Chapter 12 Key Terms & Definitions

Question 1

Agreement of purchase and sale

Answer 1

A document used in the purchase of real estate in Ontario

Question 2

Certificate of Independent Legal Advice (ILA)

Answer 2

A document that states that the borrower’s lawyer has met with the borrower, explained the terms and conditions of the mortgage, and that the borrower attests that he or she is not taking the mortgage under duress or undue influence

Question 3

Creditor insurance application

Answer 3

A document used by an insurance company to determine the eligibility of an applicant for creditor insurance

Question 4

Employment insurance (EI) premiums

Answer 4

Premiums deducted from an employee’s earnings which go into a general fund; EI premiums are automatically deducted from wages but are not paid by self-employed workers

Question 5

Estoppel Certificate

Answer 5

see status Certificate

Question 6

Gift letter

Answer 6

A document that outlines the terms of a gifted down payment in a real estate purchase transaction; in other words, the down payment came from a source other than the purchaser

Question 7

Job letter

Answer 7

A document provided to an individual by his or her employer. This document is often required by a lender, in addition to other documentation, to verify an applicant’s employment as well as income

Question 8

Mortgage statement

Answer 8

A document provided by a homeowner’s current mortgage provider to the homeowner which outlines the details of the current mortgage

Question 9

Multiple Listing Service (MLS)

Answer 9

One or more databases available to real estate agents/brokers which allow real estate brokers representing sellers under a listing contract to widely share information about the seller’s property with other real estate brokers who may represent potential buyers. In some, but not all cases, real estate listings involve MLS at the outset because of the clear marketing advantages.

Question 10

Notice of Assessment (NOA)

Answer 10

A form that the federal government issues when a personal tax return has been completed and filed. This document provides a breakdown of the year’s income along with the balance owing or refund.

Question 11

Paystub

Answer 11

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 document used to verify the employee’s income

Question 12

Property assessment

Answer 12

A document provided the Municipal Property Assessment Corporation (MPAC) to homeowners to illustrate the value of a home, as assessed or determined by MPAC, for the purposes of calculating property taxes; although the homeowner may disagree with MPAC’s assessment of the value of their home, it is the MPAC Property Assessment Value that is used to determine the property’s value for tax purposes

Question 13

Purview

Answer 13

Teranet’s property resource for mortgage brokers, mortgage lenders, and mortgage insurers, is a subscription-based, automated valuation and fraud detection solution

Question 14

Self-employed commissions

Answer 14

Commissions paid to an independent agent, in other words, someone not working as an employee but on a contract or self-employed basis, who earns commission based directly on production, such as sales volume. This amount will be shown on a T4A

Question 15

Status Certificate

Answer 15

Formerly known as an Estoppel Certificate, this is a document provided by a condominium corporation (the entity that runs the condominium) to the owner of the condominium unit to indicate the current status of the corporation, among other items

Question 16

TBA

Answer 16

To Be Advised. This abbreviation is typically used when information is currently unavailable but will be available at a later date.

Question 17

T4

Answer 17

A document provided to 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 18

T4A

Answer 18

A document provided to an individual by his or her employer, typically when there is self-employed commission income or other income not listed on a T4. Employers are required by law to issue the T4A when applicable so the individual may file his or her income tax return. The T4A indicates, among other things, the amount of money the individual earned in this manner in the one-year period.

Question 19

Tax bill

Answer 19

A document provided to a homeowner by the municipal taxing authority in the jurisdiction in which the property is located. The tax bill reflects, for the mortgage agent, the amount of taxes payable by the homeowner.