Qualifying rate
A qualifying rate is the rate a lender uses when determining whether you qualify for the mortgage you applied for. Your lender uses this rate to calculate your debt-service ratio — the ratio between your debt and income. This helps your lender determine if you can repay the mortgage.
Refinancing (renegotiating)
Mortgage refinancing is a transaction that replaces an existing mortgage before it matures with a new one, on different mortgage terms. In some cases, prepayment charges apply. Refinancing is a financial tool you can use to consolidate debt and access the equity in your home to pay for other expenses.
Renewal (renewing)
When a mortgage term ends, you may negotiate another term with your lender. If you don't renew the mortgage, you must pay it off in full.
Residential mortgage
A type of mortgage where the mortgaged property a residence.
Reverse mortgage
If you're over age 55, a reverse mortgage lets you borrow up to 50% of your home's value. You don't make payments on a reverse mortgage. But interest grows on the mortgage debt until you sell the home or pass away.
Second mortgage
If you already own a property with a mortgage, you may be able to take out a second mortgage. You may want additional funds to renovate or for personal reasons. A second mortgage is one way to take money out of a home's growing equity. Second mortgages carry more risk than first mortgages.
Statement of adjustments
The statement of adjustments is a document prepared by the seller's lawyer. It states the purchase price, deposit amount and financial adjustments needed for prepaid taxes, utilities or condo fees. When these calculations are final, you know exactly how much to pay the seller on the closing date.
Survey
A survey is a property plan that identifies property boundaries, lot size and building position. It also shows if there are any overhanging structures or shared driveways that could impact property value. A professional land surveyor prepares the survey. Your lender may ask you for a current survey of the property during the mortgage application process.
Title insurance
Title insurance protects buyers and lenders from defects on title discovered after closing. Title defects could include title fraud, survey errors, municipal work orders, zoning violations and encroachments. Consult with your lawyer about title insurance. If you buy title insurance, it's added to your closing costs.
Variable-rate mortgage
If you have a variable-rate mortgage, your interest rate changes according to a financial index. Your mortgage agreement explains how and when the rates change. Monthly payments may stay the same. But if interest rates go down, more of your payment goes towards the principal. If rates go up, more of your payment goes towards the interest.