A Acceleration clause
A clause in your mortgage which allows the lender to demand payment of the outstanding loan balance for various reasons. The most common reasons for accelerating a loan are if the borrower defaults on the loan or transfers title to another individual without informing the lender.Adjustable-rate mortgage (ARM)
A mortgage in which the interest changes periodically, according to corresponding fluctuations in an index. All ARMs are tied to indexes.

Adjustment date
The date the interest rate changes on an adjustable-rate mortgage

Amortization: The number of years it will take to pay back your mortgage loan.

Amortization schedule
A table which shows how much of each payment will be applied toward principal and how much toward interest over the life of the loan. It also shows the gradual decrease of the loan balance until it reaches zero.

Anniversary: Most lenders allow borrowers to make payments against the principal on the anniversary of the mortgage.

Appraisal: The act of estimating the market value of a property.

Appraiser
An individual qualified by education, training, and experience to estimate the value of real property and personal property. Although some appraisers work directly for mortgage lenders, most are independent.

Appreciation: The increase in value in a home from when the home was first purchased.

Approved Lender: A lending institution, authorized by the Government of Canada, to make loans under the terms of the National Housing Act. Only Approved Lenders can negotiate mortgages that require mortgage insurance.

Asset
Items of value owned by an individual. Assets that can be quickly converted into cash are considered "liquid assets." These include bank accounts, stocks, bonds, mutual funds, and so on. Other assets include real estate, personal property, and debts owed to an individual by others.

Assumption Agreement: A legal document signed by the homebuyer that requires the buyer to assume responsibility for the obligations of a mortgage by the builder or the previous owner.


B

Balanced Market: A market condition where the demand for property equals the supply of available properties for sale. There is typically a good number of homes available to choose from at fair and stable prices.

Bankruptcy
By filing in federal bankruptcy court, an individual or individuals can restructure or relieve themselves of debts and liabilities. Bankruptcies are of various types, but the most common for an individual seem to be a "Chapter 7 No Asset" bankruptcy which relieves the borrower of most types of debts. A borrower cannot usually qualify for an "A" paper loan for a period of two years after the bankruptcy has been discharged and requires the re-establishment of an ability to repay debt.

Blended Payment: A mortgage payment that includes principal and interest. It is paid regularly during the term of the mortgage. The payment total remains the same, although the principal portion increases over time and the interest portion decreases.

Buyer’s Market: A market condition where there are a higher number of homes to choose from, than buyers able to purchase. Houses will typically remain un-sold for longer periods and tend to sell at a lower price, allowing for increased negotiating leverage for buyers.



C

Closed Mortgage: A mortgage loan that has a locked-in payment schedule and can not be prepaid or renegotiated before the term's end.

Closing Costs: Costs, in addition to the purchase price of the property, such as legal fees, transfer fees and disbursements. Closing costs typically range from 2% - 4% of a property’s selling price and are payable on the closing day.

Closing Date: The date at which the sale of a property becomes final and the new owner takes possession.

Commitment Letter/Mortgage Approval: Written notification from the mortgage lender to the borrower, that approves the advancement of a specified amount of mortgage funds under specified conditions.

Conditional Offer: An Offer to Purchase that is subject to specified conditions, for example, on approved financing or upon an approved home inspection. Conditional offers typically have a stipulated time limit within which the specified conditions must be met.

Condominium
A type of ownership in real property where all of the owners own the property, common areas and buildings together, with the exception of the interior of the unit to which they have title. Often mistakenly referred to as a type of construction or development, it actually refers to the type of ownership.

Condominium Fees: Payments made by owners of condominiums or townhouses to the property management of a complex that is allocated to pay expenses, such as maintenance, repairs and management costs.

Conventional Mortgage: A mortgage loan up to a maximum of 75% of the lending value of the home. Mortgage loan insurance is usually not required for this type of mortgage.

Counteroffer: When an original offer to the seller is not accepted, the seller may counteroffer.