LTV:
The ratio of the mortgage loan amount to
the property's appraised value or selling price, whichever is less
GDS:
The gross debt service ratio (GDS) refers
to the applicant’s shelter costs (mortgage or rent) expressed as a
percentage of gross monthly income. For mortgages, this includes
principal, interest, and taxes and half of any condominium maintenance
fees.
TDS:
The
total debt service ratio (TDS) refers to the total of all monthly
payments expressed as a percentage of gross monthly income. These
payments include rent or mortgage (principal, interest, and taxes),
personal loan payments, revenue property mortgage payments, credit
cards, lines of credit, alimony child support
Net Worth:
Net worth (sometimes "net assets") is the
total assets minus total liabilities of an individual or company. For a
company, also called owner's equity,
shareholders' equity, or net
assets. Often the process of calculating net worth involves the use of a
balance sheet, which is a ledger sheet listing all assets and
liabilities with the calculated difference.
Certificate of Location or Survey - A
document specifying the exact location of the building on the property
and describing the type and size of the building including additions, if
any.
Conventional Mortgage
- A mortgage that does not exceed 75% of the purchase price of the home.
Mortgages that exceed this limit must be insured against default, and
are referred to as high-ratio mortgages (see below).
High Ratio Mortgage
- If you don't have 25% of the lesser of the purchase price or appraised
value of the property, your mortgage must be insured against payment
default by a Mortgage Insurer, such as
CMHC and
Genworth .
Fire Insurance
- Before a mortgage can be advanced, the purchaser must have arranged
fire insurance. A certificate or binder from the insurance company may
be required on closing.
Mortgage Life
Insurance
- A form of reducing term insurance recommended for all mortgagors. If
you die, have a terminal illness, or suffer an accident, the insurance
can pay the balance owing on the mortgage. The intent is to protect
survivors from the loss of their homes
Closed Mortgage
- A mortgage agreement that cannot be prepaid, renegotiated or
refinanced before maturity, except according to its terms for more info:
www.mortgagebc.biz/openversusclosed
Open Mortgage
- A mortgage which can be prepaid at any time, without penalty, for more
info please go to :
www.mortgagebc.biz/openversusclosed
Fixed-Rate Mortgage - A mortgage for which
the rate of interest is fixed for a specific period of time (the term).
For more info please go to :
www.mortgagebc.biz/variableversusfixed
Variable Rate Mortgage
- A mortgage for which the rate of interest may change if other market
conditions change.
This is sometimes referred to as a floating rate mortgage. For
more info please go to :
www.mortgagebc.biz/variableversusfixed
RRSP -RRSP to be used as the down
payment please go to :
www.mortgagebc.biz/rrsp
Porting
- This allows you to move your mortgage to another property without
having to lose your existing interest rate. You can keep your existing
mortgage balance, term and interest rate plus save money by avoiding
early discharge penalties.
Mortgage Term
- The number of years or months over which you pay a specified interest
rate. Terms usually range from six months to 10 years.
Mortgagee and Mortgagor
- The lender is the mortgagee and the borrower is the mortgagor.
Home Equity
- The difference between the price for which a home could be sold
(market value) and the total debts registered against it.
Conditional Offer - An offer to purchase
subject to conditions. These conditions may relate to financing,
or the sale of an existing home. Usually a time limit in which the
specified conditions must be satisfied is stipulated.
Firm
Offer - An offer to buy the property as outlined in the offer to
purchase with no conditions attached.
Interim
Financing - Short-term financing to help a buyer bridge the gap
between the closing date on the purchase of a new home and the closing
date on the sale of the current home.
P.I.T.
- Principal, interest and taxes. Together, these make up the regular
payment on a mortgage if you elect to include property taxes in your
mortgage payments
I.R.D: IRD is a compensation charge that may
apply if you pay off your mortgage prior to the maturity
date, or pay the mortgage principal down beyond the amount
of your prepayment privileges. for more info go to
:
http://www.mortgagebc.biz/ird
Convertible Mortgage
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A
short term mortgage usually six or twelve months, allowing the
borrower to switch into a longer term at any time without penalty. |
Roll-Over Mortgage
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A
mortgage loan where the interest rate is established 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. |
Mortgage Loan Insurance (High Ratio)
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High ratio
mortgages must be insured through
CMHC
(Canada Mortgage and Housing Corporation) or
Genworth
(G.E.
Capital Corporation).
These Insurers guarantee the risk of lending to home buyers who need
a high ratio mortgage. An insurance premium is paid by the borrower
on behalf of the lender. The insurance premium that is paid to
the
CMHC
is to protect the lender in the event that the mortgage is not paid.
This is not life, disability, or job loss insurance. The insurance
premium is calculated as a percentage of the mortgage amount,
depending on the loan to value, and may be added to the mortgage
amount. To find out about
CMHC
premiums go to :
www.mortgagebc.biz/cmhc
and for the Genworth please go to :
www.mortgagebc.biz/genworth |