George Kachulis, Broker Royal LePage Team Realty, Brokerage

Amortization Period-The actual number of years it will take to pay back your mortgage loan.

Amortization-Repayment of a loan in equal installments of principal and interest, rather than interest-only payments.

Appraised Value-An estimate of the value of the property. Conducted for the purpose of mortgage lending by a certified appraiser. This appraisal is not to be confused with a building inspection.

Assumability / Assumption of Mortgage-Allows the buyer to take over the seller's mortgage on the property.The buyer’s agreement to assume the liability under an existing note that is secured by a mortgage. The lender usually must approve the buyer in order to release the original borrower (usually the seller) from liability.

Cap-The limit on how an interest rate or monthly payment can change, either at each adjustment or over the life of the mortgage.

Closed Mortgage-A mortgage that locks you into a specific payment schedule. A penalty usually applies if you repay the loan in full before the end of a closed term.

Condominium Fee-A common payment among owners which is allocated to pay expenses.

Conventional Mortgage-A mortgage loan issued for up to 75% of the property's appraised value or purchase price, whichever is less.

Down Payment-The buyer's cash payment toward the property. The difference between the purchase price and the amount of the mortgage loan.

Equity-The difference between the home's selling value and the debts against it.

High-Ratio Mortgage-A mortgage that exceeds 80% of the home's appraised value. These mortgages must be insured for payment.

Interest Rate-The value charged by the lender for the use of the lender's money. Expressed as a percentage.

Land Transfer Tax, Deed Tax or Property Purchase Tax-A fee paid to the municipal and /or provincial government for the transferring of property from seller to buyer.

Maturity Date-The end of the term, at which time you can pay off the mortgage or renew it.

Mortgagee-The person of the financial institution that lends the money.

Mortgage Insurance-Applies to high-ratio mortgages. It protects the lender against loss if the borrower is unable to repay the mortgage.

Mortgage Life Insurance-Pays off the mortgage if the borrower dies.

Mortgagor-The borrower.

Open Mortgage-Allows partial or full payment of the principal at any time, without penalty.

Portability-A mortgage option that enables borrowers to take their current mortgage with them to another property, without penalty.

Pre-Approved Mortgage-Qualifies you for a mortgage before you start shopping. You know exactly how much you can spend and are free to make a "firm" offer when you find the right home.

Prepayment Privileges-Voluntary payments in addition to regular mortgage payments.

Principal-The amount borrowed or still owing on a mortgage loan. Interest is paid on the principal amount.

Refinancing-Paying off the existing mortgage and arranging a new one or re-negotiating the terms and conditions of an existing mortgage.

Renewal-Re-negotiation of a mortgage loan at the end of a term for a new term.

Second Mortgage-Additional financing. Usually has a shorter term and higher interest rate than the first mortgage.

Term-The length of time the interest rate is fixed. It also indicates when the principal balance becomes due and payable to the lender.

Title-Legal ownership in a property.

Variable-Rate Mortgage-A mortgage with fixed payments, but fluctuates with interest rates. The changing interest rate determines how much of the payment goes towards the principal.

Vendor Take-Back Mortgage-When the seller provides some or all of the mortgage financing in order to sell their property.