Acerca de

Pre-Approval - a mortgage application that has been reviewed and completed in advance, with a thorough review of all important income documentation, down payment, and credit history.

 

Conditional Approval - a mortgage application that has been reviewed by a mortgage lender and is subject to one or more conditions being completed such as an appraisal or receipt of additional documentation.

 

Firm Approval - a conditional approval where all outstanding conditions have been accepted by the mortgage lender.

 

Conditions - specific and additional information or documentation required by the mortgage lender.

 

Stress Test - a financial calculation defined by federal mortgage rules that determines the applicants’ ability to service a mortgage. Generally, the calculation is the proposed mortgage payment + property taxes + strata fee + heat + any additional fixed monthly debt payments divided by total income.

 

Land Transfer Tax - or Property Transfer Tax in British Columbia is a tax levied on the purchase of property, in some cases, such as a transfer of Title from one person to another. The general calculation rule is 1% x first $200,000 and 2% of the balance.

 

Closing Costs - the additional expenses incurred by the borrower including: land transfer tax, PST, appraisal fee, home inspection, legal fees, title search, and title insurance. A lender’s standard practice is to confirm from the borrower 1.5% x purchase price.

 

Insured Mortgage - a qualified mortgage with less than 20% downpayment. This mortgage is approved by one of three national insurers e.g. CMHC 

 

Unisurable Mortgage - a qualified mortgage with a minimum of 20% equity or downpayment and an amortization of 30 years.

​

Insurable Mortgage - a qualified mortgage with a minimum of 20% equity or downpayment and an amortization of 25 years or less.

 

Amortization - the total number of years, up to 30 years,  used to calculate a mortgage payment.

 

Mortgage Term - the length of time in months and years that a mortgage payment is calculated. Popular terms range from 1 - 5 years.

 

Payment Frequency - the time between two consecutive payment dates.

 

Accelerated Payment - a voluntary privilege allowing the borrower to make a mortgage payment more frequently than monthly. The most common are weekly, bi-weekly. 

 

Annual Principal Pre-Payment - a voluntary privilege allowing the borrower to pay a set amount directly against the principal mortgage owing. Most lenders allow 10% or 15% of the original borrowing each calendar year.

 

Double Up Payment Option - a voluntary privilege allowing the borrower to apply an amount up to 100% of the minimum mortgage payment directly to the principal balance outstanding.