- Agreement of Purchase and Sale - is a contract in which, generally through a real estate agent, the buyer offers to the seller a certain price for a home and if the seller accepts the offer within a stipulated time limit, it becomes a binding agreement. Sometimes, within this time limit, the vendor changes some of the terms and/or conditions of the offer and sends it back to the buyer (called a counter-offer) for acceptance within a specified time. Often called an Offer until accepted.
- Amortization period - is the total mortgage repayment period. It has nothing to do with the length (term) of the loan.
- Appraisal - is an estimate of the property's value for lending purposes.
- CMHC (mortgage) - To protect the lender in case of default, the Canada Mortgage and Housing Corporation provides mortgage insurance for a fee where the down payment is less than 25%. Although the borrower can pay the premium up front, it's usually added to the loan.
- Closing costs - are all the other costs of acquisition, excluding the purchase price of the property.
- Closing date of transaction - is the date on which the buyer finalizes the transaction and takes possession of the property, also called completion date, possession date.
- Condominium - is usually a housing unit in an apartment building or a townhouse complex. The purchaser owns the unit itself and also a share in the common elements for which he/she pays a monthly fee. The common elements are such things as elevators, halls, parking areas, landscaping.
- Conventional or high-ratio mortgage - A conventional mortgage generally doesn't exceed 75% of the purchase price or the appraised value of the property, whichever is lower. To protect the financial institution (mortgagee), not the borrower (mortgagor), a mortgage that exceeds this limit must be insured with CMHC against default, and is referred to as a high-ratio mortgage.
- Deed - is a legal document which gives the purchaser title to the real property. Also called a transfer.
- Deposit - is the amount of money the purchaser presents to the vendor with the Offer on the property, generally through a real estate agent, to show serious commitment on the buyer's part. If the vendor accepts the Offer and sells his/her home to the purchaser, the deposit will be applied to the down payment. If the vendor does not accept the Offer, the deposit will be returned to the purchaser.
- Down payment - is the portion of the purchase price of the property that the buyer puts down (pays) at the time of purchase.
- ELF - electric light fixture
- Equity - is the difference between the current value of the property and what is owed on it - what's left is the owner's equity.
- House/home - is called real property for legal purposes.
- Land Transfer Tax - Government tax paid on all resale homes in Ontario, paid at closing. Tax table link
- Mortgage - is a loan on the purchase of the property. Also called a charge.
- Mortgagee and mortgagor - The lender (creditor) is the mortgagee and the borrower (debtor) is the mortgagor.
- Mortgage term - is the actual length of time that the money is borrowed.
- Mortgage terms - relates to the conditions of repayment of a mortgage, for example, whether prepayments are permitted.
- Multiple Listing Service - (MLS) A system for relaying information about properties for sale.
- Offer or Offer to Purchase - see under Agreement of Purchase and Sale.
- Principal loan amount - is the amount of money borrowed.
- Principal residence - is where a person ordinarily resides.
- Real property - is the land, building(s), and all permanent attachments and improvements to the land, such as a fence, trees.
- Resale home - is generally an existing home that has been or is currently used as a residence.
- Terms - see under Mortgage terms.
- Title - is evidence of legal ownership of land. Land includes any permanent structure(s) on the land.
- Trust account - is a separate bank account in which is deposited all the money received in trust for someone else. For example, in the deposit cheque, the words In Trust should be written after the name of the firm to whom it's payable.
- Vendor - is the seller of the property.
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