Chapter 7 Flashcards
Gross debt service ratio
Your monthly mortgage related debt payments, divided by your total monthly gross house hold income
Conventional mortgage
A mortgage where the down payment is at least 20 percent of the homes appraised value.
High ratio mortgage
A mortgage where the down payment is less than 20 percent of the homes appraised value
Vendor take-back mortgage
A mortgage where the lender is the seller of the property
Home inspection
A report on the condition of the home
Amortization
The expected number of years it will take a borrower to pay off the entire mortgage loan balance.
Mortgage term
The period of time over which the mortgage interest rate and other terms of the mortgage contract will not change
Payment frequency
The frequency with which you make a mortgage payment
Closed mortgage
Restricts your ability to pay off the mortgage term unless you are willing to pay a financial penalty
Open mortgage
Allows you to pay off the mortgage balance at any time during the mortgage term
Fixed rate mortgage
A mortgage in which a fixed interest rate is specified for the term of the mortgage
Prepayment privileges
Features that allow borrowers to monthly mortgage payment and pay off a lump sum of thee original balance
Convertible mortgage
Allows you to renew your mortgage before the
Preapproval certificate
Provide you with a guideline on how large a mortgage you can afford and an estimate of your mortgage payment based on your financial situation.
Variable rate mortgage
A mortgage where the interest charged on the Loan changes in response to movements in a specific market-determined interest rate. Usually the rate is referred to as prime.
