Chapter 11 Key Terms & Definitions

Question 1

Business license

Answer 1

A license provided to a business that serves as proof that a business is registered and operational

Question 2

Civic address

Answer 2

The street address of a property, including the number of the property, the street, the unit number (if applicable), the province and postal code

Question 3

Closed-ended question

Answer 3

A question designed to elicit a single word answer such as yes or no

Question 4

Co-applicant / co-borrower

Answer 4

An individual who is registered on title and who is applying for financing with the applicant

Question 5

Co-signer

Answer 5

An individual who is registered on title and who is guaranteeing that payments will be made to the lender if the borrower defaults. Usually required if the applicant has insufficient income

Question 6

Decision maker

Answer 6

The individual who tends to make the majority of the decisions for the family unit

Question 7

File

Answer 7

The collection of relevant documents related to a mortgage transaction

Question 8

File checklist

Answer 8

A document that allows the mortgage agent to check off the documents received in the file

Question 9

Financial statements

Answer 9

Formal records of a business’ financial activities. These statements provide an overview of a business’ profitability and financial condition in both short and long term.

Question 10

Guarantor

Answer 10

An individual who is not registered on title but who is guaranteeing that payments will be made to the lender if the borrower defaults. Usually required if the applicant has poor credit.

Question 11

Legal description

Answer 11

A description of the property, including the lot and plan number, and the municipality, township or borough in which the property is located.

Question 12

Letter of employment

Answer 12

A document provided by an employer that lists the employee’s position, length of employment, and income.

Question 13

MLS listing

Answer 13

Multiple Listing Service. This is typically how real estate salespersons expose a property to the marketplace.

Question 14

Mortgage repayment history

Answer 14

A history of the applicant’s mortgage payments, typically over 12 to 24 months, provided by a lender

Question 15

Open-ended question

Answer 15

A question designed to elicit a conversational answer, not simply a “yes” or “no” answer

Question 16

Paystub

Answer 16

A document provided to an individual by his or her employer each time the employee is paid (by cheque, direct deposit, or other), and is often required by a lender in addition to a job letter and/or any other documentation used to verify the employee’s income

Question 17

PIPEDA consent

Answer 17

Consent under the Personal Information Protection and Electronic Documents Act that allows the mortgage agent to use the applicant’s information for a set of specific purposes

Question 18

Property insurance policy

Answer 18

An insurance policy that protects the insured against losses due to fire, vandalism, etc. of the insured’s property

Question 19

Property tax statement

Answer 19

A statement provided by the municipality in which the property is located indicating the amount of annual property taxes and if any property taxes are outstanding

Question 20

Purchase and sale agreement

Answer 20

The document completed by a real estate salesperson for the sale of property

Question 21

T4

Answer 21

A document provided by an individual by his or her employer, typically when there is employment income, such as salaried or hourly income. Employers are required by law to provide the T4 so that an employee may file his or her income tax return. The T4 indicates, among other things, the amount of money the employee earned in the one-year period, as well as the deductions from earnings

Question 22

Tax return

Answer 22

The document required to be completed by a taxpayer and submitted to Canada Revenue Agency that describes income, deductions, expenses, etc. as prescribed by the Income Tax Act