A Glossary Of Essential Mortgage Terms
Every industry has its own language and terms. These words and phrases can be confusing to anyone who is not part of the daily operations of a specific industry, and the mortgage business is no exception.
To help you understand the terms, acronyms, and phrases regularly used in the mortgage industry, Angela Milosevic has created this handy reference guide. Here you’ll find valuable information allowing you to comprehend and communicate your mortgage needs effectively.
A mortgage broker is a third party who brings borrowers and lenders together. He or she will also gather the paperwork and submit it to the lender for approval.
Homeowner equity or home equity is the market value of the unencumbered interest in your real estate property or home.
High Ratio Mortgage.
A high ratio mortgage is a mortgage acquired with a down payment of less than 20% of the purchase price of the house.
A mortgage maturity date is the final payment date of a loan and when the principal balance and all remaining interest becomes due.
An amortization schedule is the terms of repayment of a loan over time.
The term “principal” refers to the amount due or an owing on a loan which needs to be paid off in full.
A refinance is a change to an interest rate, payment schedule or terms to a previous loan agreement.
A conventional mortgage is a loan which is not secured and is usually up to 80% of the purchase price of a home.
A closed mortgage tends to have a lower rate than an open mortgage but offers less flexibility. Closed mortgages also have prepayment penalties and don’t allow payments of anything over 15% of the original mortgage balance as per the calendar year.
CMHC Insurance Premium.
CMHC stands for Canada Mortgage and Housing Corporation. This corporation assumes responsibility if a borrower defaults on their mortgage loan and reimburses the lender.
A home appraisal is an unbiased opinion of the value of a home. It is conducted by a real estate appraiser, who is trained to estimate market values of real estate.
Fixed rate mortgages are popular as they have the same rate for the entire term of the loan.
Also referred to as a “Bridge Loan,” interim financing is a way of using or pulling out the equity of their home in order to purchase another.
Cash Back Morgage.
A cash back mortgage allows customers to take out a lump sump of money at the time the mortgage is registered.
Portability is a mortgage which can be carried over to a new home.
If you’re looking for a mortgage broker in Cambridge, Ontario, as well as Kitchener, Waterloo, Guelph, Hespeler, Preston, Breslau, Branchton, New Dundee, Hamilton, Burlington, Oakville, Mississauga, Milton, and Brantford, reach out to Angela Milosevic. With over twelve years of experience, I have successfully assisted clients with all their mortgage needs, ensuring they receive the highest standard of service.