Mortgage Terms You May Not Know
Every industry has its own language and terms. These words and phrases can be confusing to anyone who is not part of a specific industry’s daily operations, and the mortgage business is no exception.
So, to help you understand the terms, acronyms, and phrases regularly used when purchasing a home, Jennifer Charles Mortgage Agent has created this handy reference guide. Here you’ll find valuable information allowing you to comprehend and communicate your property needs effectively.
High Ratio Mortgage: When you buy a home with less than twenty percent down, the funds get insured through one of the three Canadian insurers. It’s called a High Ratio Mortgage.
Purchase Plus Improvements (PPI): When you buy a new house, and you would like to do some upgrades to it but don’t necessarily have the available funds to do it right away. There is a program that allows you to do the renovations which adds considerable value to your mortgage.
Amortization: The length of time it takes to pay off your home assuming that all variables remain the same during that time
Closing Costs: While purchasing a home, there are costs associated with completing the purchase. Some of the costs include lawyers fee, land transfer tax, title insurance, registration, tax on the insurance premium, and a possible tax rebate to the seller.
Gross Debt Service (GDS) and Total Debt Service (TDS): These are two critical percentages that banks and lenders evaluate when you’re attempting to qualify for a mortgage.
Prepayment Privileges: It’s what the lender allows homebuyers to prepay during the mortgage term without being subject to a penalty. The extra payments can get made with each mortgage payment as well as one lump sum annually. It’s an aggressive way of paying down your mortgage.
We hope these terms made you feel more comfortable with the mortgage process.
If you’re looking for an expert mortgage agent in the Durham region and GTA, reach out to Jennifer Charles Mortgage Agent. With many years of experience in the mortgage sector, I work tirelessly for my clients, and I’m committed to offering honest and professional services.
My services include first-time homebuyer mortgages, mortgage refinance, debt consolidation, home equity line of credit, and renovation loans. I also offer commercial mortgages, mortgage renewals, investment property mortgages, and spousal buyout mortgages.