AGREEMENT for SALE
An agreement for the purchase of real property wherein the purchase price is paid in installments and title is not conveyed to the purchaser until the purchase price is paid in full.
AGREEMENT OF PURCHASE AND SALE
A written document in which the purchaser agrees to buy certain real estate and the seller agrees to sell under stated terms and conditions.
AMORTIZATION
Repayment of a mortgage in equal installments, usually monthly, of principal and interest, rather than interest-only payments.
ASSUMABILITY
Allows the buyer to take over the seller's mortgage on the property.
ASSUMPTION OF MORTGAGE
A buyer's agreement to assume the liability under an existing note that is secured by a mortgage or deed of trust. The lender must approve the buyer in order to release the original borrower (usually the seller) from liability.
AUTHORITY
The legal power or right given by a principal and accepted by the agent to act on the principal's behalf in business transactions with a third party.
BALANCE DUE ON COMPLETION
The amount of money the purchaser will be required to pay to the vendor to complete the purchase, after all adjustments have been made.
BALLOON PAYMENT
A lump sum principal payment due at the end of some mortgages or other long-term loan.
BREACH OF CONTRACT
Failure to fulfill an obligation under a contract. Breach confers a right of action on the offended party.
CAP
The limit on how much an interest rate or monthly payment can change, either at each adjustment or over the life of the mortgage.
CAVEAT EMPTOR
"Let the buyer beware." The buyer must examine the goods or property he/she is buying and he/she, therefore, buys at his/her own risk.
CHARGE
The name given to a mortgage document when title is registered under the Land Titles Act.
CLOSED MORTGAGE
A mortgage that locks you into a specific payment schedule. A penalty usually applies if you repay the loan in full before the end of the closed term.
CLOSING DATE
The date on which the sale of a property becomes final.
COMMON LAW
That part of the law formulated, developed and administered by the old common law courts, based originally on common customs and mostly unwritten.
COMPENSATION
Payment or reward for performance of service.
COMPOUND INTEREST
Interest on both the original principal and on interest accrued.
CONDITION PRECEDENT
A condition in a contract which calls for the happening of some event, or performance of some act, before the agreement can become binding on the parties.
CONDITION SUBSEQUENT
A condition referring to a future event upon the happening of which the contract becomes no longer binding on the parties.
CONDOMINIUM/STRATA
A form of real estate ownership where the owner receives title to a particular unit and has a proportionate interest in certain common areas. The unit itself is generally a separately owned space whose interior surfaces (walls, floors, ceilings) serve as its boundaries.
CONSIDERATION
Something of value given by a promisee to a promisor to make the promise binding.
CONTINGENCY
A condition that must be satisfied before a contract is binding. For instance, an agreement for purchase and sale may be contingent upon the buyer obtaining financing.
CONTRACT
A contract is a legally binding agreement between two or more capable persons for consideration or value, to do or not to do some lawful and genuinely intended act. If affecting real estate it must be in writing.
CONVENTIONAL MORTGAGE
A first mortgage outside the conditions of the National Housing Act granted by an institutional lender such as a bank, mortgage, loan, or trust company wherein the amount of the loan does not exceed 75% of the approved lending value of the property.
CONVEYANCE
The transfer of an interest in property from one person to another.
COVENANT
An agreement contained in a deed and creating an obligation. It may be positive, stipulating the performance of some act. It may be negative or restictive, forbidding the commission of some act.
CREDITOR
A person to whom a debt is owed by another person termed the debtor.
DEED
An instrument in writing, duly executed and delivered, that conveys title or an interest in real property.
DEED RESTRICTION
An imposed restriction in a deed for the purpose of limiting the use of the land.
DEFAULT
Failure to fulfill an obligation.
DEPOSIT
The portion of the sown payment delivered to the vendor by the purchaser with a written offer as evidence of good faith. Also known as earnest money.
DESCRIPTION
A legal identification of land or premises.
DISCHARGE
To repay a mortgage in full.
DOMINANT TENEMENT
The estate (i.e. property) which derives benefit from an easement over a servient tenement, as in a Right-of-way.
DOWN PAYMENT
The buyer's cash payment towards the property. The difference between the purchase price and the amount of the mortgage loan.
EXPRESS AUTHORITY
Authority delegated by the principal which clearly sets forth in exact, plain, direct and well-defined limits those acts and duties which the agent is empowered to perform on behalf of the principal, e.g. an exclusive listing.
EXPROPRIATION
Taking of private property by the state for public use, with fair compensation to the owner, through the exercise of the right of eminent domain.
GRANT
A technical term used in deeds of conveyance to indicate a transfer of an interest or estate in land.
GRANTEE
The party to whom an interest in real property is conveyed.
GRANTOR
The party who conveys an interest in real property by deed.
GROSS DEBT SERVICE (GDS) RATIO
The gross annual income required to cover payments associated with housing (mortgage principal and interest, taxes, secondary financing, heating, and 50% of condominium fees, if applicable). Expressed as a percentage.
HIGH RATIO MORTGAGE
A mortgage loan that exceeds the normal limit of a conventional first mortgage, in regard to the ratio of the loan amount to the property's lending value; the higher loan is made possible by a mortgage insurance plan.
HOME WARRANTY PLAN
Protection against failure of mechanical systems within the property. Usually includes plumbing, heating systems, and installed appliances..
INDENTURE
A document or deed, usually in duplicate, expressing certain objects between the parties.
INJUNCTION
A judicial process or order requiring the person to whom it is directed to do, or refrain from doing, a particular thing.
INSTRUMENT
A form of written legal document.
INTEREST
The percentage which is charged for the use of borrowed money.
INTESTATE
A person who dies without a will, or leaves one which is defective in form, in which case his estate descends by operation of law to his heirs or next of kin.
IRREVOCABLE
Incapable of being recalled or revoked; unchangeable, unalterable.
JOINT TENANCY
An equal, undivided ownership of property by two or more persons. Upon the death of any owner, the survivors take the decedent's interest in the property.
JUDGEMENT
The decision of the Court.
LEGAL DESCRIPTION
A written description by which property can be located, definitely.
MILL
One-tenth of one cent, a measure used to indicate the property tax rate, e.g. a tax rate of one mill per dollar is the same as 0.10 per cent of the assessed value.
MORTGAGE
A conveyance of property to a creditor as security for payment of a debt with a right of redemption upon payment of the debt.
MORTGAGEE
The one to whom property is conveyed as security for the payment of a debt; the lender or creditor.
MORTGAGOR
The one who makes the mortgage; the borrower or debtor.
MORTGAGE COMMITMENT
A formal indication, by a lending institution that it will grant a mortgage loan on property, in a certain specified amount and on certain specified terms
MORTGAGE INSURANCE
Applies to high-ratio mortgages. It protects the lender against loss if the borrower is unable to repay the mortgage.
MORTGAGE LIFE INSURANCE
Pays off the mortgage if the borrower dies.
NOTICE DOR
Notice filed in court by mortgagor under foreclosure proceedings that he desires an opportunity to redeem.
OFFER AND ACCEPTANCE
The basic requisite of any contract is a proposal by one party, called the offeror, to another party, called the offeree, to accept the basic terms of the Agreement. If the offeree indicates assent to the proposal, there is an acceptance and the contract will bind both parties to its terms.
OPEN LISTING
A listing given to any number of brokerages without liability to compensate any except the one who first acquires a buyer ready, willing and able to meet the terms of the listing, or secures the acceptance by the seller of a satisfactory offer; the sale of the property automatically terminates the listing.
OPEN MORTGAGE
Allows partial or full payment of the principal at any time, without penalty.
OPTION
A right given by the owner of property to another (for valuable consideration) to buy certain property within a limited time at an agreed price.
PORTABILITY
A mortgage option that enables borrowers to take their current mortgage with them to another property, without penalty.
POWER OF ATTORNEY
Delegated written authority to a person to legally act on behalf of another.
POWER OF SALE
The right of a mortgagee to force sale of the property without judicial proceedings should default occur.
PRE-APPROVED MORTGAGE
Qualifies you for a mortgage before you start shopping. You know exactly how much you can spend and are free to make a 'firm' offer when you find the right home.
PREPAYMENT CLAUSE
A clause inserted in a mortgage, which gives the mortgagor the privilege of paying the mortgage debt in advance of the maturity date, on stipulated terms.
PRE-PAYMENT PRIVILEDGES
Voluntary payments in addition to regular mortgage payments.
PRINCIPAL
The employer of an agent or brokerage, who gives the agent the authority to do some act for him/her.
PRINCIPAL AMOUNT
In mortgage law, this term refers to the debt itself, as distinguished from interest. This is the amount borrowed or still owing on a mortgage loan. Interest is paid on the principal amount.
PROSPECT
A potential buyer or customer.
QUIT CLAIM DEED
A general release of all claims or rights to a parcel of land.
REFINANCING
Paying off the existing mortgage and arranging a new one or re-negotiating the terms and conditions of an existing mortgage.
RENEWAL
Re-negotiation of a mortgage loan at the end of a term for a new term.
STATUTE
A law established by an act of the legislature.
TERM
In a mortgage "term" is the actual length of time for which the money is loaned and for which the interest rate is fixed.
TERM MORTGAGE
A non-amortizing mortgage under which the principal is paid in its entirety upon the maturity date.
TIME IS OF THE ESSENCE
Requires punctual performance of a contract on closing date and is indicated by so stating as in an Agreement of Purchase and Sale.
TITLE
The means of evidence by which the owner of land has lawful ownership thereof.
TRANSFER
To convey from one person to another.
TRUST ACCOUNT
An account separate and apart from one's personal monies, as required by law in the case of a brokerage.
VARIABLE RATE MORTGAGE
A mortgage with fixed payments, but fluctuating interest rates. The changing interest rate determines how much of the payment goes towards the principal.
VENDOR
A seller of real property.
VENDOR TAKE-BACK MORTGAGE
When the seller provides some or all of the mortgage financing in order to sell their property
VOID
Of no legal effect. A nullity.
ZONING BY-LAW
A by-law passed by a municipality and approved by the Ontario Municipal Board, prohibiting the use of land in certain areas for any purpose other than as set out in the by-law. In the Planning Act, it is called a Restricted Area By-law.
|