A Glossary Of Mortgage Terms
Every aspect of the mortgage product and process has a unique set of terms, acronyms, and phrases for smooth and quick communication among professionals and to avoid misunderstandings. However, these words and phrases can be confusing to anyone who is not part of the daily operations of this industry.
To help you understand the terms, acronyms, and phrases regularly used when applying for a mortgage, expert mortgage broker Angela Milosevic has created this handy reference guide on common mortgage terms. Here you’ll find valuable information allowing you to comprehend and communicate your mortgage needs effectively.
Mortgage
A mortgage is the providing of real property to a lender as security in exchange for debt.
Interest rate
An interest rate is the rate at which interest, a fee paid to the lender for borrowing money, is calculated.
Down payment
A down payment is the amount of a purchaser’s money provided to the vendor from their own resources, and it is not included in a mortgage loan.
Charge/Mortgage
It is the document that indicates that there is a debt registered against the title of a property.
Discharge of Charge/Mortgage
It is the document that indicates that a debt has been removed from the title of a property.
Payment
A payment is a periodic amount, in dollars, required to be made in relation to a mortgage contract. A payment may be interest-only or a blend of interest and principal.
Standard Charge Terms
These are the terms and conditions of the mortgage contract, including the remedies available to the lender upon default by the borrower.
Term
A term is a period of time in which the mortgage contract is in force. After this period of time, the mortgage must be fully repaid or renegotiated.
Title
A title is a term that refers to the ownership of a property. If something is registered “on the title,” it means that it is officially registered against the ownership of the property through the Land Titles Office.
Mortgage default insurance
This is an insurance policy which protects the insured (the lender) against losses suffered by the default of the borrower.
Prepayment options
There are options available to the borrower to prepay a part of their mortgage. These options may or may not include a penalty for this right.
Variable rate
A variable rate is an interest rate that fluctuates based on a lender’s prime rate.
Fixed rate
This refers to the fact that the interest rate is fixed or does not change for the entire term.
Closing costs
These are the costs associated with closing a real estate and mortgage transaction.
The amortization
The amortization refers to the total number of years that it will take to fully repay the amount borrowed and requires a blended periodic payment of both interest and principal.
If you’re looking for more details on mortgages and related terms, reach out to mortgage specialist Angela Milosevic. I am a mortgage broker in Cambridge, Ontario, with over a decade of experience in mortgages. My many years in the mortgage industry have taught me how to handle a broad range of client situations. In fact, I have successfully assisted many clients with home purchases, mortgage refinances for debt consolidation, mortgage refinances for home renovation or investment, mortgages for the self-employed, investment properties, vacation or second home properties, mortgages for those with past or present credit problems and commercial mortgages.
To have a look at all my mortgage services, please click here. If you want to know more about the success of my mortgage solutions, click here. You can also get in touch with me here if you have any questions.