Agreement of Purchase and Sale: The contract in which one party agrees to sell and another party
agrees to purchase. This is the form that will be used to submit an offer on a property.

Amortization:The period of time required to reduce a debt (mortgage) to zero when payments are
made regularly.

Appraisal: The process for estimating the market value of a particular property. (The appraisal price
rarely matches the actual purchase price exactly.)

Blended Payment: A mortgage payment that includes principal and interest.

Bridge Financing: Interim financing to bridge between the closing date on the purchase of a new home
and the closing date of the sale on a current home.

Broadloom Where Laid: AKA the carpet where laid. Often seen in a listing on MLS.

Broker: An intermediary between the buyer and seller who is licensed to carry out such services.

Building Permit: A certificate that must be obtained from the municipality by the property owner or
contractor before and building can be erected or modified.

Closing Date: The date of which the sale of the property becomes final and the new owners take

CMHC: Canada Mortgage and Housing Corporation. A crown corporation that administers the National
Housing Act for the federal government. CMHC also creates and sells mortgage loan insurance products.

Commitment: A notice from a mortgage lender to a prospective borrower that the lender will advance
mortgage funds for a specified amount under certain conditions.

Condition: A condition in a contract calls for a specific act to be completed by one of the parties in order
for the agreement to be binding.

Conditional Offer: An offer to purchase subject to specified conditions. These conditions could be
arranging financing or selling a present home. Usually a time limit is given in which time the conditions
must be stipulated or the offer is deemed null and void.

Conventional Mortgage: A mortgage loan of up to a maximum of 75% of the lending value of the
property for which a lender does not require loan insurance.

Debt Service Ratio: The percentage of the borrower’s income that will be used for monthly payments.

Deed: A legal document which is signed by both the vendor and purchaser, transferring ownership. This
document is registered as evidence of ownership.

Default: Non-payment of installments diue under the terms of the mortgage.

Deposit: Payment of money or other valuables in consideration as a pledge for fulfillment of the

Discharge: The removal of all mortgages and financial encumbrances on the property

DOM: As seen on listings. Means “Days on The Market”

Easement: The right acquired for access to or over another person’s l;and for a specific purpose, such as
for a driveway or public utilities.

Elf’s: “Electric Light Fixtures” i.e Chandeliers. Often seen as a short form in a listing on MLS.

GB&E: “Gas Burner and Equipment”, more commonly known as the furnace. Often seen as a short form
in a listing on MLS.

High Ratio Mortgage: Loan that exceeds 75% of the property's lending value, and which is insured
through insurance plan.

Hold-back: An amount of money withheld by the lender during the progress of construction of a house
to ensure that construction is satisfactory at every stage. The amount of hold-back is generally
equivalent to the estimated cost of completion.

Home Inspection: The examination of the house for structural and other defects by an expert selected
by the buyer.

Mortgage Insurance Premium: A premium which is added to the mortgage and paid by the borrower
over the life of the mortgage

Mortgage Life Insurance: A form of reducing term insurance available for all mortgagors. In the event of
death of the owner or one of the owners, the insurance pays the balance owing on the mortgage. The
intent is to protect the survivors from losing their home.

P.I.T: Principal, Interest and Taxes due on a mortgage.

Penalty: A sum of money paid to a lender for the privilege of prepaying a mortgage in part or in full.
Power of Sale:The right of a mortgagee to force the sale of the property without judicial proceedings
default occur.

Prepayment Options: The right to prepay a specified amount of the principal balance. Penalty interest
may be incurred on prepayment options.

Prepayment: Full or partial payment of all or part of the principal, separate from the regular payments
called for under the mortgage agreement.

Principal: The amount owing to the lender at any time.

Rate (interest): The return the lender receives for loaning the money for the mortgage.

Real Estate: Includes real property, leasehold and business whether with or without premises, fixtures,
stock in trade, good of chattels in connection with the operation of a business.

Roll-Over Mortgage: A mortgage loan where the interest rate is established for a specific term. At the
end of this term, the mortgage is said to "roll-over" and the borrower and lender may agree to extend
the loan. If satisfactory terms cannot be agreed upon, the lender is entitled to be repaid in full. In this
case the borrower may seek alternative financing.

Sales Representative: A licensed employee of a Real Estate Broker authorized to trade in real estate.
Statement of Adjustment: A balance sheet statement that indicates credits to the vendor or purchaser,
such as any prepaid taxes or balance due on closing, etc..

Survey: The accurate mathematical measurement of land and building there on.

Term: The length of time which you pay a specific interest rate on your mortgage loan. At the end of the
term you may repay the balance of the loan or re-negotiate at current rates and conditions.

Title: Evidence of Ownership

Vendor Take Back: Where the seller of a property provides some or all of the mortgage financing in
order property.

Zoning Laws: Municipal laws restricting the use of land for special purposes.


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