Gale Date (for Mortgages)
The date on which interest is charged or compounded on the loan.
The legal attachment of a debtor’s wages, cash flow or assets by creditors. The party served with notice must comply with the Garnishee Order and forward funds to the creditor(s) named.
For genuine consent, both parties must have a clear understanding of the details of the contract in question. Lack of genuine consent can void an agreement.
A proof of ownership that is free of any legal holds or claims.
The technical term used in deeds of conveyance to indicate a transfer of an interest or estate in land.
The party to whom an interest in real property is conveyed (the buyer).
The person who conveys an interest in real estate by deed (the seller).
The total floor area of a building, measured from the outside of the exterior walls.
Gross Debt Service Ratio (GDS)
The percentage of the borrower’s income that is needed to make all payments for costs associated with housing. There is a maximum amount associated with this ratio to ensure that borrowers can afford to carry the debt.
Gross Income (Single Family)
The total annual personal income before deductions used in the calculation of an applicant’s debt service ratios.
Gross Leasable Area
The total floor area designed for tenant occupancy and exclusive use and that area on which tenants pay rent. This does not include common areas.
Gross Profit (Income Statement)
Total revenue of a business minus the cost of goods it sold.
The contract for the rental of land, usually for a long term.
A type of insurance plan in which premiums are set for a large group as a whole, as opposed to individual premiums set on personal characteristics. All mortgage creditor insurance plans are group insurance plans.
One who promises to pay a debt or perform an obligation contracted by another in the event the original borrower fails to pay or to perform as contracted.
A mortgage is considered high ratio when the loan-to-value is 80% or more. This occurs when the borrower’s down payment is 20% or less of the property value.
Highest and Best Use
This is the most probable, legally allowable, financially feasible use for the property in question. The appraiser includes an opinion on this as part of the appraisal report.
The withholding of or non-advancement of a portion of a mortgage loan to maintain adequate security,
Home Equity Financing
A type of mortgage refinancing in which the mortgage amount is increased to take advantage of the increased equity in a home.
Looks at how individuals group together to create a household. A household can be made up of an individual, a couple, or either one of these with children. Generally mirrors growth, aging, and divorce/separation patterns of the general population.
A mortgage that allows two or more types of mortgage products to be combined in one mortgage registration. E.g.: a mortgage registered for $200,000.00 with $100,000.00 as a fixed rate, $50,000.00 as a line of credit and an additional line of credit for $50,000.00.
The appropriate civil law term that corresponds to the common law concept of ‘mortgage’.
Investment, commercial, and industrial properties.
A contract that requires criminal acts and is thus void. The parties involved have no standing in court.
In law, an illiterate refers to an individual who cannot read or speak English. Illiterate individuals are bound to an agreement if they understand its nature. However, if it is fraudulently interpreted by another party, then the contract is void. See foreigner.
To enter and settle in a country or area in which one is not native.
The term used for real property (as opposed to personal property) in civil law.
Refers to the inability of people to make or engage in certain binding dispositions of their rights, such as entering into contracts.
Real property that is used, or is capable of being used, for the production of annual income through leasing of the property.
Summarizes the findings of calculations between a company’s revenues and expenses. The income statement can be reported annually, quarterly or monthly. The income statement is generally broken down as follows:
A form of business ownership in which the business is set up as a separate legal entity under the laws of the jurisdiction it operates in (provincial and/or federal). When an incorporated company is a party to a contract it is important to determine if the company exists, and if it has the capacity to become a party to the contract.
That which cannot be forfeited or done away with.
Independent Mortgage Brokers Association of Ontario (IMBA)
A volunteer-based organization serving independent mortgage professionals in Ontario.
Property that contains units that are designed for manufacturing, production and warehousing.
A person younger than the age of majority (varies among provinces and territories).
A general increase in the price level of goods and services.
Going in; the right of entrance.
An order of a court of equity prohibiting an act or compelling an act to be done.
Categorized as a form of Incapacity which means that such individuals cannot engage in contractual agreements. If insanity occurs after entering a binding agreement, contracts can be cancelled or, if sanity is regained, a reasonable time is allowed to rescind a contract.
A formal written legal document.
An interest of such a nature that the occurrence of the event insured against would cause financial loss to the insured. Such interests, for example, may be that of an owner, a lender, a lessee or a trustee.
The term is used conventionally to designate the amount of insurance that may be carried on destructible portions of a property to indemnify the owner in the event of a loss.
Non-physical goods that have value to a business. Most common forms are business goodwill or legal rights to market a product.
An amount, expressed as a percentage, which a borrower agrees to pay on borrowed money, at a certain frequency as per an agreement with the lender.
Interest Accruing Loan
In this type of loan, no payments on interest or the principal are paid until the end of the term. Only when the mortgage contract has expired are the payments due.
The process of calculating compound interest payable on the amount borrowed between the day the loan is disbursed and the day the amortization period starts.
Interest Adjustment Date
The date from which interest is calculated at the rate and compounded at the frequency set out in the mortgage contract. It is normally the first day of the month following the closing of the mortgage transaction.
The decimal equivalent for an interest rate on a unit amount for a certain period of time, calculated as the interest rate divided by the number of days in a year, times the number of days accrued.
Interest Only Loan
A loan in which the borrower only pays regularly scheduled payments on the interest to the lender and the principal remains the same during the life of the loan. The principal is repaid in full at the end of the loan’s term.
Interests Less than Estates, or Interests Less than Full Ownership
These describe the situation when a fee simple owner divides ownership according to the kind of use permitted or restricted upon the land.
Interest Plus Specified Principal Loan
Also known as a straight-line principal reduction loan. In this type of loan, an equal amount of principal is repaid at every interest compounding period in addition to the interest that must be paid for that period.
The interest rate is the percentage charged on outstanding loan balances.
All joint tenants must have the same interest (extent, nature, duration) in the land.
Interim Financing (Construction Financing)
Interim loans are used to provide construction financing until the permanent loan can be funded.
Internal Rate of Return
That rate at which the present worth of all present and future investment costs equals the present worth of all present and future investment benefits.
see Insanity. This is another form of incapacity in contract law.
A property which is rented out to individuals who do not own the property, and pay rent to the owner of that property. The opposite of an owner occupied property.
Invitation to treat
It is an action by one party inviting others to make an offer. It is not a contract. An invitation to treat may be seen as a request for expressions of interest.
An ownership of property by two or more people, each of whom has an undivided interest subject to the right of survivorship.
An arrangement under which two or more people or businesses go into a single venture as partners.
The official and authentic decision of a court of justices upon the respective rights and claims of the parties to an action or suit being litigated and submitted to its determination.
A legal remedy available to a lender when a mortgage is in default. With this remedy, any excess money from the sale of the property over and above the mortgage debt is distributed to the borrower.
A mortgage that is subsequent to the claims of the holder of a prior (senior) mortgage.
Problems associated with the title that are known before the policy is taken out.
Includes not only the ground or soil, but also everything that is attached to the earth, whether by course of nature, such as trees and herbage, or by the hand of man, such as houses and other buildings. It includes not only the surface of the earth but everything under it and over it. Condominium Acts divide land horizontally thereby limiting the vertical ownership.
Land Titles System
This is a system of land registration under which the registrar, or master of titles, passes on the validity of the mortgage instrument, determines its legal effect, and the Government guarantees a title.
Municipal level regulations that restrict and regulate the types of buildings and uses allowed on a property.
An additional charge a borrower is required to pay as a penalty for failure to pay a regular instalment when due.
Present or potential imperfections or blemishes that are not readily evident.
Lawyer’s Report (or Opinion) on Title
The Lawyer’s Report outlines the mortgage details, including the results of the title search, tax details, fire insurance and any other related insurance coverage details, verification that title insurance has been obtained (if applicable), and any other relevant facts (i.e. easements, restrictions, liens).
Lead Lender (Mortgages)
A financial institution that heads up a financial consortium or syndicate of two or more lenders to provide funds for a mortgage.
A contract between a landlord (lessor) and tenant (lessee) for the occupation or use of the landlord’s interest in a property by the tenant for a specified period of time and for a specified consideration (rent).
Lease Guarantee Insurance
Insurance that protects the owner of leased commercial and industrial real estate from loss of rental income through the failure of a tenant to make rental payments.
An estate or interest in an estate in real property held by virtue of a lease for a term of years. A leasehold is considered personal property.
A mortgage provided by lessees on the security of their leasehold interests in the land.
The written geographical description of a property (metes and bounds) as described in the land register.
This means that for an individual to be bound by a contract, that person has intended to create a commitment.
The property value for mortgage purposes. Usually, the lesser of appraised value or sale price.
Letter of Instruction
A letter of instruction will call for the lawyer to act for the lender and administer the distribution of the mortgage loan.
A business’ or a borrower’s debts and legal obligations.
A claim on real or personal property for the payment of some undischarged debt or duty.
Life Estate or Interest
An interest in land that gives exclusive possession of the land for a lifetime only.
A type of appraisal that provides only an exterior inspection for transactions that are somewhat riskier than standard, e.g., in a new or unknown market, or in mixed use neighbourhoods but not high risk. Also known as a drive-by appraisal.
The readiness or ease with which an asset can be converted to cash.
The listing agreement is a contract between a seller and a real estate agent or broker. It sets out the conditions of the listing. A listing agreement generally includes, but is not limited to, the following: the length of the listing period, the desired sales price and the amount of the commission.
Loan Companies Act
A federal act regulating loan companies.
Also known as qualifying the borrower. Loan qualification is the process of analyzing the buyer’s eligibility for financing.
Loan-to-Value Ratio (LTV)
The amount of the mortgage loan compared to the value of the property. This ratio is calculated by the lender prior to providing the loan. The results of this calculation help to determine whether or not the applicant will qualify for a loan and whether the application, if approved, will be for a conventional loan or a high ratio loan.
Long Term Investments
These investments are similar to fixed assets but typically do not depreciate in value.
Long Term Liabilities
Debts and obligations that must be repaid over a long period of time, e.g. mortgages.
Lump Sum Payment Option
A clause that may be included in an open mortgage allowing the borrower to prepay a portion of the principal if desired and in accordance with the specific terms of the contract.