Mortgage Basics
The person who borrows money from a lender to purchase property
What is a mortgagor?
the length of time that the borrower and the lender are bound by the mortgage contract.
What is the term?
The net value of property after the value of the encumbrances is deducted.
What is equity?
a clause that permits the mortgagee/chargee to demand immediate payment of the full amount of the loan
What is an acceleration clause?
a personal promise to pay
What is a covenant?
The legal document that secures a loan against real property
What is a mortgage?
the length of time it takes to repay a loan in full if the schedule of monthly payments in the mortgage is followed.
A mortgage when the owner or purchaser of real property arranges to borrow money.
What is a new (arranged) mortgage?
the 35 day period, after the mortgagor is in default, during which the mortgagor has the chance to put the mortgage back in good standing and then redeem the property and the mortgagee cannot take any steps to take the property.
What is the redemption period.
the percent of interest on an annual basis, that the mortgagee charges the mortgagor on the principal amount of money borrowed under a loan.
What is the interest rate?
The two main types of mortgage rates in Ontario.
What are fixed-rate and variable-rate mortgages?
the final payment for the amouint of principal that remains unpaid at the end of the term of the mortgage.
What is a balloon payment?
taking over an existing mortgage.
What is assuming a mortgage?
the amount of money left over after paying the mortgage (and costs) following a sale under the power of sale.
What is surplus?
make all mortgage payments, in full and on time, maintain fire insurance on the mortgaged property, pay all realty taxess, and keep the mortgaged property in good condition so that the value does not go down
What are the obligations of the mortgagor?
the interest reate charged by banks to their largest, most secure and most creditworthy customers on short-term loans.
What is prime lending rate.
a mortgage that permits repayment of the loan before the expiry of the term
an amount that a borrower may have to pay when ending a mortgage contract earlier than the due date.
What is prepayment penalty
The power to exercise the remedy of sale in case of default under a mortgage.
What is power of sale?
Time and date of registration determine this.
What is mortgage priority?
A bank, trust company, a credit union, or an insurance company that is the business of lending money.
What is an institutional lender.
A closed mortgage with some repayment provisions.
what is a partially open mortgage?
a charge created when the seller agrees to lend the buyer money toward the purchase price of the property, and the buyer gives the seller a charge on the property as security for the loan.
What is a vendor take-back mortgage?
a court action whereby the mortgagee obtains legal title to the property after default by the mortgagor
What is foreclosure?
The sale of charged property ordered and administered by the court.
What is a judicial sale?