Terms with Category Mortgages

  • Legal Fees and Disbursements Definition,
    • Charges paid on your behalf by a solicitor that are in addition to professional costs.
  • Legal Mortgage Definition, Important,
    • The written geographical description of a property as described in the land register.
  • Lender Definition,
    • The bank or mortgage company offering the loan.
  • Lending Value Definition,
    • The property value for mortgage purposes. Usually the lesser of appraised value or sale price.
  • Level Payment Definition,
    • A method of repayment where periodical payments of principal and interest are made in a certain way so the payment amount remains constant.
  • Leveraged Property Definition,
    • A property financed with mortgage debt.
  • Lien Holdback Definition,
    • The practice of mortgagees withholding up to 15% of mortgage monies advanced on new construction.
  • Loan Definition,
    • Letting another party use something of value temporarily.
  • Loan Application Definition,
    • A document in which a prospective borrower details his or her financial situation to qualify for a loan.
  • Loan Application Fee Definition,
    • A cost charged by a lender for processing loan application documents that are submitted by prospective borrowers.
  • Loan Commitment Definition,
    • A lender's promise to advance a specific sum on specific terms.
  • Loan Origination Definition,
    • The process of applying for a loan and the handling of that application by a lender.
  • Loan Processing Definition,
    • The steps taken by a lender to convert a loan application into an approved loan for the potential borrower. These steps include processing the application, conducting a credit investigation, evaluating the loan, etc.
  • Loan Servicing Definition,
    • Supervising a loan after it has been made. This could involve collecting payments, keeping accounting records, computing interest and principal, etc.
  • Loan Term Definition,
    • The period specified in the promissory note for a borrower to pay a loan, such as a mortgage. Most conventional mortgages have a loan term of 5 or 10 years.
  • Loan-to-Value (LTV) Acronym, Very Important,
    • The ratio of the principal amount of the loan to the lesser of the purchase price of the property or the property's appraised value. This can be expressed as an 80% loan, or 80% LTV.
    A widely used term in the mortgage brokerage and lending industry, especially by mortgage underwriters.
  • Local Taxes Definition,
    • Taxes imposed by local governments (municipalities) to pay for its services. These taxes are in addition to Federal and Provincial taxation.
  • Lock-in Definition,
    • A lender's guarantee that the mortgage rate quoted will not change for a specific period. The borrower wants the lock to stay in effect until closing.
  • Low-documentation Loan Definition,
    • A mortgage that requires less income or asset verification than conventional loans. Low-documentation loans are designed for the entrepreneur or self-employed, for recent immigrants, or for borrowers who cannot or choose not to reveal their financial information. A substantial down payment and excellent credit history are generally required. This type of loan will also yield a higher interest rate.
  • Low-down Mortgages Definition, Important,
    • Mortgages with a low down payment, usually less than 10 percent.
  • Low-down-payment Loan Definition,
    • A mortgage where the borrower puts down a small amount and borrows a high percentage of the purchase price.
  • LPQ Amount Definition,
    • A term used by CanEquity which is short for Loan, Purchase or Qualification amount.
  • Lump Sum Payment Definition,
    • One-time single-sum payment or payout.
    • An extra payment made to reduce a loan.
  • Margin Definition,
    • Expressed as percentage points, the amount that a lender adds to an index to arrive at the final interest rate. For example, if the index is 9 percent and the margin 2.75 percent, the final interest rate is 11.75 percent.
    • The difference between the cost and the selling price.
  • Maturity Definition,
    • The date when the principal balance of a loan is due and payable to the lender. Also, the date when a bond pays off its principal.
  • Maximum Financing Definition,
    • A loan given for a property where the buyer puts down the lowest allowable down payment possible.
  • Merged Credit Report Definition,
    • A summary of one's credit history from the big two credit bureaus: Equifax and Trans Union.
  • Mis-selling Definition,
    • The act of misleading a client into buying a product or service by deliberately misrepresenting the aforementioned product or service.
  • Modification Definition,
    • A change in terms of the loan agreement.
  • Monetary Policy Definition,
    • The Bank of Canada's ability to influence the economy through changes in short-term interest rates and the money supply.
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