Common Realty Terms Explained

Amortization - the number of years it will take to pay off the amount of a mortgage.

Appraisal - the estimate of a property value.

Assessment - the value of a property set by the local municipality. (This assessment is used to determine your property tax.)

Assumable Mortgage - A mortgage held on a property by a seller that can be taken over by the buyer. The buyer begins taking over the payments.

Broker - A real estate professional licensed in Ontario to facilitate the sale or lease of a property.

Closed Mortgage - A mortgage that cannot be prepaid, renegotiated or refinanced without significant penalties.

CMHC - Canadian Mortgage Housing Corporation. Provide loan and mortgage insurance.

Closing/Completion - The day the legal title to property changes hands.

Financial Institute - a bank, credit union, insurance or trust companies.

High Ratio Mortgage - A mortgage for more than 80 per cent of a property's appraised value.

Listing Agreement - contract between the seller and the brokerage company the real estate agent works for.

MLS - multiple listing service: relays information to real estate agents about properties for sale.

Mortgages - A contract between a borrower and a lender where the lender guarantees payments until the debt is repaid.

Mortgage Term - the length of time a lender will loan funds to the borrower.

Open Mortgage - A mortgage that can be prepaid or renegotiated at any time.

Pre-approved Mortgages - the buyer has qualified in advance for a mortgage at a set amount.

Transfer Tax - Payment to the provincial government for transferring property from seller to buyer.

Vendor Take-Back Mortgage - a situation where the sellers use their equity in the property as a means to supply some or all of the mortgage financing in order to sell the property.

Zoning Regulations - Strict guidelines set and enforced by municipal governments regulating what a property may or may not be used for.