Canadian Financial, Real Estate and Mortgage Glossary

Lending Terms

advance line of credit (ALOC)Acronym
amortizationDefinition (Mortgages, Financial-banking)
Amortization refers to the process of gradually paying down the principal of a loan. Each payment toward the principal reduces your loan by that amount. This is different than an interest-only loan payment where the principal balance is never reduced. Amortization for a mortgage loan in Canada is normally 25 years, but can be as few as 5 years.
amortization periodDefinition (Mortgages, Financial-banking)
The amount of time it will take to pay off a mortgage by making routine payments.
amortization scheduleDefinition (Mortgages, Financial-banking)
A detailed table showing the amortization of a loan which includes the beginning principal amount, period payments, the interest portion of each payment, the principal reduction portion each payment, and the ending balance. The Canadian Equity Group has developed a mortgage rate calculator which will generate a perfect example of an amortization schedule.
amortization tableDefinition (Mortgages, Financial-banking)
A mathematical formula used to calculate monthly mortgage payments based on the borrowed loan amount, the interest rate, and the loan term.
amortization termDefinition (Mortgages, Financial-banking)
The time required to amortize (repay) an entire mortgage loan.
anti-predatory lending (APL)Acronym
  ➥  Mostly a US mortgage term.
bankDefinition (Mortgages, Financial-banking)
An institution that acts as a financial intermediary by receiving money from depositors and lenders and also lending to borrowers.
business line of credit (BLOC)Acronym
business revolving line of credit (BRLOC)Acronym
commercial line of credit (CLOC)Acronym
equity line of credit (ELOC)Acronym
Home Trust Company (HTC)Company Est.1977, Canada-wide
  ➥  A Canadian NHA approved mortgage lender that offers all lending types, including both residential single family and multi-unit mortgages.
interest rate (IR)Definition (Investments, Mortgages, Financial-banking)
The rate a lender charges an individual to borrow money.
interest rate swap (IRS)Acronym
line of credit (LOC)Definition (Financial-banking)
A commitment by a financial institution to lend up to a specified maximum amount to a customer during a specified period of time.
loan origination interface (LOI)Acronym
loan origination software (LOS)Acronym
personal line of credit (PLC)Acronym
principal and interest (P&I, PI)Definition (Mortgages, Financial-banking)
Acronym for the elements of a mortgage payment: principal and interest.
purchase line of credit (PLOC)Acronym
revolving line of credit (RLOC)Definition (Financial-banking)
An agreement to lend a specific amount to a borrower, and to allow that amount to be borrowed again once it has been repaid. Most credit cards offer revolving credit.
secured line of credit (SLC)Acronym
total debt service (TDS)Definition (Mortgages)
The ratio of a borrower's total monthly debt payments to his or her monthly gross income. Lenders use this ratio to determine how much of a loan a borrower is qualified for.
unsecured line of credit (ULOC)Acronym
variable rate demand note (VRDN)Acronym
A request or demand made by a lender to pay back borrowed funds and any accrued interest at the current money market rate.
  ➥  A debt instrument that represents borrowed funds.

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Easy-to-Use Mortgage Calculator
When Canadians buy their homes, they'll renew on average four times before the house is completely paid off. Want to see what your balance is at the end of your mortgage term? Just use our mortgage calculator to find out.
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Important Tip on Credit Card Debt
Credit card interest rates average at around 18.9 per cent. You, like many other Canadians, may have over ten thousand dollars charged to your credit card, but, if you only make the minimum required monthly payment of 2 per cent ($200 the first month) that $10,000 in credit card debt will ultimately take more than 57 years and cost around 40,000 dollars to fully pay off.

Using a home equity loan will allow you to eliminate the high interest credit card (and by eliminate we mean cut up) and consolidate the debt to a low interest rate mortgage payment.
Mortgage Brokers Will Get You Pre-Approved Before You Buy
Before you go house shopping, find out what you can comfortably afford with a pre-approval from a mortgage broker. Pre-approvals can last as long as 120 days, which gives you ample time to find your home. If at any point in time rates change, a mortgage broker will honour the lowest rate during the pre-approval period. Get pre-approved today!
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