Gradual re-payment of a mortgage loan by means of partial payments
on a regular basis.
An independent estimate of the property value by a certified appraiser
on a specific date.
Bi-weekly payments speed up the repayment of your mortgage since
you are making the equivalent of one extra monthly payment each year.
We urge you to take full advantage of this plan.
Blended Payment Method
All monthly mortgage payments are identical, each being comprised
of part principal and part interest on the outstanding debt for the
chosen term. Early monthly payments by this method are mostly composed
of interest, but as amortization progresses, successive payments will
consist of less interest and more principal, and the later payments
will be composed almost entirely of principal.
Cash Back Mortgage
For a 5 year term cash back mortgage, the borrower will receive a
cash back rebate up to 5% of the amount he or she borrows.
Based on the property appraisal and the borrower's ability to pay,
the lender issues a commitment letter which sets out the terms, conditions
and loan amount under which a lender is prepared to lend in the form
of a mortgage.
Maximum loan to value ratio of 80% based on whichever is less: the
purchase price or the appraised value. Mortgage loan insurance is not
required for conventional mortgages.
High Ratio (CMHC) Mortgages
For loan to value ratios greater than 80%, lenders will require mortgage
insurance to protect against payment default. CMHC uses a sliding scale
insurance premium based on the loan to value ratio.
Interest calculated on a mortgage loan for the number of days between
the closing date and the end of the month. Borrower will have to pay
this interest adjustment amount at his lawyer's office on the closing
Land Holding and Registration
Under joint tenancy, the interest of the deceased automatically transfers
to the survivor of the tenancy. Under Tenancy in Common, the interest
of a deceased tenant's ownership transfers to heirs.
Remaining mortgage amount with the same interest rate is allowed
to be transferred from the existing home to a new location.
The borrower has the privilege to prepay any part or all of the outstanding
balance of a mortgage prior to maturity.
The duration of time a lender is prepared to hold the committed mortgage
rate for you.
If you choose the option to pay the property tax installments with
your monthly mortgage payments, on closing date, your lender will hold
back the necessary funds to cover the current year's property taxes
which are owing.
Variable (Adjustable) Rate Mortgage
The interest rate changes during the term of the loan in response
to changes in the prime lending rate. The rate is
equal to the prime lending rate at any point in time
minus a constant spread. Borrowers are usually charged a slightly lower
interest rate as an incentive during the initial period of the term.
In most cases, the borrowers are allowed to convert to a fixed term
of 3 years or longer.