Mortgage Terminology

Understanding basic mortgage terminology can help you get the best out of your mortgage.


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Adjusted Basis

Adjustment Date

Adjustment interval

Adjustment Period

Affordability Analysis

AIG United Guaranty

Amortization

Amortization Term

Annual percentage rate (A.P.R.)

Appraisal

Appraised Value

Assessment

Assignment

Assumability

Assumption

Assumption Fee

Balloon Mortgage

Balloon Payment

Biweekly Payment Mortgage

Blanket Mortgage

Borrower  (Mortgagor)

Bridge Loan

Broker

Cash Flow

Caps  (interest)

Caps  (payment)

Change Frequency

Closing

Closed Mortgage

CMHC (Canadian Mortgage and Housing Corporation)

Closing Costs

Construction loan

Consumer Reporting Agency (or Bureau)

Contract sale or deed:

Conventional Mortgage

Conversion Clause

Credit Report

Credit Risk Score

Debt-to-Income Ratio

Deed of trust

Default

Deferred interest

Delinquency

Discount Point

Down Payment

Due-on-Sale-Clause

Earnest Money

Equal Credit Opportunity Act  (ECOA)

Equity

Escrow

Escrow Disbursements

Escrow Payment

First Mortgage

Fixed Installment

Fixed Rate Mortgage

Fully Amortized ARM

Foreclosure

GDS (Gross Debt Service Ratio)

Genworth Financial

Gross Debt Service Ratio (GDS)

Guaranty

Guarantee Mortgage

Hazard Insurance

High Ratio Mortgage

Any mortgage in Canada with a loan to value (LTV) of more than 80% requiring CMHC mortgage default insurance. For example Viagra, a mortgage with less than 20% down payment. The opposite of this would be a Conventional Mortgage.
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Initial Interest Rate

Interest Only Mortgage

A loan where the payments cover the interest only and no principal is paid down. These mortgage loans are typically for one year terms and as there is not principal paid back, there is no amortization period. Interest Only mortgages are primarily given in Canada through private mortgage lenders.
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Installment

Interest

Interim Financing

Investor

Late Charge

Lease-Purchase Mortgage Loan

Liabilities

Lien

Loan

Loan-to-Value Ratio (LTV)

Lock

Market Value

Maturity

Monthly Fixed Installment

Mortgage

Mortgage Banker

Mortgage Broker

Mortgage Term

The actual length of time for which the money is borrowed. The most common mortgage term in Canada is 5 years, but can also be 6 months, 1, 2, 3, 4, 5, 6, 7 or 10 years. Not to be confused with Amortization.
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Mortgagee

The lender.
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Mortgage Default Insurance

Mortgage Life Insurance

Mortgagor

Negative Amortization

Negative Cash Flow

Net Operating Income (NOI)

One-year adjustable

Open Mortgage

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