AMORTIZATION PERIOD: The actual number of years it will take to pay back your mortgage loan.

ANNIVERSARY: Many mortgage products allow you to make payments against the principal on the anniversary of the mortgage.

APPRAISAL: The process of determining the lending value of a property. Remember that the lending value does not take into consideration the current market, which could shoot your home's price into the stratosphere if the timing is right, or cause it to plunge if you try to sell in a buyer's market.

APPRECIATION: An increase of a property's value due changes in market conditions or other reasons.

CLOSING COSTS: Expenses in addition to the purchase price of a property and that are payable on the closing date. Examples include legal fees, land transfer taxes and disbursements.

CLOSING DATE: The date on which the sale of a property becomes final and the buyer takes possession.

CMHC: Canada Mortgage and Housing Corporation, a Crown corporation that administers the National Housing Act for the Federal Government and encourages the improvement of housing and living conditions for Canadians. CMHC is one of two sources for high-ratio mortgage insurance.

CONDITIONAL OFFER: An offer subject to conditions such as loan approval and/or home inspection.

CONDOMINIUM FEE: A fee paid by the condo owner that is allocated to pay building expenses.

DEED: A legal document, signed by both parties, that transfers ownership.

DOWN PAYMENT: The buyer's cash payment toward the property; the difference between the purchase price and the mortgage loan.

EASEMENT:  The right to use another's property for a specific purpose (e.g. shared driveway)

EQUITY: The difference between your home's value and the money you owe against it.

ESCROW: Funds that are set aside and held in trust, usually for payment of taxes and insurance on real property.

HOME INSURANCE: Insurance to cover both your home and it's contents in the event of fire, theft, vandalism etc (also referred to as property insurance). This is different from Mortgage Life Insurance, which pays the outstanding balance of your mortgage in full if you die.

HOT MARKET: A market where housing sales are up and the sale price is likely to be significantly higher then the asking (listing) price.

INSPECTION: The process of having a qualified home inspector identify potential strengths and weaknesses in a property so that you may have a good idea of it's functional condition.

LAND TRANSFER TAX: A fee paid to the municipal and/or provincial government for the transferring of a property from seller to buyer.

LEGAL FEES AND DISBURSEMENTS: Some of the legal costs associated with the sale or purchase of a property.

LIEN: A claim for money owed by a property owner to a supplier or contractor.

LISTING AGREEMENT: A legal agreement between the listing broker(age) and the seller that describes the property for sale and states the services to be provided and the terms of payment. A commission is generally paid to the brokerage upon closing.

LISTING PRICE: The price at which the house is listed. Also known as the asking price.

MORTGAGE: A loan that you take out in order to buy a property. The collateral is the property itself.

OFFER TO PURCHASE:  Also referred to as an Agreement of Purchase and Sale is a legally binding agreement between you and the person who owns the house you want to buy. It includes your offering price, what you expect to be included with the house, and the financial conditions of the sale. ( your financing arrangements, the closing date etc. )

PRE APPROVED MORTGAGE: Qualifies you for a mortgage amount before you start shopping (reccomended)

SALES TAXES: Taxes applied to the purchase cost of a property. Some properties are exempt from sales tax and some are not. For instance residential resale properties are usually GST exempt, while new properties require GST, although some may qualify for a rebate.

SERVICE CHARGES: Extra costs incurred when hooking up hydro, gas, phone etc to a new address.

SOFT MARKET: A market where housing sales are down and the sale price is likely to be significantly lower than the asking (listing) price.

SURVEY: A document that shows the boundaries of the property and specifies encroachments, easements and the position of buildings on the property.

TERM:  The period during which the conditions of the mortgage apply and after which must be renegotiated.

TITLE SEARCH:  An examination of municipal records to determine the legal ownership of property. Usually performed by a lawyer and/or title company.

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