Definitions - There are a lot of terms involved in real estate deals.  Here I have provided definitions to aid with your understanding.

Please click on the Terms below to see their definition.

1. Adjustments at Closing
2. Amortization
3. Anniversary Period
4. Blended Payments
5. Bridge Financing
6. Carrying Costs
7. Closed Mortgage
8. Closing Costs
9. Closing Date
10. Conditional Offer
11. Conventional Mortgage
12. Deed
13. Default
14. Deposit
15. Down Payment
16. Equity
17. Fire Insurance Firm Offer
18. First Mortgage
19. Fixed-Rate Mortgage
20. Gross Debt Service Ratio (GDS)
21. High Ratio Mortgage
22. Home Equity
23. Inspection
24. Interest Rate Differential Amount (IRD)
25. Interim Financing
26. Maturity Date
27. Mortgage
28. Mortgage Life Insurance
29. Mortgagee
30. Mortgagor
31. Multiple Listing Service (MLS)
32. Open Mortgage
33. P.I.T.
34. Porting
35. Power of Attorney Pre-approval
36. Prepayment
37. Prepayment Penalty
38. Principal
39. Real Estate Agent
40. Refinancing
41. Renewal
42. Second Mortgage
43. Security
44. Survey
45. Term
46. Title
47. Title search
48. Total Debt Service Ratio (TDS)
49. Variable Rate Mortgage (VRM)
50. Vendor

1. Adjustments at Closing
   Property taxes and/or utility bills and condominium common expenses, if any, that have been prepaid by the vendor are pro-rated and paid by the purchaser to the vendor on closing. Or where the Vendor, if any, has not paid up his share of property taxes, utilities and condominium expenses.
   
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2. Amortization
   The Number of years it takes to repay the entire amount of the mortgage.
   
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3. Anniversary Period
   Your anniversary period is the 12 month period that starts each year on your mortgage interest adjustment date or, if you have renewed or amended your mortgage, the effective date of your renewal or amendment.
   
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4. Blended Payments
   Payments consisting of both a principal and an interest component, paid on a regular basis (e.g. weekly, biweekly, monthly) during the term of the mortgage. The principal portion of payment increases, while the interest portion decreases over the term of the mortgage, but the total regular payment usually does not change.
   
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5. Bridge Financing
   A loan made for a short term, to "bridge" (or cover) the time gap between completing the purchase of one property and finalizing arrangements to pay for it. The need for this type of financing often results from mismatched closing dates.
   
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6. Carrying Costs
   The expenses of living in and maintaining a home and property. This includes mortgage payments, property taxes, heating, repairs, maintenance fees, etc.
   
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7. Closed Mortgage
   A mortgage which cannot be prepaid over defined limits, renegotiated or refinanced prior to the expiry of the term, except with compensation or breakage costs. Usually has a lower rate than a Open Mortgage.
   
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8. Closing Costs
   Costs which are payable when the sale is closed. Standard closing costs may include adjustments for taxes, utilities and condominium common expenses, property land transfer taxes; property insurance, and legal fees.
   
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9. Closing Date
   The date on which the sale of a property becomes final and the new owner usually takes possession.
   
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10. Conditional Offer
    An offer to purchase subject to conditions. These conditions may relate to financing, home inspection or the sale of an existing home. Usually a time limit in which the specified conditions must be satisfied is stipulated.
    
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11. Conventional Mortgage
    A mortgage where the down payment is 25% or greater of the purchase price. Conversely a mortgage that does not exceed 75% of the purchase price of the home. Mortgages that exceed this limit must be insured against default, and are referred to as high-ratio mortgages.
    
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12. Deed
    A legal document that transfers and evidences ownership of the property to the buyer.
    
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13. Default
    Failure to repay an outstanding debt as agreed.
    
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14. Deposit
    A sum of money deposited in trust by the purchaser when making an offer to be held in trust by the vendor's agent, broker, lawyer or notary until the closing of the transaction.
    
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15. Down Payment
    The amount of money put forward by the buyer toward the purchase price of a home.
    
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16. Equity
    The difference between the price for which a property could be sold and the total amount owing on it.
    
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17. Fire Insurance
    Before a mortgage can be advanced, the purchaser must have arranged fire insurance. A certificate or binder from the insurance company may be required on closing.
    
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18. First Mortgage
    A mortgage that is registered first against the property. This mortgage has to be paid first in the event of sale or default.
    
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19. Fixed-Rate Mortgage
    A mortgage for which the rate of interest is fixed for a specific period of time (the term).
    
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20. Gross Debt Service (GDS) Ratio
    The percentage of the borrower's gross income that will be used for monthly payments of principal, interest, taxes, heating costs and ½ condominium fees. Most lenders recommend that the GDS ratio be no more than 32% of your gross (before tax) monthly income.
    
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21. High Ratio Mortgage
    Where the mortgage amount exceeds 75% of the minimum of the purchase price or the appraised value of the property. If you don't have 25% of the lesser of the purchase price or appraised value of the property, your mortgage must be insured against payment default by a Mortgage Insurer, such as CMHC or GE.
    
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22. Equity
    The difference between the price for which a property could be sold and the total amount owing on it.
    
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23. Inspection
    The examination of the house by a building inspector selected by the purchaser.
    
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24. Interest Rate Differential Amount (IRD)
    An IRD amount is a compensation charge that may apply if you pay off your mortgage principal prior to the maturity date or pay the mortgage principal down beyond the prepayment privilege amount. The IRD amount is calculated on the amount being prepaid using an interest rate equal to the difference between your existing mortgage interest rate and the interest rate that we can now charge when re-lending the funds for the remaining term of the mortgage.
    
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25. Interim Financing
    Short-term financing to help a buyer bridge the gap between the closing date on the purchase of a new home and the closing date on the sale of the current home.
    
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26. Maturity Date
    Last day of the term of the mortgage agreement. The mortgage must be paid in full or renewed by this date.
    
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27. Mortgage
    A mortgage is both a loan used to purchase or refinance a home and a security for the repayment of the loan.
    
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28. Mortgage Life Insurance
    A form of reducing term insurance recommended for all mortgagors. If you die, have a terminal illness, or suffer an accident, the insurance can pay the balance owing on the mortgage. The intent is to protect survivors from the loss of their homes.
    
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29. Mortgagee
    The lender.
    
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30. Mortgagor
    The borrower.
    
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31. Multiple Listing Service (MLS)
    A computer-based system for relaying information to real-estate agents about properties for sale.
    
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32. Open Mortgage
    A mortgage which can be prepaid, with out limit, at any time prior to maturity, without breakage costs. Usually has a higher rate than a Closed Mortgage.
    
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33. P.I.T.
    Principal, interest and taxes. Together, these make up the regular payment on a mortgage if you elect to include property taxes in your mortgage payments.
    
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34. Porting
    This allows you to move to another property without having to lose your existing interest rate. You can keep your existing mortgage balance, term and interest rate plus save money by avoiding early discharge penalties.
    
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35. Power of Attorney
    Delegated written authority to a person to act legally, including the signing of documents, on behalf of another.
    
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36. Prepayment
    Allows the borrower to prepay a portion or all of the principal mortgage balance, with or without penalty, ahead of schedule. This decreases the total amount of interest paid over the life of your mortgage. This option is typically restricted to specific amounts and times.
    
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37. Prepayment Penalty
    A fee charged by the lender when the borrower prepays all or part of a closed mortgage more quickly than is set out in the mortgage agreement.
    
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38. Principal
    The amount of the loan owed to the lender at any specified time, not including interest.
    
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39. Real Estate Agent
    A licensed agent employed to negotiate the purchase and sale transaction between the buyer and the seller.
    
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40. Refinancing
    Renegotiating your existing mortgage agreement. May include increasing the principal or paying out the mortgage in full.
    
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41. Renewal
    At the end of a mortgage term, the mortgage may "roll over" on new terms and conditions acceptable to both the lender and the borrower. This is known as renewing a mortgage. Otherwise, the lender is entitled to be repaid in full. In this case, the borrower may seek alternative financing.
    
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42. Second Mortgage
    A mortgage granted when there is already a mortgage registered against a property. If the borrower defaults and the property is sold, the second mortgage is paid after the first.
    
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43. Security
    Property, or assets, offered as backing for a loan. In the case of mortgages, the property being purchased or refinanced forms the security for the loan.
    
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44. Survey
    A document providing details of a property's boundaries, measurements and structures. It also describes any easements, rights-of-way or encroachments made by either your property or by adjoining properties onto your property.
    
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45. Term
    The length of time during which the specific mortgage agreement is effective. When the term expires, the balance of the principal is either repaid in full or the mortgage is renegotiated at then-current market rates and conditions.
    
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46. Title
    Right of ownership of property, and including evidence of such ownership.
    
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47. Title search
    A detailed examination of the registered title documents to ensure there are no liens or other encumbrances, or claims, on the property, and no question regarding the seller's statement of ownership.
    
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48. Total Debt Service (TDS) Ratio
    The percentage of gross income needed to cover monthly payments for housing and all other debts and financing obligations. The total should generally not exceed 37% of gross monthly income.
    
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49. Vendor
    The seller in a real estate transaction.
    
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50. Variable Rate Mortgage (VRM)
    A mortgage for which the rate of interest may change if other market conditions change. This is sometimes referred to as a floating rate mortgage. A VRM may contain a rate capper. A rate capper is a variable-rate mortgage with a built-in safety net. It's designed to offer you the flexibility of a variable-rate mortgage plus security and protection from increased rates for a five-year term.
    
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