Mortgage Glossary

Many lenders will pre-approve a mortgage to a set maximum principal amount before you’ve found the house you want to buy. Pre-Approvals are useful as they can guarantee your interest rate for up to 120 days on fixed-term loans and can help you determine your budget for your next housing purchase. A pre-approval won’t cost you anything and can help you hold on to today’s interest rates.

A portable mortgage is a mortgage that you can transfer over with you to a new property. The benefit of a portable mortgage is the ability to keep the rate and terms of your current mortgage.

This is also known as an NOA. It is the summary form that Revenue Canada Agency sends you after your income tax has been filed. It specifies what you claimed on your taxes last year, as well as the amount of taxes you owe, or the amount of money that you will be received as a tax refund.

The listing of a particular property from Multiple Listing Service (MLS) which includes the particular details of a property. Typically, the most pertinent details are property taxes, maintenance fees and measurements of the property.

The borrower of the mortgage.

The lending institution or banks providing you with the mortgage on your home.

The mortgage term is the length of time you commit to the mortgage rate, lender, and associated mortgage terms and conditions.

A mortgage penalty is a fee built into the contract to prevent or make it difficult for you to break the mortgage, in addition to compensating the provider for the loss of interest income. If the mortgage is terminated before its maturity date, either through the sale of the home, early renewal or discharge, there may be penalties. The applicable penalties would be equal to the greater of the interest rate differential or 3 months interest plus any applicable fees related to the discharge request.

Mortgage Loan Insurance pays the lender in the event the mortgage borrower defaults on making payments. Such insurance is required by law for high ratio mortgages (those for an amount greater than 80% of the value of the property) and may be required under other circumstances. For more information about Mortgage Loan Insurance or to calculate the premium, you can visit CMHC or Genworth websites at www.cmhc.ca or www.genworth.ca or www.canadaguaranty.ca.

Creditor Insurance that pays off the remaining mortgage debt in the event of a borrower’s death.