- Refinancing is the process of replacing an existing debt with a new and sometimes larger loan that has better interest rates and terms and / or that is amortized over a longer period. Consumers will refinance their existing mortgage in order to reduce high monthly payments or to take advantage of substantial rate drops within the market.
loan refinance, mortgage refinance, home loan refinance
Related Terms and Acronyms
- Bankruptcy (BK) — Acronym, Important,
- A court action under the Federal Bankruptcy Code by which a debtor's debts may be discharged, usually by transferring assets to a trustee, or rescheduled.
- Blended Rate Mortgage — Definition, Important,
- If a homeowner renews his or her mortgage early, the old and the new mortgage rates are blended together to split the difference between the interest rates.
- Cash Back Mortgage — Definition, Important,
- A mortgage that provides the borrower a lump sum cash payment.
- Cash Out Refinance — Definition,
- The taking out of a new mortgage on the same property in which the amount borrowed is greater than the amount of the previous mortgage. The difference is taken out in cash.
- Debt — Definition,
- Money one person or firm owes to another person or firm.
- Debt Consolidation — Definition,
- 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.
- Gross Debt Service (GDS) — Acronym, Very Important,
➥ Used by mortgage lender underwriters to determine one's ability to qualify for a mortgage loan.
- The total monthly mortgage (or rent) payments, property taxes, utilities and maintenance fees as a percentage of gross monthly income.
- Home Equity Line of Credit (HELOC) — Acronym, Very Important,
➥ Also known as a Home Line of Credit.
- An open-ended loan, paid as revolving debt, that is backed by the equity in the property.
- Interest Rate Differential (IRD) — Acronym, Very Important,
- The penalty one pays for breaking a mortgage.
- 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.
- Mortgage (mtg) — Abbreviation, Important,
- A mortgage is a contract stipulating a specific real property, typically a residence or building, as collateral for a loan. The mortgage incurs a rate of interest that varies according to term and other features.
- Mortgage Acceleration Clause — Definition, Important,
- A provision of a loan agreement that lets a lender demand payment of the full balance under specified circumstances, such as sale of the property, default or refinancing. Not commonly used in Canada and/or Canadian lenders.
- Mortgage Lender (ML) — Acronym, Very Important,
➥ Used internally by mortgage brokers and mortgage lenders.
- A lender that offers mortgages, often through a mortgage broker.
- Mortgage Renewal — Definition, Very Important,
- A renewal as it pertains to the mortgage industry is defined as having an existing mortgage term end and signing a new term to continue.
- Porting — Definition,
- A portable mortgage allows you to transfer the terms and conditions from an existing property loan to a new property loan.
- Prime Rate — Definition,
- The rate suggested by the Bank of Canada on which most banks base their prime mortgage lending rate.
- Refinancing — Definition,
- The act of paying off one mortgage with another mortgage to take advantage of lower interest rates. Refinancing is also used to transform equity into cash for vacations, home improvements, or for consolidating debt.
- Restructured Loan — Definition,
- 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.
- Second Mortgage — Definition, Important,
- A mortgage which ranks after a first mortgage in priority on a registered land title.
- Type 'A' Property — Definition,
- Residential property that is centrally heated and accessible year-round.
- Type 'B' Property — Definition,
- Property that may not be centrally heated or may only be seasonally accessible.
- Umbrella Mortgage — Definition,
- A specific arrangement where one document encompasses one or more already existing mortgages registered on the same property. The mortgagee is responsible for remission of payment(s), to lender(s), while the mortgagor makes one payment to the mortgagee. Also referred to as a wraparound.
- Usurious Rate — Definition,
- An interest rate that is unnecessarily high or well above legal rates. For example, sometimes intangible property taxes are applied to income from usurious rates.
- Wraparound Mortgage — Definition,
- A refinanced home loan in which the balances on all mortgages are combined into one loan.