Issue link: https://canadawidemedia.uberflip.com/i/879023
Dominion LenDing Centres OUR HOUSE FALL 2017 >> 43 istoCK If you find yourself talking to a banker who is using business jargon, you should feel free to remind them that you are not in the industry and would like the terms explained. Any professional worth their salt will be very happy to explain these terms to you. Dominion Lending Centres mortgage professionals are more than happy to answer your questions. _________________________________________________________________ _________________________________________________________________ amortIzatIon The time it will take to pay off the mortgage on a home. Typically in Canada you start out with 25 years. In Japan it can be 99 years. Payments are spread out equally over the specified period. If they were not, you would have huge payments in the first few years (when the loan amount and the interest on it is large) and very small ones in the last six months of your mortgage term, when you're mostly paying down the principal. ClosEd mortgagE A mortgage where you have agreed to pay the lender for a specified period of time. If you choose to terminate the mortgage, a penalty will have to be paid. ConVEntIonal A mortgage where the buyer has 20% or more for the down payment in cash or equity in their existing home. dEFault Failing to pay your mortgage on time puts your mortgage into default. opEn mortgagE A mortgage that allows you to pay out the balance at any time. pIt Principal, interest and taxes— a calculation representing the amount you can afford to pay monthly on your home. Often heating costs are also included in this calculation (PITH). pull A credit bureau report inquiry, as in, "He pulled my credit before the loan approval." tErm Although mortgages typically are issued with 25-year amortizations, Canadians traditionally take terms of one to five years and then renegotiate. The shorter period is the term. tradE lInEs A credit card or wireless phone account, a loan or mortgage that appears on your credit report. 20/20 A provision to repay 20% of the mortgage balance or increase your payment by 20% without incurring a penalty. dErogs Short for derogatory, refers to late payments on your credit report. doWn Short for down payment. A deposit of 5% minimum is required for a home purchase. FlEx doWn A borrowed down payment program, where the repayment of the loan is included in the debt calculations. ForEClosurE If your mortgage is in default you can make your payments up or the lender will put your home in foreclosure and you will lose possession your home. HIgH-ratIo A mortgage where the buyer has less than 20% of the purchase price for the down payment and needs to pay Canada Mortgage and Housing Corp. fees to insure the mortgage against default. mIC Short for a Mortgage Investment Corporation, a group of investors who will lend you the money for a mortgage if a traditional lender will not due to unusual circumstances.