Ottawa Flat Fee Realty - Real Estate Terminology

Flat Fee Realty, Ottawa

Agreement of Purchase and Sale - a contract by which one party agrees to sell and another agrees to purchase - the offer may be firm (no conditions attached) or conditional (certain conditions must be fulfilled before the deal can be closed).

Amortization period - The time over which equal payments would totally pay off the mortgage. This is normally 25 years for a new mortgage.

Appraised value - an estimate of the market value of the property.

Assessed value - a valuation placed on a property as a basis for municipal taxation.

Assuming a mortgage - When the purchaser accepts responsibility for repayment of a mortgage already on the house being bought.

Closing Adjustments - necessary adjustments made between the purchaser and the vendor for property taxes, insurance and heating fuel already paid by the vendor, as determined by the lawyers.

Closing date - the date, specified in the agreement of purchase and sale, on which the sale of a property becomes final and the new owner takes possession - the purchaser delivers the balance of the money due and the vendor delivers a duly executed deed and vacant possession of the property (unless otherwise agreed).

CMHC - Canada Mortgage and Housing Corporation. CMHC administers the National Housing Act of Canada and also provides default insurance on mortgages where the down payment is less than 25%.

Condominium Fee - a common fee paid by all owners which is allocated to pay the common expenses of a condominium property.

Conventional Mortgage - a mortgage that does not exceed 75% of the purchase price of a home.

Deposit - payment of money as a pledge to fulfill a contract.

Down Payment - A percentage of the home purchase price that the purchaser pays in cash instead of borrowed money.

High Ratio Mortgage - a mortgage that exceed 75% of the purchase price of a home and therefore must be insured against default.

Home equity - the difference between the price for which a home could be sold (market value) and the total debts registered against it.

Interim financing - short-term financing to help a buyer bridge the gap between the closing date on the purchase of a new home and the closing date on the sale of the current home.

Interest adjustment - the amount of interest due between the date your transaction closes and the date your first mortgage payment is calculated from

Listing - an agreement between a property owner and a real estate broker to offer the owner's property for sale or lease.

Mortgage term - the number of years or months over which you pay a specific interest rate. Terms usually range from six months to 10 years.

Mortgagee - the lender

Mortgagor - the borrower

Multiple Listing Service (MLS^®)- an arrangement among brokers who are real estate board members, whereby each broker shares information regarding his listings with the other members, who may negotiate the transaction.

P.I.T. - principal, interest and taxes. Together, these make up the regular payment on a mortgage if you elect to include property taxed in your mortgage payment.

Principal - the amount of money borrowed for a new mortgage or now owing on an existing one.

Title - legal ownership of a property.

The above information is believed to be accurate but is not warranted.

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