Terms with Category Mortgages

  • Escrow Agent Bank,
    • A neutral third party who holds the documents and money in a real-estate transfer until all conditions are met.
  • Exchange Bank,
    • A trade of property for other property or services. Like-kind property exchanges are a popular tax-deferral strategy.
  • Experian (XP) Bank, Canada,
    • One of the Big Three credit bureaus, along with Equifax and Trans Union, Experian not normally used in Canada.
  • Finance Canada Bank, Canada-wide,
    • Federal department responsible for Canada's economic performance and regulation of financial institutions.
  • Finance Charge Bank,
    • Charges that include all of the interest expected to be earned over the life of a loan, in addition to the service charges, mortgage insurance premiums, and other loan-related charges.
  • Finder Fee Bank,
    • A fee paid by a party to another for services rendered.
  • Firm Commitment Bank,
    • A lender's promise to lend money to a specific borrower on specified terms at a certain time.
  • First Lien Definition,
    • Primary claim by the lender for satisfaction of outstanding debt. A first mortgage creates a first lien.
  • First Mortgage Definition, Important,
    • A mortgage that is the primary lien against a property.
  • Fixed Instalment Bank,
    • Periodic (usually monthly) payment on a loan whose sum does not vary.
  • Fixed Rate Mortgage (FRM) Acronym, Very Important,
    • A loan in which the interest rate and payments remain the same for the entire life of the loan. The interest rate and payment amounts are set at the time of loan origination.
  • Flat Fee Bank,
    • A fixed charge that a broker requests instead of a commission.
  • Forbearance Bank,
    • Delaying foreclosure, usually because the borrower has arranged to pay the amount in arrears.
  • Foreclosure Bank,
    • The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.
  • Full Income Verification Bank,
    • A requirement for fully documented proof of income; loans of this type usually offer lower interest rates than no-income or "no-doc" verification loans.
  • GE Capital Company,
    • GE Capital is the new CMHC alternative in the Canadian Mortgage Market place. GE Capital like CMHC provides banks/lenders with mortgage insurance. Not to be confused with life or property insurance. In the event of default or foreclosure GE Capital assumes responsibility of the property and reimburses the bank/lender the entire mortgage amount. This insurance is required generally when you have less than 25% equity or down payment. This insurance is paid by the property owner in advance but usually added to the mortgage amount. See also "CMHC."
    Also offers commercial financing.
  • Gift From a Family Member Definition,
    • A gift of cash, to a mortgage applicant from a relative by blood or marriage, which the applicant is not required to repay. In some instances it is necessary to provide a written statement to that repayment is not required.
  • Good Credit Bank,
    • Someone who carries little credit risk.
  • Goods and Services Tax (GST, GS) Bank, Canada,
    • A sales tax that applies in all Canadian provinces charged at 5% (as of 2012).
    Bank account transaction code.
  • Gross Debt Service (GDS) Acronym, Very Important,
    • The total monthly mortgage (or rent) payments, property taxes, utilities and maintenance fees as a percentage of gross monthly income.
    Used by mortgage lender underwriters to determine one's ability to qualify for a mortgage loan.
  • Guarantor Definition,
    • Someone who guarantees something.
  • Guaranty Bank,
    • A promise to assume responsibility for a debt if the borrower defaults.
  • Harmonized Sales Tax (HST) Bank, Canada,
    • A sales tax used in some provinces to merge the GST and PST.
    Canadian consumption tax.
  • Hazard Insurance Definition,
    • Insurance that covers hazards that are considered risky enough not to be covered by a standard insurance policy.
  • High-ratio Mortgage Definition, Important,
    • A mortgage in which a borrower places a down payment of less than 20% of the purchase price.
  • Holdback Definition,
    • A dollar amount that is withheld by the lender during construction of a home to ensure construction is satisfactory at every stage. The amount of hold-back is typically equivalent to the estimated cost to complete the construction.
  • Home Buyers' Plan (HBP) Bank, Canada, Very Important,
    • A way for a homebuyer to use part of his or her RRSP as a down payment on a mortgage.
    Government assistance for first-time homebuyers.
  • Home Equity (HE) Bank, Very Important,
    • The part of a home's value that the mortgage borrower owns outright; the difference between the fair market value of the home and the principal balances of all mortgage loans.
  • Home Equity Debt Bank,
    • Debt secured by your home.
  • Home Equity Line of Credit (HELOC) Bank, Very Important,
    • An open-ended loan, paid as revolving debt, that is backed by the equity in the property.
    Also known as a Home Line of Credit.
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