A mortgage with an interest rate that may change periodically, usually in relation to an index, affecting the monthly payment.
Amortization:
The gradual reduction of a debt over a set period through scheduled payments of principal and interest.
Appraisal:
An evaluation of a property's value by a licensed appraiser.
Approved Lender:
A financial institution authorized to provide loans for specific programs.
Assessed Value:
The value placed on a property by a public tax assessor for taxation purposes.
Cash Offer:
A home purchase in which the buyer pays the full purchase price in cash.
Close of Escrow:
The final step in a real estate transaction when all the documents are signed, and the transfer of property is completed.
Closing:
The finalization of a real estate transaction, where ownership is transferred from the seller to the buyer.
Closing Costs:
Fees associated with the purchase of a property that are paid at the closing table.
CMHC (Canada Mortgage and Housing Corporation):
A Canadian government agency providing mortgage insurance to lenders.
CMHC Insurance:
Mortgage insurance required for high-ratio mortgages in Canada, protecting lenders in case of borrower default.
Comparative Market Analysis (CMA):
An evaluation of comparable properties used to determine a property's likely market value.
Conditional Offer:
A purchase offer with specific conditions that must be met for the sale to proceed.
Contingencies:
Conditions that must be met for a real estate contract to be binding.
Contingent Offer:
An offer to buy a home that depends on the buyer selling their current home.
Counteroffer:
A response to an initial offer, changing some terms or conditions.
Curb Appeal:
The attractiveness of a property when viewed from the street.
Down Payment:
The initial payment made when purchasing a home, paid upfront and not financed.
Dual Agency:
When a real estate agent represents both the buyer and the seller in the same transaction.
Earnest Money:
A deposit made by the buyer to show their sincerity in purchasing a property.
Equity:
The difference between the market value of a property and the outstanding mortgage balance.
Escrow:
A third party holding funds or documents until the completion of a transaction.
FHA Mortgage:
A mortgage insured by the Federal Housing Administration, often requiring a lower down payment.
Fixed-Rate Mortgage:
A mortgage with a constant interest rate and monthly payments that remain unchanged for the life of the loan.
Foreclosure:
The legal process by which a lender takes possession of a property when the borrower fails to make mortgage payments.
Good Bones:
A term used to describe a property with a solid structure or potential for improvement.
Gross Debt Service Ratio (GDS):
The percentage of a borrower's income used to cover housing costs.
Homeowners Association (HOA):
An organization that sets and enforces rules for a community and collects fees from homeowners for maintenance.
Listing:
A property advertised for sale.
MLS (Multiple Listing Service):
A database of properties for sale, accessible by real estate agents.
Mortgage:
A loan to finance the purchase of a property, typically with specified repayment terms and interest rates.
Mortgage Broker:
A professional who connects borrowers with lenders and helps secure mortgage loans.
New Home Warranty Program:
A program providing protection for buyers of new homes against construction defects.
Offer to Purchase:
A written proposal by a buyer to purchase a property.
Open House:
A scheduled period during which a house is available for viewing without an appointment.
Pending:
A status indicating that a property is under contract but the sale has not yet closed.
Pending Offer:
An offer that has been accepted by the seller but has not yet closed.
Post-Closing Liquidity:
The availability of funds after a real estate transaction has been completed.
Pre-approval Letter:
A letter from a lender confirming a borrower's ability to qualify for a mortgage.
Pre-Approved:
A buyer who has been conditionally approved for a mortgage.
Pre-Qualified:
A preliminary assessment of a borrower's ability to qualify for a mortgage.
Principal:
The original amount of a loan, not including interest.
Private Mortgage Insurance (PMI):
Insurance required by lenders when a borrower makes a down payment of less than 20%.
Proof of Funds:
Documentation confirming a buyer's ability to pay for a property.
Property Insurance:
Insurance coverage protecting against damage to the property.
Property Taxes:
Taxes levied on the value of a property, used to fund local services.
Purchase Agreement:
A legally binding contract outlining the terms of a home purchase.
Real Estate Agent:
A licensed professional representing buyers or sellers in real estate transactions.
Real Estate Broker:
A licensed professional who can own and operate a real estate brokerage.
Realtor:
A real estate agent or broker who is a member of the National Association of Realtors.
Refinancing:
The process of obtaining a new mortgage to replace an existing one.
Reverse Mortgage:
A loan allowing homeowners to convert part of their home equity into cash.
Selling/Buyer’s Agent or Listing/Seller’s Agent:
An agent representing either the buyer or seller in a real estate transaction.
Title:
Legal ownership of a property.
Title Insurance:
Insurance protecting against financial loss due to defects in the title.
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