Getting a mortgage loan is probably the largest financial commitment you
will ever have to make. There are many industry terms used in the
marketplace today and it is important that you are armed with the
knowledge to get the mortgage that is right for you. Get to know the
following terms and make an informed decision about your mortgage!
GLOSSARY
AMORTIZATION
The gradual reduction of a debt by means of a regular payment. Repayments of
principal and interest in "blended" amounts. The normal amortization period for a
mortgage in Canada is 25 years, but can be as short as 5 years or as long as 25 years.
APPRAISAL
Lenders require an independent assessment of the value of the home you are buying
before agreeing to finance the purchase.
ASSESSED VALUE
The value placed on land and buildings by a government agency for tax purposes.
ASSESSMENT
A tax or charge levied on property by a taxing authority to pay for improvements such
as sidewalks, streets, and sewers.
ASSETS
What the borrower owns. This could include real estate, savings, vehicles, RRSPs,
GICs, stocks, bonds, household goods, etc.
ASSUMPTION (of mortgage)
Buyer assuming responsibility of seller's existing mortgage at the interest rate and
terms as laid out in the original mortgage documents.
BLENDED MORTGAGE
A mortgage that combines the amount owing on an existing mortgage with additional
funds being advanced. The interest rate would be a combination of the rate on the old
loan and the rate in effect at the time of the new financing.
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