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Financial & Real EstateTerms Glossary


Our Financial Terms Glossary is a handy tool that explains common financial and real estate terms in simple language. It includes definitions for words and phrases like "mortgage," "interest rate," "amortization," "capital gains tax," "months of supply," and "average days on market." Each term is clearly defined to help you understand the financial aspects of real estate more easily.

adjustable-rate mortgage 
A mortgage whose interest rate changes periodically based on the changes in a specified index.

adjustment date
The date on which the interest rate changes for an adjustable-rate mortgage (ARM).

adjustment period
The period that elapses between the adjustment dates for an adjustable-rate mortgage (ARM).

In real estate, an amenity refers to a feature or attribute of a property or its surrounding area that enhances its desirability, comfort, or convenience for residents or occupants. Amenities can vary widely and may include both physical features of the property itself, such as swimming pools, fitness centers, and landscaped gardens, as well as services or facilities available nearby, such as schools, parks, shopping centers, or public transportation. These amenities are often considered important factors for potential buyers or tenants when evaluating a property's value and suitability for their lifestyle or needs.

The repayment of a mortgage loan by installments with regular payments to cover the principal and interest.

amortization term
The amount of time required to amortize the mortgage loan. The amortization term is expressed as a number of months. For example, for a 30-year fixed-rate mortgage, the amortization term is 360 months.

annual percentage rate (APR)
The cost of a mortgage stated as a yearly rate; includes such items as interest, mortgage insurance, and loan origination fee (points).

An appraisal is a property's value assessment by a certified real estate appraiser. Appraisers must be registered with the Appraisal Institute of Canada and hold either a CRA or AACI designation.  

appraised value
An estimate of the fair market value of a property determined by a professional real estate appraiser based on various factors such as location, size, condition, and comparable sales.

An increase in the value of a property due to changes in market conditions or other causes. The opposite of depreciation.

Anything of monetary value that is owned by a person. Assets include real property, personal property, and enforceable claims against others (including bank accounts, stocks, mutual funds, and so on).

The transfer of a mortgage from one person to another.

assignment sale | as per pre-construction
An assignment sale is the sale of a pre-construction property prior to the build completion.

assumable mortgage
A mortgage that can be taken over ("assumed") by the buyer when a home is sold.

The transfer of the seller's existing mortgage to the buyer.

assumption clause
A provision in an assumable mortgage that allows a buyer to assume responsibility for the mortgage from the seller. The loan does not need to be paid in full by the original borrower upon sale or transfer of the property.

assumption fee
The fee paid to a lender (usually by the purchaser of real property) resulting from the assumption of an existing mortgage.

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balance sheet
A financial statement that shows assets, liabilities, and net worth as of a specific date.

balloon mortgage
A mortgage that has level monthly payments that will amortize it over a stated term but that provides for a lump sum payment to be due at the end of an earlier specified term.

balloon payment
The final lump sum payment that is made at the maturity date of a balloon mortgage.

bayfront properties
Properties located along Hamilton's waterfront, offering views of Hamilton Harbour and Lake Ontario.

basis point
A basis point is 1/100th of a percentage point. For example, a fee calculated as 50 basis points of a loan amount of $100,000 would be 0.50% or $500.

benchmark price
Benchmark price in real estate is a price that refers to the price of a typical property within a specific real estate market and is measured over a specific amount of time. The benchmark price in a certain neighbourhood is used as a reference point for comparing changes in typical property values over time. For example, it will not include the very unique properties that may be extremely over-priced for that same neighborhood and could possibly skew the numbers if considered. 

A preliminary agreement, secured by the payment of an earnest money deposit, under which a buyer offers to purchase real estate.

biweekly payment mortgage
A mortgage that requires payments to reduce the debt every two weeks (instead of the standard monthly payment schedule). The 26 (or possibly 27) biweekly payments are each equal to one-half of the monthly payment that would be required if the loan were a standard 30-year fixed-rate mortgage, and they are usually drafted from the borrower's bank account. The result for the borrower is a substantial savings in interest.

blanket mortgage
The mortgage that is secured by a cooperative project, as opposed to the share loans on individual units within the project.

A violation of any legal obligation.

bridge loan
A form of second trust that is collateralized by the borrower's present home (which is usually for sale) in a manner that allows the proceeds to be used for closing on a new house before the present home is sold. Also known as "swing loan."

bungalow is a type of single-story house, typically characterized by a low-pitched roof and a horizontal shape. Bungalows often feature a spacious front porch or veranda and are designed for comfortable living on one level, making them popular among homeowners seeking a convenient and accessible layout. These homes can vary in architectural style and may include various design elements such as large windows, open floor plans, and distinctive exterior features. Bungalows are commonly found in suburban and rural areas and are known for their cozy and inviting atmosphere.

A person who, for a commission or a fee, brings parties together and assists in negotiating contracts between them.

buydown mortgage
A temporary buydown is a mortgage on which an initial lump sum payment is made by any party to reduce a borrower's monthly payments during the first few years of a mortgage. A permanent buydown reduces the interest rate over the entire life of a mortgage.

buyers agent
A real estate agent who represents the interests of the buyer in a real estate transaction.

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call option
A provision in the mortgage that gives the mortgagee the right to call the mortgage due and payable at the end of a specified period for whatever reason.

canal properties
Refers to properties located along the Welland Canal, offering unique waterfront living opportunities.

A provision of an adjustable-rate mortgage (ARM) that limits how much the interest rate or mortgage payments may increase or decrease.

capital gains
A capital gain is the increase in a capital asset's value and is realized when the asset is sold. An asset can be a home that is considered an investment property. Capital gains may apply to any type of asset, including investments and those purchased for personal use. The gain may be short-term (one year or less) or long-term (more than one year) and must be claimed on income taxes. Your personal residence is not subject to capital gains.

capital improvement
Any structure or component erected as a permanent improvement to real property that adds to its value and useful life.

cash-out refinance
A refinance transaction in which the amount of money received from the new loan exceeds the total of the money needed to repay the existing first mortgage, closing costs, points, and the amount required to satisfy any outstanding subordinate mortgage liens. In other words, a refinance transaction in which the borrower receives additional cash that can be used for any purpose.

certificate of deposit
Commonly known as a "CD," certificates of deposit bear a maturity date and a specified rate of interest. Penalties may apply for early withdrawal.

certificate of eligibility
A document issued by the federal government certifying a veteran's eligibility for a Department of Veterans Affairs (VA) mortgage.

certificate of reasonable value (CRV)
A document issued by the Department of Veterans Affairs (VA) that establishes the maximum value and loan amount for a VA mortgage.

certificate of title
A statement provided by an abstract company, title company, or attorney stating that the title to real estate is legally held by the current owner.

certified financial planner
CFP® or Certified Financial Planner professionals have demonstrated the knowledge, skills, experience and ethics to examine their clients' entire financial picture, at the highest level of complexity required of the profession, and work with their clients to build a financial plan so that they can Live Life Confidently

chain of title
The history of all of the documents that transfer title to a parcel of real property, starting with the earliest existing document and ending with the most recent.

Moveable personal property that is not permanently attached to a building or land. Examples of chattels include appliances, furniture, and window coverings.

change frequency
The frequency (in months) of payment and/or interest rate changes in an adjustable-rate mortgage (ARM).

CHMC (Canada Mortgage and Housing Corporation) mortgage
Canada Mortgage and Housing Corporation (CMHC) is Canada's national housing agency. Because the lender is taking a risk by offering a home mortgage to someone without the requisite down payment, CMHC allows you to pay a premium up front that is added to the mortgage amount in the event the borrower defaults on the loan.

clear title
A title that is free of liens or legal questions as to ownership of the property.

A meeting at which a sale of a property is finalized by the buyer signing the mortgage documents and paying closing costs. Also called "settlement."

closing cost item
Closing costs are additional expenses incurred by the buyer to close on the property and take ownership. Total closing costs can range between 1.5% – 4% of the purchase price. Closing costs may include legal fees, land transfer taxes, home inspection fees, and title insurance.

closing statement
A closing statement is a form used in a real estate transaction that includes an itemized list of all the buying or selling costs associated with that transaction

closing costs
Closing costs are the expenses over and above the property's price that buyers and sellers incur to complete a real estate transaction. These costs may include loan origination fees, discount points, appraisal fees, title searches, title insurance, surveys, taxes, deed recording fees, and credit report charges.

cloud on title
Any conditions revealed by a title search that adversely affect the title to real estate. Usually clouds on title cannot be removed except by a quitclaim deed, release, or court action.

An asset (such as a car or a home) that guarantees the repayment of a loan. The borrower risks losing the asset if the loan is not repaid according to the terms of the loan contract.

The efforts used to bring a delinquent mortgage current and to file the necessary notices to proceed with foreclosure when necessary.

combination loan
With this type of loan, you receive a first mortgage for 80 percent of the loan amount, and a second mortgage at the same time for the remainder of the balance. If avoiding PMI (mortgage insurance) is important to you, consider combination loans--known as 80/10/10 loans or 80/20's.

combined loan-to-value (CLTV)
The unpaid principal balances of all the mortgages on a property (first and second usually) divided by the property's appraised value.

comparative market analysis (CMA)
A report prepared by a real estate agent to help sellers determine the appropriate listing price for their property by comparing it to similar properties that have recently sold in the area.

A person who signs a promissory note along with the borrower. A co-maker's signature guarantees that the loan will be repaid, because the borrower and the co-maker are equally responsible for the repayment. See endorser.

The fee charged by a broker or agent for negotiating a real estate or loan transaction. A commission is generally a percentage of the price of the property or loan.

commitment letter
A formal offer by a lender stating the terms under which it agrees to lend money to a home buyer. Also known as a "loan commitment."

common areas | common elements
Those portions of a building, land, and amenities owned (or managed) by condominium project's homeowners' association (or a cooperative project's cooperative corporation) that are used by all of the unit owners, who share in the common expenses of their operation and maintenance. Common areas include swimming pools, tennis courts, and other recreational facilities, as well as common corridors of buildings, parking areas, means of ingress and egress, etc.

community property
A form of ownership under which property acquired during a marriage is presumed to be owned jointly unless acquired as separate property of either spouse.

An abbreviation for "comparable properties"; used for comparative purposes in the appraisal process. Comparables are properties like the property under consideration; they have reasonably the same size, location, and amenities and have recently been sold. Comparables help the appraiser determine the approximate fair market value of the subject property.

compound interest
Compound interest is interest calculated on both the principal amount of money, like a loan or deposit, and on the interest payable or earned on that principal amount. So, in very basic terms, compound interest is interest calculated on principal and interest.

condo or condominium
A condominium, or condo, is a type of residential property where individuals own their units within a larger complex or building. Unit owners share ownership and responsibility for common areas and facilities, managed by a homeowners' association.

condominium conversion
Changing the ownership of an existing building (usually a rental project) to the condominium form of ownership.

conventional loan or mortgage
A conventional mortgage is a loan-to-value (LTV) ratio mortgage where you pay down 20% or more of the property's value and get a loan value equivalent to at least 80% of the property purchase price.

The legal process of transferring property ownership from one party to another, including the preparation and review of legal documents, title searches, and property registration.

construction loan
A short-term, interim loan for financing the cost of construction. The lender makes payments to the builder at periodic intervals as the work progresses.

consumer reporting agency (or bureau)
An organization that prepares reports that are used by lenders to determine a potential borrower's credit history. The agency obtains data for these reports from a credit repository as well as from other sources. Along with millions of other Canadians, you have a credit history that is kept on file by companies called credit reporting agencies. They track how you use credit products, such as credit cards and loans, and pay your bills. This information is used to create your credit report and credit score.

A condition that must be met before a contract is legally binding. For example, home purchasers often include a contingency that specifies that the contract is not binding until the purchaser obtains a satisfactory home inspection report from a qualified home inspector.

conventional mortgage
A mortgage that is not insured or guaranteed by the federal government.

convertibility clause
A provision in some adjustable-rate mortgages (ARMs) that allows the borrower to change the ARM to a fixed-rate mortgage at specified timeframes after loan origination.

convertible ARM
An adjustable-rate mortgage (ARM) that can be converted to a fixed-rate mortgage under specified conditions.

cooperative (co-op)
A type of multiple ownership in which the residents of a multiunit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit.

corporate relocation
Arrangements under which an employer moves an employee to another area as part of the employer's normal course of business or under which it transfers a substantial part or all of its operations and employees to another area because it is relocating its headquarters or expanding its office capacity.

counter offer
A response by the seller to a buyer's offer, proposing different terms than those originally offered by the buyer.

A clause in a mortgage that obligates or restricts the borrower and that, if violated, can result in foreclosure.

CPP (Canada Pension Plan)
is a contributory, earnings-based social program. It is designed to protect the contributor and their family against the loss of income associated with death, disability and retirement.

credit score
A credit score is a prediction of your credit behavior, such as how likely you are to pay a loan back on time, based on information from your credit reports. Credit scores are important measures of credit behavior when buying a home. 

credit repository
An organization that gathers, records, updates, and stores financial and public records information about the payment records of individuals who are being considered for credit.

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days on market | average days on market (DOM) | real estate statistic
Reflects the average time it takes for homes to sell, indicating the market's speed. Shorter DOM suggests a seller's market, while longer DOM points to a buyer's market.

debt counseling
Financial counseling services provided to individuals facing mortgage affordability challenges to help them manage their debts and explore options to avoid foreclosure.

The legal document conveying title to a property.

deed in lieu
A deed given by a mortgagor to the mortgagee to satisfy a debt and avoid foreclosure.

deed of trust
The document used instead of a mortgage; title is conveyed to a trustee.

Failure to make mortgage payments on a timely basis or to comply with other requirements of a mortgage.

The Buyer pays a real estate deposit upon a successful Purchase and Sale Agreement for a home or condominium. The deposit is to provide security to the Seller in the act of good faith that the Buyer has a financial stake in the agreement.

A decline in the value of property; the opposite of appreciation.

A decline in the value of property; the opposite of appreciation.

down payment
A down payment is the amount of money you put towards the purchase of a home. Your lender deducts the down payment from the purchase price of your home. Your mortgage covers the rest of the price of the home. The minimum amount you need for your down payment depends on the purchase price of the home. If your down payment is less than 20% of the price of your home, you’ll typically need to buy mortgage loan insurance.

due-on-sale provision
A provision in a mortgage that allows the lender to demand repayment in full if the borrower sells the property that serves as security for the mortgage.

duplexed home
A building divided into two separate units, each with its own entrance, typically side by side or one above the other.

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earnest money deposit
A deposit made by the potential home buyer to show that he or she is serious about buying the house.

A right of way giving persons other than the owner access to or over a property.

effective age
An appraiser's estimate of the physical condition of a building. The actual age of a building may be shorter or longer than its effective age.

effective gross income
Normal annual income including overtime that is regular or guaranteed. The income may be from more than one source. Salary is generally the principal source, but other income may qualify if it is significant and stable.

electronic funds transfer (EFT)
EFT allows account holders to transfer funds from an account electronically. This method of transfer is not only highly secure, but also extremely efficient and easy to transact.

Anything that affects or limits the fee simple title to a property, such as mortgages, leases, easements, or restrictions.

A person who signs ownership interest over to another party. Contrast with co-maker.

A homeowner's financial interest in a property. Equity is the difference between the fair market value of the property and the amount still owed on its mortgage.

escarpment views
Properties with views of the Niagara Escarpment which runs through the region and offers scenic vistas.

The ownership interest of an individual in real property. The sum total of all the real property and personal property owned by an individual at time of death.

estate planning
Estate planning is the process of anticipating and arranging for the management and disposal of a person's estate during the person's life in preparation for a person's future incapacity or death. 

estate trustee
An Estate Trustee (also known as an “executor”) is the person you appoint as the executor of your Will and the Trustee of your estate. Choosing your Estate Trustee is one of the most important decisions in making a Will as he or she takes charge of your affairs after your pass away.

The lawful expulsion of an occupant from real property. The legal process of removing occupants from a property following foreclosure or power of sale to transfer possession to the new owner (usually the lender or purchaser at auction).

eviction notice
A legal notice served by the landlord to the tenant to terminate the tenancy agreement and vacate the rental unit, typically for non-payment of rent, breach of lease terms, or other violations of the tenancy agreement.

examination of title
The report on the title of a property from the public records or an abstract of the title.

An executor is the person who handles a deceased person's estate, making sure all property is distributed according to the decedent's wishes and that all debts are paid.

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fair market value
The highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept.

fee simple
The greatest possible interest a person can have in real estate.

finder's fee
A fee or commission paid to a mortgage broker for finding a mortgage loan for a prospective borrower.

financial planning
Financial Planning is about preparing today for your future life so that you continue to meet all your goals and dreams independently. This includes setting your retirement goals, estimating the amount of money you will need, and investing to grow your retirement savings. Every retirement plan is unique.

first adjustment
When you can expect the first rate adjustment in your ARM loan.

first mortgage
A mortgage that is the primary lien against a property.

first time home buyer
Being considered a first-time home buyer in Ontario usually means you have never owned a home, though there are exceptions, such as those who have had a separation or divorce. That also holds true if you owned property that you didn't technically buy

Financial Consumer Agency of Canada (FCAC)
The Financial Consumer Agency of Canada is an agency of the Government of Canada that enforces consumer protection legislation, regulations and industry commitments by federally regulated financial entities. The Financial Consumer Agency of Canada is responsible for protecting the rights and interests of consumers of financial products and services.

financial goals 
Financial goals are the personal, big-picture objectives you set for how you'll save and spend money. They can be things you hope to achieve in the short term or further down the road. Either way, it's often easier to reach your goals if you identify them in advance.

fixed-rate mortgage (FRM)
A mortgage in which the interest rate does not change during the entire term of the loan.

fixed second mortgage
See home equity loan.

In real estate, fixtures are permanent items attached to a property, like built-in appliances or light fixtures, that are included in the sale unless stated otherwise.

float down option
An option to choose a lower rate within 30 days before the closing of your loan and "float down" to a lower rate than the previously locked-in rate. This allows you to pick the best rate within that time period.

flood insurance
Insurance that compensates for physical property damage resulting from flooding. It is required for properties located in federally designated flood areas.

The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.

Refers to owning both the land and the building outright, without any time limit on ownership. The owner has full control over the property and can make modifications or improvements as desired.

fully amortized ARM
An adjustable-rate mortgage (ARM) with a monthly payment that is sufficient to amortize the remaining balance, at the interest accrual rate, over the amortization term.

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A guardian is the person who manages the assets of a minor child, while a custodian is the person who assumes physical custody. However, these roles are often filled by the same person – including in a will made with Willful.

goods and services tax (GST) and harmonized sales tax (HST)
The goods and services tax (GST) is a tax that you pay on most goods and services sold or provided in Canada. In Ontario, the GST has been blended with the provincial sales tax and is called the harmonized sales tax (HST)

good faith estimate
An estimate of charges which a borrower is likely to incur in connection with a settlement.

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hazard insurance
Insurance protecting against loss to real estate caused by fire, some natural causes, vandalism, etc., depending upon the terms of the policy.

home equity line of credit
a credit line that is secured by a second deed of trust on a house. Equity lines of credit are revolving accounts that work like a credit card, which can be paid down or charged up for the term of the loan. The minimum payment due each month is interest only.

home equity loan
a loan secured by a second deed of trust on a house, typically used as a home improvement loan.

home improvement mortgage loan
An alternative financing option that allows low- and moderate-income home buyers to obtain 95 percent financing for the purchase and improvement of a home in need of modest repairs. The repair work can account for as much as 30 percent of the appraised value.

home inspection
An examination of the property by a professional home inspector to identify any structural or mechanical issues that may affect its value or safety.

home purchase assistance
Assistance provided to individuals or families relocating within Canada to help them purchase a new home in their destination city or province. This may include identifying suitable properties, negotiating purchase contracts, and coordinating inspections and closing.

home sale assistance
Assistance provided to individuals or families relocating within Canada to help them sell their current home. This may include marketing the home, coordinating showings, and negotiating offers.

housing market
The Housing market can refer to: The economics of real-estate used for residential purposes; see Real estate economics. Real estate business - buying, selling, or renting real estate (land, buildings, or housing).

housing ratio
The ratio of the monthly housing payment in total (PITI - Principal, Interest, Taxes, and Insurance) divided by the gross monthly income. This ratio is sometimes referred to as the top ratio or front end ratio.

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interest rate

The interest rate is the amount a lender charges a borrower and is a percentage of the principal—the amount loaned. The interest rate on a loan is typically noted on an annual basis and expressed as an annual percentage rate (APR). 1. An interest rate can also apply to a savings account or certificate of deposit (CD).

inventory levels | active listings | real estate statistic
Shows the number of homes currently available for sale, indicating supply levels. Low inventory often means higher competition and potential price increases.

investment returns
The return on investment is the profit you make as a result of your investments. ROI is generally defined as the ratio of net profit over the total cost of the investment. ROI is most useful to your business goals when it refers to something concrete and measurable, to identify your investment's gains and financial returns.

impound account
An impound account is an account established by the lender to pay a borrower's tax and insurance costs. The borrower's monthly mortgage payment is then increased to cover these costs, with the additional amount being held in the impound account and disbursed by the lender when the payments are due. Lenders typically prefer this arrangement because it reduces the possibility of a lapse in tax or insurance payments that could diminish the value of the lender's investment (your house). Therefore, while it is often possible to opt out of an impound account it will result in additional charges.

interest-only loan option
Loan payments have two components, principal and interest. An interest-only loan has no principal component for a specified period of time. These special loans minimize your monthly payments by eliminating the need to pay down your balance during the interest-only period, giving you greater cash flow control and/or increased purchasing power.

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jumbo mortgage
The current loan limit for a conforming loan is $417,000. Loan amounts of $359,651 and above are considered non-conforming or jumbo mortgages and are usually subject to higher pricing.

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The owner of a property who leases or rents it to a tenant in exchange for rent payments.

land registry office
Government offices responsible for recording and maintaining official records of land ownership, including deeds, mortgages, and property titles.

land transfer tax
A tax imposed by provincial and municipal governments on the transfer of property ownership. The tax amount is based on the property's purchase price and varies by province and municipality.

A type of property ownership where the buyer holds the right to use and occupy the property for a specified period, typically through a lease agreement with the owner of the land.

legal considerations for sellers
Buyers and sellers have different legal considerations when it comes to real estate transactions. Sellers must resolve any outstanding liens or encumbrances and facilitate a smooth transfer of ownership.

legal considerations for Buyers
Buyers and sellers have different legal considerations when it comes to real estate transactions. For buyers, the focus is on obtaining clear title to the property and securing financing.

The bank, mortgage company, or mortgage broker offering the loan.

An encumbrance against property for money due, either voluntary or involuntary.

lifetime cap
A provision of an ARM that limits the highest rate that can occur over the life of the loan.

listing agreement
A contract between a property owner and a real estate broker, authorizing the broker to represent and market the property for sale.

listing service
This is a more generic term that encompasses various platforms or systems where real estate listings are compiled and shared.

loan to value ratio (LTV)
The unpaid principal balance of the mortgage on a property divided by the property's appraised value. The LTV will affect programs available to the borrower and generally, the lower the LTV the more favorable the terms of the programs offered by lenders.

lock period
The amount of time that a lender will guarantee a loan's interest rate. Once you've locked in the interest rate on a loan, the lender will guarantee that rate for a certain period of time, usually for 30, 45 or 60 days.

A written agreement guaranteeing the home buyer a specified interest rate provided the loan is closed within a set period of time. The lock-in also usually specifies the number of points to be paid at closing.

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The number of percentage points a lender adds to the index value to calculate the ARM interest rate at each adjustment period.

market fluctuations | real estate market fluctuations
Market fluctuations, within the context of real estate, refer to the periodic changes in supply and demand dynamics, economic conditions, and investor sentiment that influence property values and market activity. These fluctuations can impact factors such as property prices, rental rates, housing inventory levels, and buyer/seller behavior. Market fluctuations are influenced by various factors, including interest rates, employment levels, consumer confidence, government policies, and overall economic conditions. Understanding and monitoring market fluctuations is essential for real estate investors, buyers, sellers, and industry professionals to make informed decisions and adapt to changing market conditions.

maturity date
Loan maturity date refers to the date on which a borrower's final loan payment is due. Once that payment is made and all repayment terms have been met, the promissory note that is a record of the original debt is retired. In the case of a secured loan, the lender no longer has a claim to any of the borrower's assets.

median sale price | real estate statistic
Indicates the middle point of home prices in a given area, helping clients understand the overall market trend.  Compare the median price with previous periods (monthly, quarterly, yearly) to show market appreciation or depreciation.

MLS® System (Multiple Listing Service)
multiple listing service (MLS) is a database established by cooperating real estate brokers to provide data about properties for sale. An MLS allows brokers to see one another's listings of properties for sale with the goal of connecting homebuyers to sellers.

months of supply | real estate statistic
Measures how long it would take to sell all current listings at the current sales pace. Less than 6 months typically signifies a seller’s market, while more than 6 months suggests a buyer’s market.

mortgage pre-qualification
Mortgage pre-qualification is an initial assessment conducted by a lender to estimate how much a potential borrower may be eligible to borrow for a home loan. This process typically involves providing basic financial information such as income, assets, and debts, but it does not require verification or a detailed analysis of credit history. It is the first step to homeownership.

mortgage pre-approval
Mortgage preapproval is a thorough evaluation conducted by a lender to determine the maximum loan amount a potential borrower can qualify for based on their financial history, creditworthiness, and other relevant factors. Mortgage preapprovals require a formal application process with documentation and everything will be verified.

A legal document that pledges a property to the lender as security for payment of a debt

mortgage affordability
Mortgage affordability is being able to comfortably repay your mortgage repayments each month, alongside any other debts you already have, your household bills and living expenses. It means your home loan is affordable.

mortgage arrears
The amount of overdue mortgage payments owed by a borrower to the lender. Falling into mortgage arrears can lead to foreclosure proceedings.

mortgage disability insurance
A disability insurance policy which will pay the monthly mortgage payment in the event of a covered disability of an insured borrower for a specified period of time.

mortgage insurance (MI)
Insurance written by an independent mortgage insurance company protecting the mortgage lender against loss incurred by a mortgage default. Usually required for loans with an LTV of 80.01% or higher.

mortgage calculator
Mortgage calculators are used by consumers to determine monthly repayments, and by mortgage providers to determine the financial suitability of a home loan applicant.

mortgage strategy
A mortgage strategy is tailored to you and your overall financial plan and is designed to get you the mortgage that will help you stay on track with all your financial goals.

The person or company who receives the mortgage as a pledge for repayment of the loan. The mortgage lender.

The mortgage borrower who gives the mortgage as a pledge to repay.

mountain homes
Refers to properties located on or near the Niagara Escarpment, offering scenic views and access to hiking trails.

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negative amortization
Negative Amortization, or "deferred interest," occurs when the mortgage payment is less than a loan's accruing interest. This causes a loan's balance to grow instead of reduce or "amortize."

new listings | real estate statistic
Tracks the flow of new properties entering the market.Helps in understanding if the market is getting more competitive with new options or if inventory is tightening.

non-conforming loan
Non-conforming mortgage loans are a subset of conventional mortgage loans and are broadly defined as having higher-risk attributes or deficiencies, relative to other conventional mortgages. OSFI expects FRFIs to develop and maintain a comprehensive and risk-based definition for non-conforming loans in their RMUPs.

notice of default
A formal notice issued by the lender to the borrower informing them that they are in default on their mortgage and outlining steps to remedy the situation to avoid foreclosure or power of sale.

notice to enter
A notice provided by the landlord to the tenant to inform them of the landlord's intent to enter the rental unit for purposes such as inspections, repairs, or showings to prospective tenants or buyers.

notice to vacate
A formal notice provided by the tenant to the landlord indicating their intention to move out of the rental property, typically required before the end of the lease term or when terminating a month-to-month rental agreement.

number of closed sales | real estate statistic
Indicates the volume of real estate activity, reflecting market demand. Compare with past data to assess market health and trends.

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A formal proposal by a buyer to purchase a property at a specified price and under certain terms and conditions.

offer to purchase
A legally binding document submitted by a buyer to a seller outlining the terms and conditions of the buyer's offer to purchase the property.

offer presentation
The meeting at which the seller's real estate agent presents offers from potential buyers to the seller for consideration.

occupancy rate
The occupancy rate is the ratio of used or rented space to the total amount of available space. The analysts use occupancy rates when discussing housing, hospitals, hotels, bed-and-breakfasts, and rental units, among other categories.

old age security (OAS)
The Old Age Security (OAS) pension is a monthly payment you can get if you are 65 and older. In most cases, Service Canada will be able to automatically enroll you for the OAS pension if sufficient information is available. Service Canada will inform you if you have been automatically enrolled

origination fee
A fee imposed by a lender to cover certain processing expenses in connection with making a real estate loan. Usually a percentage of the amount loaned, such as one percent.

owner financing
A property purchase transaction in which the property seller provides all or part of the financing.

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pending sales | real estate statistic
Shows the number of homes under contract, indicating future closed sales. Higher pending sales can suggest a strengthening market.

periodic cap
The maximum rate increase for a specific period for a specific loan (ARM) only.

Principal, interest, taxes and insurance--the components of a monthly mortgage payment.

power of attorney
A power of attorney is a legal document that you sign to give one person, or more than one person, the authority to manage your money and property on your behalf.

power of sale
In Ontario, instead of foreclosure, lenders may enforce their security interest in the property through a power of sale, which allows them to sell the property to recover the outstanding debt.

points or mortgage points
Charges levied by the mortgage lender and usually payable at closing. One point represents 1% of the face value of the mortgage loan.

A preliminary approval for a mortgage loan based on the borrower's financial information, credit history, and income verification. It helps homebuyers determine their purchasing power and strengthens their offer when making an offer to purchase.

pre-construction real estate / pre-construction property
Pre-construction real estate, also known as pre-construction property, refers to homes or properties that are purchased before they are built or completed. Buyers invest in pre-construction properties based on floor plans, renderings, and promises from developers, rather than physical inspection of the completed property. These properties are typically part of a planned development that is still in the planning or construction phase. Buyers may have the opportunity to customize features and finishes according to their preferences before the property is built.

pre-construction developer
A Pre-Construction Developer is a real estate company or entity responsible for planning, financing, and overseeing the development of a property before construction begins. These developers typically acquire land, secure permits, and design the project's layout and specifications. They may also handle marketing and sales efforts to attract buyers or investors before the construction phase begins. Pre-construction developers play a crucial role in bringing new properties to market, including residential, commercial, or mixed-use developments. Their responsibilities encompass coordinating various aspects of the project, such as architectural design, construction timelines, budgeting, and compliance with local regulations and building codes.

Those expenses of property which are paid in advance of their due date and will usually be prorated upon sale, such as taxes, insurance, rent, etc.

prepayment penalty
A charge imposed by a mortgage lender on a borrower who wants to pay off part or all of a mortgage loan in advance of schedule.

preapproval | mortgage
Mortgage preapproval is a thorough evaluation conducted by a lender to determine the maximum loan amount a potential borrower can qualify for based on their financial history, creditworthiness, and other relevant factors. Mortgage preapprovals require a formal application process with documentation and everything will be verified.

prequalification | mortgage
Mortgage pre-qualification is an initial assessment conducted by a lender to estimate how much a potential borrower may be eligible to borrow for a home loan. This process typically involves providing basic financial information such as income, assets, and debts, but it does not require verification or a detailed analysis of credit history. It is the first step to homeownership.

price reductions | real estate statistic
Reflects seller behavior and market pressure. An increase in price reductions can indicate a softening market.

This term refers to the total amount of money originally deposited into a Savings or CD account. When taking out a loan however, it refers to the amount of debt, not including interest.

price per square foot | real estate statistic
Offers a normalized view of home prices, making it easier to compare different properties and areas.  Track changes over time to provide insights into market value trends.

private mortgage insurance (PMI)
Insurance provided by nongovernment insurers that protects lenders against loss if a borrower defaults. Fannie Mae generally requires private mortgage insurance for loans with loan-to-value (LTV) percentages

Probate is the process of the courts formally accepting a will, or, if the deceased did not have a will, appointing someone to act on their behalf. The process is designed to verify that the testator has passed away, that that person was the author of the will, and that it's a valid will.

property value
Property value refers to the price a potential buyer is willing to pay. This price depends on several factors, such as the size of the property parcel, its geographic location, and other features, such as the proximity to amenities or the number of bedrooms and bathrooms.

property database
Some regions may refer to the MLS as a property database or real estate database.

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qualifying ratios
The ratio of your fixed monthly expenses to your gross monthly income, used to determine how much you can afford to borrow. The fixed monthly expenses would include PITI along with other obligations such as student loans, car loans, or credit card payments.

quiet enjoyment
The legal right of the tenant to peacefully and undisturbedly enjoy the rental property without interference from the landlord or others.

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ranch-style home
A single-story house with a long, low profile and a simple floor plan, often with a spacious layout.

rate cap
The annual rate of interest on a loan, expressed as a percentage of 100.

rate cap
A limit on how much the interest rate can change, either at each adjustment period or over the life of the loan.

rate lock-in
A written agreement in which the lender guarantees the borrower a specified interest rate, provided the loan closes within a set period of time.

real estate law
Real estate law encompasses the purchase and sale of real property, meaning land and any structures on it. It also covers legal issues related to anything attached to the property or structures, such as appliances and fixtures.

real estate market stats
Real estate market stats are quantitative data and metrics that reflect the current conditions, trends, and performance of the real estate market. These statistics help buyers, sellers, investors, and professionals understand and analyze the market dynamics, enabling informed decision-making. 

real estate listing platform
This term emphasizes the function of the MLS as a platform for listing and searching for real estate properties.

realtor database
Since real estate agents (Realtors) often utilize the MLS extensively, it might be referred to as a Realtor database or Realtor listing service.

Compensation received from a wholesale lender which can be used to cover closing costs or as a refund to the borrower. Loans with rebates often carry higher interest rates than loans with "points" (see above).

redemption period
In some Canadian provinces, borrowers may have a redemption period following foreclosure or power of sale during which they can pay off the outstanding debt and reclaim ownership of the property.

The process of paying off one loan with the proceeds from a new loan using the same property as security.

rent receipt
A written document provided by the landlord to the tenant confirming the payment of rent, including details such as the amount paid, date of payment, and method of payment.

rental agreement/lease
A legally binding contract between the landlord and tenant that outlines the terms and conditions of the rental arrangement, including rent amount, lease duration, and responsibilities of both parties.

rental application
A form completed by prospective tenants that provides information about their background, employment, income, and rental history, which landlords use to screen potential tenants.

rental income or rent
Rental income is income you earn from renting property that you own or have use of. You can own the property by yourself or with someone else. Rental income includes income from renting: houses. apartments.

resale real estate / resale property
Resale real estate, also known as resale property, refers to homes or properties that have previously been owned or occupied before being listed for sale again. These properties have already been built and have had previous owners, distinguishing them from new constructions or pre-construction properties. Resale real estate comes in various ages, conditions, and locations, offering buyers a diverse range of options to choose from.

retirement benefits
Retirement benefits are benefits payable to the member of the pension scheme on retirement or earlier withdrawal from service, including retirement pensions

retirement communities
A retirement community is a residential community or housing complex designed for older adults who are generally able to care for themselves. Niagara Region is known for its retirement communities and age-friendly neighborhoods catering to retirees.

retirement needs and expenses
To estimate your retirement expenses, taking into account factors such as housing, healthcare, transportation, food, and leisure activities. Consider inflation and potential healthcare costs as you project your future expenses.

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sale to list price ratio | real estate statistic
Shows the percentage of the list price that homes are selling for, indicating negotiating power. A ratio above 100% suggests homes are selling above list price, common in a seller’s market.

seller carry back
An agreement in which the owner of a property provides financing, often in combination with an assumed mortgage.

seller's disclosure
A document in which the seller discloses any known defects or issues with the property to potential buyers.

An item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition. For example, the deposit by a borrower with the lender of funds to pay taxes and insurance premiums when they become due, or the deposit of funds or documents with an attorney or settlement agent to be disbursed upon the closing of a sale of real estate.

settlement account
The account in which a mortgage servicer holds the borrower's settlement payments prior to paying property expenses.

settlement analysis
The periodic examination of settlement accounts to determine if current monthly deposits will provide sufficient funds to pay taxes, insurance, and other bills when due.

settlement collections 
Funds collected by the servicer and set aside in an settlement account to pay the borrower's property taxes, mortgage insurance, and hazard insurance.

settlement disbursements
The use of settlement funds to pay real estate taxes, hazard insurance, mortgage insurance, and other property expenses as they become due.

settlement payment
The portion of a mortgagor's monthly payment that is held by the servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. Known as "impounds" or "reserves".

single-family home
A standalone house designed for one family, typically with its own yard or outdoor space.

simple interest
An amount earned on an account holder's principal, according to a specified rate. This does not include any compounding interest.

stated/documented income
Some loan products require only that applicants "state" the source of their income without providing supporting documentation such as tax returns.

steel town homes
Refers to properties located in neighborhoods historically associated with Hamilton, Ontario's steel industry, such as the North End and Stipley.

storey and a half house or 1.5 storey home
A storey and a half house, also known as a 1.5-storey house, is a type of residential structure that typically features one full storey (level) and a partial second storey. In this design, the second storey is often situated within the roof space, resulting in sloped ceilings and dormer windows. Storey and a half houses combine elements of both single-storey and two-storey homes, offering the benefits of a compact footprint with additional living space on the upper level. These homes are popular in areas where land is limited or where zoning regulations restrict the height of buildings. They often provide a charming aesthetic and may feature unique architectural details such as exposed rafters or gables.

Similar to a condominium, a strata refers to a type of property ownership where individual units within a building or complex are owned by separate individuals, and common areas are jointly owned and managed by a strata corporation.

If you are refinancing your first mortgage and have an existing second or home equity line, one option is to "subordinate" the second mortgage: request that your second mortgage holder go back into the second lien position when you replace your existing first mortgage with the new refinance loan.

A print showing the measurements of the boundaries of a parcel of land, together with the location of all improvements on the land and sometimes its area and topography.

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Tarion Warranty Corporation 
A non-profit corporation in Ontario that administers the Ontario New Home Warranties Plan Act, providing warranty coverage for newly constructed homes in the province.

temporary housing
Short-term housing accommodations provided to individuals or families during the relocation process within Canada while they search for a permanent residence.

A person who occupies a rental property under a lease or rental agreement with the landlord.

tenant insurance
Insurance purchased by the tenant to protect their personal belongings and liability for damages within the rental property.

tenant rights
The legal protections afforded to tenants under provincial tenancy laws, including rights related to privacy, maintenance, repairs, and eviction proceedings.

tenants in common
An undivided interest in property taken by two or more persons. The interest need not be equal. Upon death of one or more persons, there is no right of survivorship.

title insurance
Insurance against loss resulting from defects of title to a specifically described parcel of real property.

title search
An investigation into the history of ownership of a property to check for liens, unpaid claims, restrictions or problems, to prove that the seller can transfer free and clear ownership.

total debt ratio
Monthly debt and housing payments are divided by gross monthly income. Also known as Obligations-to-Income Ratio or Back-End Ratio.

tourism-friendly homes
Properties marketed for their proximity to tourist attractions such as Niagara Falls, Niagara-on-the-Lake, and various wine routes.

tri-plexed homes
A triplex is a residential building divided into three separate units, each with its own entrance. Typically, a triplex consists of three vertically stacked units, with one unit on each floor. Each unit may have its own living space, kitchen, bathroom, and bedrooms. Triplexes are commonly found in urban areas and provide an alternative housing option for multiple families while allowing for individual privacy and ownership.

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vacancy rate
The vacancy rate is the percentage of all available units in a rental property, such as a hotel or apartment complex, that are vacant or unoccupied at a particular time. A vacancy rate is the opposite of the occupancy rate, which is the percentage of units in a rental property that are occupied.

variable rate
An interest rate that may change once an account opens.

vendor take-back
A vendor take-back mortgage is where the seller of the home extends a loan to the buyer to secure the sale of the property. Sometimes referred to as a seller take-back mortgage, this type of loan can benefit both the buyer and the seller. The buyer might be able to purchase property above their bank-determined financing limit, and the seller can get his property sold.

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A will is a legal document that sets forth your wishes regarding the distribution of your property and the care of any minor children after your death. If you die without a will, those wishes may not be carried out. Further, your heirs may end up spending additional time, money, and emotional energy to settle your affairs after you're gone.

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Unlocking Real Estate Insights: Your Comprehensive Financial Terms Glossary

Welcome to our Financial Terms Glossary, your go-to resource for understanding the key financial terminology relevant to buying and selling homes in the vibrant Niagara and Hamilton real estate markets. As the top and best real estate professionals in the region, we recognize the importance of empowering our clients with knowledge to make informed decisions in their real estate transactions.

Our glossary serves as a powerful tool for demystifying complex financial terms commonly encountered throughout the real estate journey in Niagara and Hamilton. Whether you're embarking on your first home purchase or expanding your investment portfolio, a clear understanding of these terms is vital for making informed decisions and achieving success in the local real estate market.

Explore our glossary to find definitions for essential terms such as "amortization," "closing costs," "capital gains," and more, to help you understand your real estate experience and the Niagara and Hamilton real estate markets. Each definition is presented in straightforward language, making it easy to grasp even the most intricate concepts. With this knowledge at your fingertips, you'll be equipped to navigate the financial aspects of real estate transactions in Niagara and Hamilton with confidence and clarity.

Whether you're researching financing options, evaluating investment opportunities, or preparing for the closing process, our Financial Terms Glossary is here to support you every step of the way in your Niagara and Hamilton real estate journey. Take advantage of this valuable resource to unlock real estate insights and make informed decisions that align with your goals.

Start exploring our Financial Terms Glossary today and empower yourself to navigate the world of Niagara and Hamilton real estate with confidence and expertise. Because when it comes to buying or selling a home in these vibrant markets, knowledge truly is power, and we're committed to helping you succeed.