefinition (Mortgages, Real-estate, Financial-banking, Legal-contracts)
A statement listing potential defects to a property, such as the possible existence of lead paint or radon.
discount pointDefinition (Mortgages)
A sum a borrower pays to a lender to decrease the interest rate of a mortgage. A point equals 1 percent of the loan amount.
distressDefinition (Mortgages, Real-estate, Financial-banking)
The right of one party to sell real or personal property belonging to another party to pay unpaid or overdue debt.
document needs listDefinition (Mortgages, Legal-contracts)
An inventory of papers a lender needs to underwrite a loan, usually including pay-cheque stubs, bank statements and tax returns.
down paymentDefinition (Mortgages, Financial-banking)
The portion of the purchase price a buyer pays, in cash, at the time the loan originates.
draw mortgage (DM)Definition (Mortgages, Real-estate)
A periodic payment made to a construction contractor or subcontractor as work progresses. A draw is part of a construction mortgage.
  ➥  See Progress Advance Mortgage (PAM).
draw periodDefinition (Mortgages, Financial-banking)
On a line of credit, the draw period is the fixed time when a borrower can make withdrawals from the account. After the draw period expires, the borrower can renew the credit line or may be required to pay the outstanding balance in full, or over time.
due-on-sale clauseDefinition (Mortgages, Financial-banking, Legal-contracts)
A condition of a mortgage that states that the loan must be paid when the house is sold. Commonly used in reverse mortgage lending.
encumbranceDefinition (Mortgages, Real-estate, Financial-banking, Legal-contracts)
Anything that affects or limits the clear and free title to a property, such as mortgages, leases, easements, or restrictions.
end loanDefinition (Mortgages)
The final mortgage on a property, as opposed to a construction or other interim loan.
Equifax (EF)Company Est.1899, Canada
A major credit bureau company in Canada along with Trans Union.
equityDefinition (Investments, Mortgages, Insurance, Financial-banking, Legal-contracts)
The value of a property minus outstanding mortgage debt and other liens.
escrowDefinition (Mortgages, Real-estate, Taxation, Financial-banking)
An account in which money for property taxes and insurance is held until paid. Money is added to the account every time a mortgage payment is made.
escrow account (EA)Definition (Mortgages, Taxation, Financial-banking)
An account in which money for property taxes and insurance is held until paid; money is added to the account every time a mortgage payment is made.
Previous Page
Bank of CanadaConditional Commitment
Currently Displayed — Page 3
Conforming Loan — Escrow Account
  Next Page
Escrow AgentJoint Credit

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Index of Mortgages Terms

Page 1: Abandonment
Page 2: Bank of Canada
Conditional Commitment
Page 3: Conforming Loan
Escrow Account
Page 4: Escrow Agent
Joint Credit
Page 5: Joint Liability
Mortgage Disability...
Page 6: Mortgage Insurance
Prime Rate
Page 7: Principal
Page 8: Standby Commitment
Zero Down Mortgage

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