Mortgage 1-4

  1. B type lending is?
    Lending to Borrower who have impaired credit or some other impairment that prevents them from qualifying for traditional lending products.
  2. 1st mortgage is?
    a mortgage that is registered on title first in regards to timing with no impact in regards to size etc.
  3. Accelerated mortgage payment is?
    A payment larger than required to reitre the mortgage over the contracted amortization, having the effect of repaying the mortgage sooner and saving interest.
  4. Amortization
    total amount of time contracted to repay a mortgage
  5. AMP Designation?
    Accredited Mortgage Professional designation awared by CAAMP
  6. Assignment of Mortgage?
    Transferring mortgage from one lender to another.
  7. Assumability option?
    Allows a purchaser to take over the current homeowner's mortgage.
  8. Balloon Payment?
    amount repayable at the end of the term
  9. Basis point?
    1/100th of one percent
  10. Blended Payment?
    Payment that includes a combination of principal and interest
  11. Bundled/Combination Option?
    combines a mortgage and a line of credit
  12. Cash Back Option
    Percentage of the mortgage loan is paid to the borrower by the lender
  13. Charge
    legal document outlining the terms of the mortgage, Charge/Mortgage is the document indicating debt registered against the title
  14. Closed Mortgage?
    No option to repay the outstanding principal blance unless the property is sold to an arm's length purchaser
  15. Conventional Mortgage?
    Not exceeding 80% loan to value
  16. Discharge of Charge/Mortgage
    Document indicating debt has been removed from a title of a property
  17. Equity Take Out (ETO)?
    Removal of equity by refinancing of the property
  18. Standard Charge Term?
    Terms and conditions of the mortgage contract including remedies available to the lender upon default by the borrower.
  19. Income Approach?
    process where an appraiser will use a commercial property's income to determine its value.
  20. Banks: Schedule I, II and III?
    I - Canadian Owned. II - subsidiaries of foreign owned banks. III - foreign owned banks
  21. Expropriate?
    Act of public authority taking property without consent of an owner through a statutory/common law process.
  22. Foreclosure?
    Remedy for Lender to obtain title to defaulted Borrower's property and dispose of it. Any profit/loss belongs to Lender while borrower is debt free.
  23. Institutional Lender?
    Bank, loan/trust company, credit union or caisses populaires
  24. Institutional Mortgage Originaror?
    individual employed by institutional Lender to provide suitable borrower to that institution for mortgage financing
  25. Mortgage Default insurers?
    inter that provides policy to lender to compensate for losses occured in mortgage transaction. CMHC, Genworth Financial and AIG.
  26. Securitization?
    Selling of a pool of mortgages to a third party
  27. A mortgage that can be repaid at any time with a 3 month interst penalty or the interest rate differential is?
    A partially open mortgage
  28. Combined or bundled option?
    STEP Mortgage, standard mortgage along with type of debt such as a line of credit. Every paymen on the mortgage would increas the amount availabe on the line of credit.
  29. Portability?
    Take mortgage with you to a new home. If default insured and moved within 2 years then you do not have to pay premium for second time for either full amount or top-up portion of mortgage. (Rate protection, limited application)
  30. Partially Amortized, blended constant payment mortgage - fixed rate is:
    • Partially amortized - indicated that there is a term involved, if no term it would be fully amortized (which is uncommon)
    • Blended Payment - combination of principal and interest
    • Constant - payment does not change throughout term
  31. Partially amortized, blended variable payment mortgage - variable rate?
    • Partially amortized - term involved
    • blended - combination of principal and interest
    • variable payment - payment fluctuates
  32. Reverse Mortgage?
    Interest accuring mortgage typically for seniors. Receive up to 40% of the property value in a lump sum of cash.
  33. Straight Line Principal Reduction?
    pay off a set amount of principal each payment along with accrued interest. (Not common in Canada). High initial payment size.
  34. Does mortgage creditor insurance typically increase or decrease?
    Decreases with the balance of the mortgage.
  35. Power of sale is?
    Process the lender uses against borrower without using the courts to sell the property.
  36. What is an encumbrance?
    An interest in property that has the effect of limiting the rights of fee simple ownership of real property. Examples: mortgages, easements, and restrive covenants
  37. What is an easement?
    Rights acquired for the benefit of real property, granting rights to use another property. Land giving the right is called the servient, receiving the right is the dominant tenement.
  38. What are restrictive covenants?
    Restriction of use placed on title of the servient tenement for the benefit of the dominant tenement. Example restriction on building height.
  39. What is a building scheme?
    Group of restrictive covenants registered against several properties in a development plan. IE. Sub-division rules.
  40. What is tenancy in common?
    A type of co-ownership of real property used by parties who wish to own individual shares in a property.
  41. What is a fee simple estate?
    Fee being that the estate may be inherited, simple being that there are no prohibitions against who may inherit it. With no heirs the interest is terminated and the property is returned to the crown.
  42. What is Joint Tenancy?
    Type of co-ownership of real property where all owners own an undivided interest in the property. Ie. spouses.
  43. What is a lien?
    Security against a property, either real or personal, for a debt.
Card Set
Mortgage 1-4
Ontario Mortgage guide