Terms with Category Mortgages

  • Restructured Loan Bank,
    • A mortgage in which basic terms -- such as interest rate, term and monthly payment -- have been changed to prevent foreclosure. Not a normal practice in Canada.
  • Reverse Mortgage Bank, Important,
    • A loan that allows an older homeowner to convert built-up equity into cash. The loan comes due when the owner dies, sells the house or moves out.
  • Revolving Credit Bank,
    • A line of credit that does not have a specified repayment schedule but may require a minimum payment to cover interest and contribute to paying off principal. Typical of credit card loans, chequing account cash reserve or overdraft accounts that have pre-approved lines of credit.
  • Roll In Definition,
    • To include certain closing costs, such as origination and settlement fees, in the mortgage.
  • Roll In Loans Bank,
    • A refinancing loan that rolls any closing costs or fees into the loan. These programs best serve people who have a reasonable amount of home equity, want to reduce their overall interest expense, and plan to stay in their homes.
  • Roll Over Mortgage Bank, Important,
    • A type of loan where the interest rate is set for a specific term. At the end of this term, the mortgage is said to "roll-over" and the borrower and lender may agree to extend the loan. If satisfactory terms cannot be agreed upon, the lender is entitled to be repaid in full. In this case, the borrower may seek alternative financing.
  • Seasonal Unemployment Bank,
    • The loss of jobs due to changes in the climate and other conditions. Forestry, fishing and construction are affected by climate, while retailing is affected by seasons and holidays. For instance, at Christmas, retail employment is higher than in January.
  • Second Home Definition,
    • An additionally purchased property, often a vacation or a rental property.
  • Second Home Mortgage Definition, Important,
    • A mortgage used purchase property, often a vacation or a rental property.
  • Second Mortgage Definition, Important,
    • A mortgage which ranks after a first mortgage in priority on a registered land title.
  • Secondary Market Bank,
    • A market where financial instruments such as stocks, bonds, options and futures are bought and sold to investors.
  • Secondary Mortgage Market Bank, Important,
    • The trade in home loans that are bundled together and sold as securities to investors. It frees money so more people can get mortgages.
  • Secured Debt Bank,
    • A debt that is secured by a lien on debtor's property that may be taken by the creditor in case of non-payment by the debtor. A common example is a mortgage loan.
  • Self Employed Person (SEP) Bank,
    • A person who runs a trade or business, rather than working as an employee for someone else. You are self-employed if you are a sole proprietor or a partner working in a business. You can be an employee and self-employed at the same time if you have an independent business outside your regular employee hours. To qualify for many business tax exclusions and deductions, the enterprise must make a profit in three of five years. In most cases in order to qualify you must take and average of the last 2-3 years tax assessments.
  • Self-Build Insurance Definition,
    • Insurance that covers a homeowner for problems involved in a construction project.
  • Seller Carryback Definition,
    • A form of financing in which the seller of a property accepts a down payment and agrees to accept payments until the property is paid for.
  • Shared-Appreciation Mortgage (SAM) Bank,
    • A mortgage loan where the lender or a third-party backer agrees to offer a highly reduced mortgage rate to the borrower in exchange of sharing profits when the property is sold.
    • A home loan in which the lender offers a below-market interest rate in exchange for sharing in the profit when the home is sold. Usually done only with private funds/lenders.
  • Social Insurance Number (SIN) Bank, Canada, Very Important,
    • Every person who has an income or pays taxes must apply for this number, which is assigned by the Government of Canada. You must, by law, provide this number to financial institutions with which you have an interest-bearing deposit account.
    A nine-digit number that you need to work in Canada or to have access to government programs and benefits. Banks may also request your SIN for tax purposes or to verify credit checks.
  • Solicitor Information Definition,
    • When you apply for a mortgage you will need a law firm with a lawyer's name and their contact information which would typically include the office location, phone number, fax number and e-mail address.
  • Spread Bank,
    • The difference between the interest rate charged to borrowers and the interest rate paid to depositors.
  • Standby Commitment Bank,
    • A commitment from a lender to make a loan in a specified period of time on specified terms with the understanding that the borrower will not likely draw down the funds.
  • Statement Bank,
    • A detailed record of transactions in a bank customer's account(s) for a certain period, usually each month, which shows debits, credits, transfers, payroll deposits, account balance, cheque fees, service and interest charges, ATM activity, etc.
  • Step-rate Mortgage Definition, Important,
    • A fixed-rate home loan on which payments are lower at the beginning, typically for two years, and which then rise.
  • Sub-prime Borrower Bank,
    • A borrower with a less-than-perfect credit report due to late payments or a default on debt payments.
  • Sub-prime Mortgage Definition, Important,
    • A mortgage loan that is granted to a borrower who is considered sub-prime (has a less-than-perfect credit report). Sub-prime borrowers have either missed payments on a debt or have made late payments. Lenders charge a higher interest rate to compensate for potential losses from customers who may default on the loan.
  • Subordinate Loan Bank,
    • A mortgage whose priority is below that of another mortgage; i.e., a second or third mortgage or a home-equity loan.
  • Sweat Equity Bank,
    • The value of the work put into a house by its owner. This can be used in place of a full down payment. Up to and including 50% of a down payment.
  • Takeout Mortgage Loan Definition, Important,
    • A long term mortgage loan that is advanced to borrower on completion of construction or in compliance with any other conditions in the loan commitment. The funds are normally used to pay off or take out the construction lender.
  • Tandem Loan Bank,
    • When one asset, usually a house, has two loans taken out on it.
  • Tax Lien Bank,
    • A claim, or obstacle, to the sale of property because of unpaid taxes. The property's title can't be transferred until liens are paid.
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