Chapter 2 Key Terms & Definitions

Question 1

1st mortgage

Answer 1

The first mortgage registered on title of a property, based on the date of registration

Question 2

2nd mortgage

Answer 2

A mortgage registered on title next, after the first mortgage, based on the date registered. If the first mortgage has been discharged, this mortgage would be a first mortgage, not a second.

Question 3

3rd mortgage

Answer 3

A mortgage registered on title after a 2nd mortgage, based on the date of registration

Question 4

Assignment of mortgage

Answer 4

The transference of a mortgage from one lender to another

Question 5

Charge/Mortgage

Answer 5

The document that indicates that there is a debt registered against the title of a property

Question 6

Chattel

Answer 6

Personal property, movable property and and other property not deemed to be fixtures

Question 7

Collateral mortgage

Answer 7

A promissory note secured by a lien on the property for the total amount registered, which may differ from the total amount advanced

Question 8

Conventional mortgage

Answer 8

A mortgage not exceeding 80% loan to value

Question 9

Discharge of Charge/Mortgage

Answer 9

The document that indicates that a debt has been removed from the title of a property

Question 10

Down payment

Answer 10

An amount of a purchaser’s money provided to the vendor from his or her own resources (not included in a mortgage loan). Under certain programs this amount may be borrowed.

Question 11

Equity take-out (ETO)

Answer 11

The removal of equity by refinancing of the property

Question 12

Interest Rate

Answer 12

The rate at which interest, which is a fee paid to the lender for borrowing money, is calculated

Question 13

Mortgage

Answer 13

The providing of real property to a lender as security in exchange for a debt

Question 14

Mortgagee

Answer 14

The lender

Question 15

Mortgagor

Answer 15

The borrower

Question 16

Payment

Answer 16

A periodic amount, in dollars, required to be made in relation to a mortgage contract. A payment may be interest only or a blend of interest and principal.

Question 17

Personal property

Answer 17

Everything one owns that is not real property. This includes chattels and other goods. Personal property is not typically fixed in its location and normally has a shorter useful life expectancy than real property.

Question 18

Real property

Answer 18

Land and everything affixed to it. It is in a fixed location and is permanent, remaining, to one extent or another, long after the current owners have relinquished their rights to it.

Question 19

Self-insured lender

Answer 19

A lender that does not use default insurance, but that charges a lender’s fee and pools the money in a reserve fund to help offset the risks associated with lending high ratio mortgages and mortgages without the protection of default insurance. The amount of this fee is typically similar to what a borrower would pay for default insurance.

Question 20

Standard Charge Terms

Answer 20

The terms and conditions of the mortgage contract, including the remedies available to the lender upon default by the borrower.

Question 21

Term

Answer 21

A period of time in which the mortgage contract is in force. After this period of time the mortgage must be fully repaid or renegotiated.

Question 22

Title

Answer 22

A term that refers to the ownership of a property. If something is registered “on title” it means that it is officially registered against the ownership of the property through the Land Titles Office, where property ownership is recorded