Closed mortgage: A mortgage that can’t normally be paid off or renegotiated before the end of the term without the lender’s permission and a financial penalty. Some closed mortgages allow for extra or accelerated payments, but only if specified in the mortgage agreement.
Closing costs: The legal fees, transfer fees, disbursements and other costs that must be paid when buying a home. These are in addition to the down payment and the GST, PST and HST if applicable. Closing costs are due on the day the buyer officially takes ownership of the home, and they usually range from 2% to 4% of the purchase price.
Closing date: The date when the sale of the property becomes final and the new owner takes possession of the home.
Collateral mortgage: A collateral mortgage allows a lender to register your current mortgage than a higher amount that has been advanced.
Commitment letter (or “mortgage approval): A written notification from a lender to a borrower that says a mortgage loan of a specific amount is approved under specific terms and conditions.
Compound interest: Interest that is calculated on both the original principal and the interest that has already been earned (or “accrued”) on that principal.
Conditional offer: An offer to purchase a home that includes one or more conditions (for example, a condition that the buyer is able to get a mortgage) that must be met before the sale can be officially completed.
Condominium (or “strata”): A type of homeownership where people own the unit they live in and share ownership of all common areas with the other owners. Common areas can include parking facilities, hallways, elevators, lobbies, gyms, swimming pools and the grounds or landscaping.
Conventional mortgage: A mortgage loan equal to or less than 80% of the value of a property. (That is, where the down payment is at least 20%.) Conventional mortgages don’t usually require mortgage loan insurance.
Counteroffer: An offer made by the seller of a home after rejecting an offer by a potential buyer. The counteroffer usually changes something from the original offer, such as the price or closing date.
Credit bureau: A company that collects information from various sources on a person’s borrowing and bill-paying habits. They provide this information to lenders to help them assess whether or not to lend money to that person.
Credit history (or “credit report”): The report a lender uses to determine if a person should get a mortgage.