Calgary Real Estate - Real Estate Vocabulary

Posted by Gagan Bilga on Friday, April 19th, 2013 at 8:09am.

Calgary Real estate Vocabulry

Calgary Real Estate - Vocabulary

Adjustable mortgage interest rate:
 
With an adjustable rate, both the interest rate and the mortgage payment vary, based on market conditions. 
Amortization:
 
Length of time over which the debt will be repaid. 
Appraisal:
 
Process for estimating the market value of a property. 
Appraiser:
 
Certified professional who carries out an appraisal. 
Appreciation:
 
The increase in value of something because it is worth more now than when you bought it. 
Approved Lender:
 
A lending institution authorized by the Government of Canada through CMHC to make loans under the terms of the National Housing Act. Only Approved Lenders can negotiate CMHC insured mortgages. 
Assumption Agreement:
 
A legal document signed by a homebuyer that requires the buyer to assume responsibility for the obligations of a mortgage by the builder or the previous owner. 
Blended Payment:
 
A mortgage payment that includes principal and interest. It is paid regularly during the term of the mortgage. The payment total remains the same, although the principal portion increases over time and the interest portion decreases. 
Builder:
 
A person or company that builds homes. 
Closed mortgage:
 
A closed mortgage cannot be paid off, in whole or in part, before the end of its term. Many closed mortgages limit prepayment options such as increasing your mortgage payment or lump sum prepayment (usually up to 20% of your original principal amount). 
Closing costs:
 
Costs in addition to the purchase price of the home, such as legal fees, transfer fees and disbursements, that are payable on closing day. They range from 1.5% to 4% of a home’s selling price. 
Closing day / Possession Day:
 
Date on which the sale of the property becomes final and the new owner takes possession of the home. 
Commitment Letter (or Mortgage Approval): 
Written notification from the mortgage lender to the borrower that approves the advancement of a specified amount of mortgage funds under specified conditions. 
Conditional offer:
 
An Offer to Purchase that is subject to specified conditions, for example, the arrangement of a mortgage. There is usually a stipulated time limit within which the specified conditions must be met. 
Condominium (or strata):
 
A unit, usually in a highrise or lowrise, or a townhouse that can be owned. You own the unit you live in and share ownership rights for the common space of the building. Common space includes areas such as corridors, the grounds around the building, and facilities such as a swimming pool and recreation rooms. Condominium owners together control the common areas through an owners’ association. The association makes decisions about using and maintaining the common space. 
Conventional mortgage:
 
A mortgage loan up to a maximum of 80% of the lending value of the property. Typically, the lending value is the lesser of the purchase price and market value of the property. Mortgage insurance is usually not required for this type of mortgage. 
Counteroffer:
 
If your original offer to the vendor is not accepted, the vendor may counteroffer. This means that the vendor has amended something from your original offer, such as the price or closing date. If a counteroffer is presented, the individual has a specified amount of time to accept or reject. 
Deposit:
Money placed in trust by the purchaser when an Offer to Purchase is made. The sum is held by the real estate representative or lawyer/notary until the sale is closed and then it is paid to the vendor.
Depreciation:
 
The decrease in value of something because it is now worth less than when you bought it.
Down payment:
 
The portion of the home price that is not financed by the mortgage loan. The buyer must pay the down payment from his/her own funds or other eligible sources before securing a mortgage. 
Duplex:
 
A duplex is a building containing two single-family homes, located one above the other. 
Easement:
 
This is where someone else has the right for access to or over another person’s land for a specific purpose, such as a driveway or public utilities. 
Equity:
 
The difference between the price for which a home could be sold and the total debts registered against it. Equity usually increases as the mortgage is reduced through regular payments. Market values and improvements to the property may also affect equity. 
Estoppel Certificate:
 
Also called a certificate of status, it is a certificate that outlines a condominium corporation's financial and legal state. Fees may vary and may be capped by law (does not apply in Quebec). 
Foreclosure:
 
The legal process where the lender takes possession of your property and sells it to cover the debts you have failed to pay off. When you default on a loan and the lender feels that you are unable to make payments, you may lose your home to foreclosure. 

Home inspector:
A person who visually inspects a home to tell you if something is not working properly,  or is unsafe. He or she will also tell you if repairs are needed, and maybe even where there were problems in the past .
Home warranty:
 
(New Home Warranty Program) A guarantee that if something covered under the warranty needs to be repaired it will be. If the builder doesn’t repair it, the repair will be made by the organization that provided the warranty. 
Lender:
A mortgage lender is an institution (bank, trust company, credit union, etc.) that lends money for a mortgage. 
Mortgage:
A mortgage is a security for a loan on the property you own. It is repaid in regular mortgage payments, which are usually blended payments. This means that the payment includes the principal (amount borrowed) plus the interest (the charge for borrowing money). The payment may also include a portion of the property taxes. 
MLS — Multiple Listing Service: 
A multiple listing service is a real estate agents’ cooperative service that contains descriptions of most of the homes that are for sale. Real estate agents use this computer-based service to keep up with properties they are listing for sale in their area. 
P.I.T.H.:
 
Principal, interest, taxes and heating — costs used to calculate the Gross Debt Service ratio (GDS). 
Reserve Fund:
This amount is set aside by the homeowner on a regular basis so that funds are available for emergency or major repairs. Setting aside 5% of your monthly take-home pay will give you a well-funded reserve. 
Townhouse: 
Also called a row house, a townhouse is one unit of several similar single-family homes, side-by-side, joined by common walls.
Warranty (New Home Warranty Program):
 
Coverage in the event that an item under the warranty needs to be repaired. If the builder doesn’t repair it, the repair will be made by the organization that provided the warranty. All provinces have New Home Warranty programs for newly built homes. However, there are currently no such programs in the Territories. 
by The Gagan Bilga Team

3 Responses to " Calgary Real Estate - Real Estate Vocabulary"

Samuel wrote: The first thing you should do is talk to a motgrage broker to find out how much you qualify for so you know what price range of houses to look at.Once you have that information, find a real estate agent and let them know what area you want to look in and what your price range is. Houses up for sale through all agencies are listed in a directory called Multiple Listing Service (MLS). Your agent will input your criteria (price, area, # of bedrooms, etc.) into MLS and it will show you all of the houses for sale that meet your criteria. Keep in mind that it's not going to show you the houses that are for sale by owner.You are not limited to houses sold by your realtor's agency. The buyer doesn't pay for their agent's commission either, the seller usually does. When a seller gets an agent to sell their house, that agent agrees to a certain commission which they will agree to split with the buyer's agent (usually 50/50).Loan origination fees, recording fees, underwriter's fees are all part of closing costs which are usually paid by the seller. There are a few closing costs that are split 50/50 between buyer and seller, like title insurance and deed prep fee. Ours came out to be a few hundred dollars. It can vary depending on where you live.Besides your downpayment, you will have to pay earnest money (paid when you make an offer) which is about $500-1000 (ours was $500). This will be applied back to your closing costs upon closing. You will also need to pay your prepaids, which is your first year's worth of hazard, flood (if you need it), and motgrage (if you need it) insurance. Also escrow deposits, which is insurance and taxes.You may or may not have to pay appraisal fees. It all depends on what is negotiated. You might be able to get it in with the other closing costs.The best thing to do is to talk to a motgrage broker. Along with telling you how much you qualify for, they'll give you an estimate of how much money you need to come up with in total, downpayment and all. They can show you what the estimated closing costs, prepaids, escrow deposits are.

Posted on Tuesday, May 8th, 2012 at 6:10am.

Ramiro wrote: Interesante artículo, para los que no somos demasiado entendidos en la materia la explicación de alguno de estos términos técnicos nos viene de maravilla, a veces parece que hacen los contratos de compra-venta e hipotécas rebuscados para que no se entiendan. También interesante el comentario de Samuel donde desvela los "misterios" de la transacción.

Posted on Monday, May 21st, 2012 at 12:27pm.

Jack Hullman wrote: When you deal in real estate market then you have to come across these words at regular basis. Knowing your business terms fully would make you half success in the business. The rest half depends on your skills and knowledge to run it.

Posted on Thursday, March 7th, 2013 at 9:16am.

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