Amortization

• The total length of time the borrower has to repay the loan

Appraisal

• An estimation of the current market value of a home.

Down Payment

• The amount of equity put down towards the purchase of a home at the outset of the process.

Loan to Value (L.T.V)

• The amount of the money loaned against a property compared to the value of the property – for example if the property is worth $500,000 and the Down Payment is $50,000 then the L.T.V. would be 90%.

High Ratio vs Conventional

• A High Ratio Mortgage is any mortgage that has a Loan to Value of 80% or higher

• A Conventional Mortgage is anything with a Loan to Value of anything less than 80%

Closed Mortgage

• A mortgage that must remain unchanged for the term of the loan – note, term is different from the Amortization period

Closing Costs

• Costs you need to have available in addition to the purchase price of your home

Equity

• The different between the appraised value, and the remaining mortgage amount on your property

Mortgage Default Insurance

• The Insurance required to ward against defaulting on your mortgage – only needed for High Ratio Mortgages – 80% LTV or higher.

Title Insurance

• Insurance against losses or charges that could occur as a result of issues with the title of the property.