OPEN MORTGAGE
A mortgage which allows for extra payments, principal reductions or full payment at
anytime without penalty.
PORTABILITY
The ability to transfer your mortgage including rate and terms, from your existing
property to a new property.
PREPAYMENT CLAUSE
A clause in a mortgage agreement that allows you to pay off all or a percentage of the
mortgage before the maturity date.
PREPAYMENT PENALTY
A fee charged by a lender when the borrower prepays all or a part of a mortgage in excess
of the regular payments allowed by the mortgage terms.
PRINCIPAL
The money borrowed, not including any accrued interest.
QUALIFYING RATIO
A ratio that is calculated by a lender to decide how much a buyer can borrow.
RATE COMMITMENT
A lenders commitment to offer to hold a specific rate for a certain length of time. Rate
commitments can vary from 30 to 180 days.
REFINANCE
To pay in full and discharge a mortgage with the proceeds of a new mortgage.
SECOND MORTGAGE
A mortgage registered against real property which is already encumbered with one
mortgage. Date and time of registration determines which is first and which is second.
STRATA FEE
A charge (usually monthly) by a Strata Corporation to cover the costs of maintenance,
repair, cleaning etc. of common areas. This fee will usually include a reserve to cover
major repairs such as reroofing and heating system replacement
TAX HOLD BACK
When your property taxes are included with your mortgage payments, your lender will
withhold funds from your disbursement to cover interim or final taxes payable to the
municipality. The amount depends on the month that the mortgage was funded and the
dates when interim and final taxes are due. Tax hold backs are used to pay for the current
year's taxes while your monthly tax installments are accumulated i