Real estate terminologies can be confusing for some people, especially the terms used in paperwork and some ads. We want to make things easier for real estate buyers and home sellers in Ontario and came up with this list of important real estate terms to know when buying or selling a house in Ontario!
Amortization
Amortization refers to the time required to pay off a mortgage debt provided that all payments are done on time with the terms remaining the same for the duration of the mortgage.
Appraisal
Appraisal refers to the estimate current market value of the homes for sale as estimated by an appraiser.
Approved Lender
An approved lender is an institution authorized by the Canadian government to provide loans following the terms of the National Housing Act.
Blended Payment
Blended payment refers to payment that covers both interest and the principal loan amount. This remains the same throughout the length of the mortgage but the percentages that goes to the interest or the principal changes over time.
Closing Costs
The cost that the homebuyer has to pay on top of a home’s purchase price once the purchase has been finalized. Closing cost includes land transfer fees, legal fees, and disbursements and may be estimated as 1.5% to 4% of a home’s purchase price.
CMHC or Canada Mortgage and Housing Corporation
CMHC is a Crown corporation that presides over the National Housing Act for the federal government. It is responsible for encouraging improvements to the living and housing conditions of Canadians.
Counteroffer
An offer made by the home seller if a buyer’s initial offer is not accepted due to some changes needed in pricing, terms, or closing date.
Deposit
Deposit is the amount placed in trust by a home buyer when making an offer to purchase a home. This money is held by a lawyer or a real estate representative until the sale is finalized.
Down Payment
A portion of a home’s selling price that is not covered by a mortgage loan and is paid by the home buyer prior to getting a mortgage.
Home Inspector
A professional who will examine a home for sale to assess if anything is unsafe, broken, or needs repair or replacement. A good home inspector can also identify prior problems in the house.
Interest
Interest is the cost paid for borrowing money. This is paid to the lender in regular payments together with the repayment of the loaned amount.
Lender
Lenders are anyone who would loan money to an individual to buy property. They include pension funds, finance companies, banks, caisses populaires, credit unions, insurance companies, and trust companies.
MLS or Multiple Listing Service
A service listing most of the available homes for sale in a country.
New Home Warranty Program
A warranty program that guarantees that defects found in a new home will be repaired if the builder hasn’t done so.
Offer to Purchase
A written offer by the buyer that sets out the terms the buyer is willing to go for to purchase a home. If the offer is accepted by the seller, the offer to purchase becomes a legally binding contract.
Operating Costs
The monthly cost of owning a home which includes property insurance, maintenance and repairs, utilities, and property taxes.
Real Estate Agent or Realtor
A professional who can help a home buyer find a home, negotiate for the best price, and send in an offer.
These are only some of the most important terms to know when dealing with real estate in Ontario. If you are selling or buying a home in Oakville and need a professional to help you, feel free to contact us at Goodale Miller Team.