Real Estate and Financial Terminology

Ever wonder what those Real Estate Terms or Financial Terms meant? Browse the Glossary for an in-depth explanation   Glossary   A B C D E F G H I J K L M N O P Q R S T U V W X Y Z Other Abandonment  A disclaimer of ownership by the trustee or debtor in property deemed burdensome or inconsequential. Once property has been "abandoned," it is no longer the property of the estate, and creditors can seek to recover their money. Abstract of judgment,law   The summary of a court judgment that creates a lien against a property when filed with the county recorder. Abstract of Title  A written history of all the transactions that bear on the title to a specific piece of land. An abstract of title covers the time from when the property was first sold to the present. Used by the title company to produce a title binder. Accelerated cost recovery system   A tax calculation that provides greater depreciation in the early years of ownership of real estate or personal property. Acceleration clause   A provision that gives a lender the right to collect the balance of a loan if a borrower misses a payment. Accelerated depreciation   A bookkeeping method that depreciates property faster in the early years of ownership. Acceptance   The seller's written approval of a buyer's offer. Access   Any means by which a person can enter property. Accessibility   The degree to which a building or site allows access to people with disabilities. Account Agreement  An agreement that you sign and which lists your rights and responsibilities and the bank's rights and responsibilities for the bank account. Accounting Method  The method used by a business or individual to keep records. Most individuals and small businesses use the cash method, although businesses that maintain inventory are required to use the accrual method. See also "Accrual Method" or "Cash Method." Accounts Payable  Money owed by a business for goods and services received. Accounts Receivable  Money owed to a business by purchasers of goods and/or services. Accretion   The gradual addition to the shore or bank of a waterway by deposits of sand or silt. Accrual Method  Business accounting in which you report income in the year you earned it and expenses in the year you incur them, rather than reporting income and expenses when you receive payment or when you pay the expenses. Under this method, if you built a deck and billed the client in December 1999, the amount you charged would be reported in 1999 as income even if you didn't get the payment until January 2000. If you own a business that maintains an inventory, you are required to use the accrual method. Accrue  To come into possession or gather together an amount, often over a period of time Accrued Interest  Interest which has already been earned but has not yet been paid Acknowledgment   A written declaration affirming that a person acted voluntarily. Acquiring Financial Institution  Merchants must maintain an account with an acquiring financial institution to receive credit for credit card transactions. Daily credit card totals are deposited into the merchant's account minus any fees. Acquisition Fee  A fee charged by some leasing companies for originating the loan, just as mortgage lenders charge points as an origination fee. This fee is often not specified in a contract, but rolled into the capitalized cost when calculating monthly payments. Acre   A measurement of land equal to 43,560 square feet. Acre foot   The volume of material needed to cover an acre of land one foot deep. Act of God  When used in insurance policies, an event caused by natural forces such as hail, rain, tornado, lightning, floods or earthquakes, which results in damage to property. Active Income  Active income, such as wages, tips and profits from your business that you materially participate in, and portfolio income, such as interest and dividends. Generally, you cannot offset active income with passive losses. See also "Non-passive Income." Active solar system   A system that utilizes electric pumps or fans to transfer solar energy for storage or direct use. Actual age   The number of years a structure has been standing. Actual Cash Value  The amount of money that a broker or dealer has invested in the purchase and repair of a used vehicle. Addendum   An addition or change to a contract. Additional principal payment   Extra money included in the monthly payment to help reduce the principal and shorten the term of the loan. Additional Property  Address of real estate that a person owns that is not being financed. Add-on interest   The interest a borrower pays on the principal for the duration of the loan. Adjustable-rate mortgage (ARM)   A loan with an interest rate that is periodically adjusted to reflect changes in a specified financial index. Adjusted Balance  A method used by some card issuers in which they subtract all payments made during the month, then add the finance charges. Adjusted Basis  The amount you use to determine your profit or loss from a sale or exchange of property. To determine your adjusted basis for an asset, start with the amount you originally paid, add your cost of improvements and assessments, then subtract deductions you have taken, such as depreciation and depletion. Adjusted cost basis   The cost of any improvements the seller makes to the property. Deducting the cost from the original sales price provides the profit or loss of a home when it is sold. Adjustment period   The amount of time between interest rate adjustments in an adjustable-rate mortgage. Administrator   A person given authority to manage and distribute the estate of someone who died without leaving a will. Administrator's deed   A legal document that an administrator of an estate uses to transfer property. Adverse possession   The acquisition of title to property through possession without the owner's consent for a certain period of time. Adverse use   The access and use of property without the owner's consent. Aeolian soil   Soil that is composed of materials deposited by the wind. Affiant   A person who makes a sworn statement. Affirmation   A substitution for an oath granted to people based on religious reasons. Affinity Card  A credit card (usually Visa or MasterCard) that has a promotion arrangement with an affiliated organization (often a charity or non-profit group). The logo of the group appears on the card and the group usually gets a percentage of the sales made on the card. A-frame design   An interior style that features a steeply peaked roofline and a ceiling that is open to the top rafters. Agency   The relationship of trust that exists between sellers and buyers and their agents. The agency is formed through a written contract. Agency closing   The process by which a lender uses a title company or other firm as an agent to complete a loan. Agent   A person who acts on behalf of another. In real estate, an agent is a person who conducts transactions on behalf of sellers and sometimes buyers Agreed boundary   A compromise boundary to which property owners agree in order to resolve a dispute. Agreement of sale   A document in which a property's buyer and seller approve the price and other terms of the transfer of title. Air Miles  One of the most popular rewards issued by airline-affiliated co-branded cards. Air miles are earned with every use of the card, and then transferred monthly to the cardholder's account with that airline. Alcove   A recessed section of a room, such as a breakfast nook. Alienation clause   A requirement that the borrower pay the mortgage in full upon transfer of the property. Alimony  Monthly payments received by an ex-spouse. Payments must be received continuously for one year to be counted toward qualifying income for a loan. Alkali   Mineral salt found in soil. Alkaline soil   Soil that contains a higher concentration of mineral salt than natural acid. Alley   A lane behind a row of buildings or between two rows of buildings. Allowances   Money set aside by builders for amenities, such as driveways, landscaping, carpeting and fixtures, that are standard but have optional designs. Alternative Minimum Tax  This tax primarily affects high-income taxpayers who shelter some of their income from tax through certain tax preference items or deductions. It is often referred to in tax publications as AMT and, if your income meets the limit, you have to recalculate your tax due based on the separate alternative minimum tax rates and tables. Alternative mortgage   Any home loan that does not conform to a standard fixed-rate mortgage. Aluminum-clad windows   Wooden windows with aluminum covering the exterior. Aluminum siding   A metal covering that provides an alternative to paint for owners of wood homes. Amenities   Desirable features of a neighborhood, housing development or condominium, such as nearby parks, playgrounds, shuffleboard courts, swimming pools, community centers and bocce courts.. Amortization   The process of gradually paying down the principal of the loan. As each payment toward principal is made, the mortgage amount is reduced or amortized by that amount. This is in contrast to an interest-only payment where the principal balance is never reduced. The normal amortization period for a mortgage in Canada is 25 years, but can be as short as 5 years. Amortization Schedule  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. Amortization Table  Mathematical formula for calculating a borrower's monthly payments, based on the amount borrowed, the interest rate and the term of the loan. Amortized Loan  A loan that is completely paid off, interest and principal, by a series of regular payments that are equal or nearly equal. Amount Due at Lease Signing  The total amount due before the consumer can take delivery of a leased vehicle. It can include any security deposit, title fee, capitalized cost reduction, monthly payments paid at signing and registration fees. Amount Financed  The principal that is financed. It could include the cost of the purchase and other items rolled into the payments. Amperage   The strength of an electrical current. Anchor bolt   A large steel bolt anchored in concrete and attached to a building to prevent the structure from moving. Angels  Private individuals with capital to invest in business enterprises Annual   Any kind of plant that must be planted every year. Annual Fee  A bank charge for use of a credit card levied each year, which can range from $15 to $300, billed directly to the customer's monthly statement. Many credit cards come without an annual fee. Annual mortgagor statement   A yearly statement to borrowers that details the remaining principal and amounts paid for taxes and interest. Annual Percentage Rate (APR)   A yearly rate of interest that includes fees and costs paid to acquire the loan. Lenders are required by law to disclose the APR. The rate is calculated in a standard way, taking the average compound interest rate over the term of the loan, so borrowers can compare loans. In mortgages, it is the interest rate of a mortgage when taking into account the interest, mortgage insurance, and certain closing costs including points paid at closing. There is no APR in an automobile lease; instead, the cost of money is expressed as the money factor. Annual Percentage Yield (APY)  The percentage, required by Truth in Savings regulations, to be disclosed on interest-bearing deposit accounts that reflects the total interest to be earned based on an institution's compounding method, assuming funds remain in the account for a 365-day year. Annuity   A regular periodic payment made by an insurance company to a policyholder for a specified period of time. Anticipatory breach   A communication that informs a party that the obligations of the original contract will not be fulfilled. Application   A document that details a potential borrower's income, debt and other obligations to determine credit worthiness. Application fee   The fee that a lender charges to process a loan application. Appraisal   An opinion of the value of a property at a given point in time. Appraisal fee   The fee that an appraiser charges to estimate the market value of the property. Appraisal report   A detailed written report on the value of a property based on recent sales of comparable sites in the area. Appraised value   An opinion of the current market value of a property. Appraiser  A person qualified by education, training, and experience to estimate the value of real property and personal property. Appreciation   An increase in the value of a home or other property.. Approval  An assessment made by a lender of a borrower's ability to pay for a home and a confirmation of the amount the borrower may obtain. Arbitration   A method of resolving a dispute in which a third party renders a decision. Arbor   An area shaded by trees, shrubs or vines on a latticework structure. Arch   A curved structure that supports weight over an area, such as a doorway. Architect   A licensed professional who designs homes, buildings and other structures. Architectural fees   The fee an architect charges for services. In general, architects charge for their services by the hour, by the square foot, or by a percentage of the project budget. Arpent   An area equal to about 0.845 acres, traditionally used in France, Quebec and Louisiana. Nowadays, hectares and acres are more commonly used measurements of area. As is Where is  The buyer must examine the goods or property and buy at his or her own risk. Asbestos   A fire-resistant mineral used for insulation and home products that has been found to pose a health hazard. As-is condition   The purchase or sale of a property in its existing condition. Asking price   A seller's initial price for a property. Assessed value   A tax assessor's determination of the value of a home in order to calculate a tax base. Assessment   The estimated value of a piece of real estate or a levy placed on property in addition to taxes. Assessment rolls   A list of taxable property compiled by the assessor. Assets   Items of value which include cash, real estate, securities and investments. Asset Case  A bankruptcy proceeding in which there are non-exempt assets that might be available to pay the claims of creditors. Assignor   A person who transfers rights and interests of a property. Assignment  The transfer of a mortgage from one person to another Assumable mortgage   A mortgage that can be transferred to another borrower. Assumption clause   A provision that allows a buyer to take responsibility for the mortgage from a seller. Assumption fee   A fee the lender charges to process new records for a buyer who assumes an existing loan. ATM Access Fee  Fee charged in addition to the individual account fees for an account holder to gain access to the ATM system. Can be monthly, weekly, or annual fee. See also "Automated Teller Machine." ATM Alliance  An alliance of banks and/or credit unions designed to avoid or minimize surcharges for non-bank customers at ATM machines. A customer at one bank in the alliance can use surcharge-free ATMs at all the banks in the alliance. See also "Automated Teller Machine." ATM Card Fee  Fee charged in addition to individual account fees to obtain an ATM card – not a debit card fee. This may be an annual fee or a monthly fee. Also the fee may be per card or per account. For instance, if an account is held jointly, does the bank charge for the second person to hold a card or does it charge one fee for all the cards on an account. See also "Automated Teller Machine." ATM Surcharge  Fee charged for a non-account holder to use bank-owned ATM. Example: You have an account at Bank A but use Bank B's ATM. Bank B will charge you a surcharge. Make sure to review what your bank charges you to use another bank's ATM system. You may have to pay a surcharge to Bank B plus a non-bank owned ATM charge to Bank A. See also "Automated Teller Machine." Automatic Payment  An arrangement that authorizes periodic withdrawals to be made from a chequing or savings account to pay bills, usually regular monthly payments such as for rent or mortgages. Average Annual Yield  The average yield per year over the life of the investment, assuming all principal and interest remain on deposit until maturity. Average Daily Balance  This is the method by which most credit cards calculate your payment due. An average daily balance is determined by adding each day's balance and then dividing that total by the number of days in a billing cycle. The average daily balance is then multiplied by a card's monthly periodic rate, which is calculated by dividing the annual percentage rate by 12. Average price   The price of a home determined by totaling the sales prices of all houses sold in an area and dividing that number by the number of homes. Average Tax Rate  The real rate of taxes you pay after taking into account the various federal tax brackets. There are different tax rates for different levels of income; you pay lower rates on the first part of your income, more on the later earnings. As you pass each income level, the money above that level is taxed at the next higher rate. Therefore, your average tax rate is less than the top rate you pay on a portion of income. Avigation easement   An easement over private property near an airport that limits the height of structures and trees. Awning windows   Single-sash windows that tilt outward and up. Back fill   Soil used to solidify the foundation of a structure. Back title letter   A letter that a title insurance company gives to an lawyer who then examines the title for insurance purposes. Backup offer   A secondary bid for a property that the seller will accept if the first offer fails. Backwater valve   A valve in a sewer line that prevents sewage from flowing back into a house. Bad Debts  Money you can't collect. Businesses are allowed to deduct bad debts under certain circumstances. If a bad debt is personal, it may be deducted in some cases as a short-term capital loss. Loans between family members generally are classified as non-business. Balance  The amount of money in your account. Balance sheet   A statement that shows the assets, liabilities and net worth of an individual. Balance Transfer  The process of moving an unpaid credit card debt from one issuer to another. Card issuers sometimes offer teaser rates to encourage balance transfers coming in and balance transfer fees to discourage them from going out. Balance Transfer Fee  Fee charged customers for transferring an outstanding balance from one card to another Balloon-frame construction   A type of framing used in two-story homes in which studs extend from the ground to the ceiling of the second floor. Balloon loan   A loan in which the payments aren't set up to repay the loan in full by the end of the term. At the end comes the balloon payment -- one that is larger than the other, periodic payments and pays off the remaining principal. Balloon Mortgage  A loan that has regular monthly payments which amortize over a stated term but call for a final lump sum (balloon payment) at the end of a specified term, or maturity date, such as 10 years. Balloon payment   The final lump sum payment due at the end of a balloon mortgage. Balustrade   Railing held up by a set of posts on a porch or stairway. Bank  An institution that acts as a financial intermediary by receiving money from depositors and lenders and also lending to borrowers. Bank Holding Company  A company that owns or controls one or more banks or companies associated with banking such as leasing companies, credit companies, etc. It is usually identified by the word Bancorp or Bancshares in the name. The Federal Reserve Board of Governors regulates all bank holding companies. Bank Spread  The difference between the interest rate a bank charges a borrower and the interest rate a bank pays a depositor. Bank Wire  An electronic payment system for the transfer of money between banks. Bankruptcy   A proceeding in which an insolvent debtor can obtain relief from payment of certain obligations. Bankruptcies remain on a credit record for seven years and can severely limit a person's ability to borrow. Bankruptcy Trustee  A private individual or corporation appointed to undertake bankruptcy proceedings for a individual or corporation Bargain sale   The sale of a piece of property for less than market value. Baseboard   Any board or molding found at the bottom of an interior wall. Baseboard electric heat   Heating units installed in the floor that can be controlled by a central thermostat. Basement   The area of a home below ground level. Base Price  The cost of a car without options. This price includes standard equipment and the manufacturer's warranty Basis  Also referred to as cost basis, this is the amount assigned to an asset from which a taxpayer determines capital gain or loss. For assets purchased, the basis is the price paid. Special rules apply to assets acquired through gift or inheritance, as well as to the value of stock funds held for a period during which earnings are reinvested. Basis Point   A basis point is one one-hundredth of one percentage point. For example, the difference between a loan at 8.25 percent and a mortgage at 8.37 percent is 12 basis points. Bay   The opening between two columns or walls that forms a space. Bay window   A window that projects outward in a curve. Bearing wall   A wall that supports its own weight in addition to other parts of a structure. Bedroom Community  A suburb in which most residents commute to the city to work. Beneficiary   The lender who makes a loan, also called a mortgagee. The person borrowing money is the mortgagor. Before-tax income   Total income before taxes are deducted. Bequest   Personal property given to a person through a will. Betterment   An improvement that increases a property's value as opposed to repairs that maintain the value. Bidding war   Offers from multiple buyers for a piece of property. Agents also sometimes compete to list a house for sale. Bilateral contract   A contract in which the parties involved give mutual promises. Also called "reciprocal" contracts. Bill of sale A document that transfers ownership of personal property.  Bill Presentment  An online system that allows customers to receive and view the bill on a computer, and then pay the bill electronically. Users can pay their bills immediately and the money is transferred from the account. Billing Cycle  The number of days between the last statement date and the current statement date. Billing Statement  The monthly bill sent by a credit card issuer to the customer. It gives a summary of activity on an account, including balance, purchases, payments, credits and finance charges. Important changes to a credit card account are often included in small-print fliers that are sent with the statement Binder   An agreement to consider the purchase of real estate. The agreement is secured and backed by a cash deposit as evidence of good faith on the part of the purchaser. Biweekly mortgage   A mortgage that schedules payments every two weeks instead of the standard monthly payment. The 26 biweekly payments are each equal to one-half of the monthly payment. The result for the borrower is a substantial reduction in interest payments because the mortgage is paid off sooner. Blank Cheque  A cheque that does not have a dollar amount written on it. Blanket insurance policy   A policy that covers more than one person or piece of property. Blanket mortgage   A mortgage that covers more than one property owned by the same borrower. Blighted area   A neighborhood that has deteriorated. Blind nailing   Nails driven into a wall and concealed with putty. Blue Book  Formally, it refers to the Kelley Blue Book, an industry guide dealers use to estimate wholesale and retail vehicle pricing. In common parlance, "the blue book price" can actually refer to a price looked up in one of the many guides to pricing. The books now come in a variety of hues, are issued by many organizations, and are commonly available online or in the reference sections of public libraries. Blueprint   The drawing of a structure by an architect or designer, used for construction and getting permits. Blue-ribbon condition   A house maintained close to its original condition. Also called mint condition. Board-and-batten siding   Siding is composed of 8- to 12-inch wide wooden boards nailed vertically to create a barn-like exterior. Board foot   Measurement of lumber that is the equivalent of 144 cubic inches. Boilerplate   Form language used in deeds, mortgages and other documents. Details can be added by individual parties. Bona fide   A legal term that refers to actions or persons that are honest and in good faith. Bond   An agreement that insures one party against loss by acts or defaults of another party. Book value   The value of a property as a capital asset based on its cost plus any additions, minus depreciation. Boot  Cash or other property used in an exchange to make the values of property traded equal. For instance, if you trade in a delivery truck on a new model, the cash you pay in addition to your old truck is boot Boring test   An analysis of soil in which holes are bored into the ground and samples are removed. Borough   A section of a city that has authority over local matters. Borrow   Sand, gravel or other material used for grading. Borrow pit   The hole at a site that has been excavated. Boulevard   A street lined with trees or constructed with a landscaped median. Boundary   The dividing line between two adjacent properties. Braced framing   A construction method in two-story homes in which the frame is reinforced with posts and braces. Breach of contract   The failure to perform provisions of a contract without a legal excuse. Breach of covenant   The failure to obey a legal agreement. Breach of warranty   A seller's inability to pass clear title to a buyer. Break-even point   The point in which the owner's rental income matches expenses and debt. Breast height   The height at which the diameter of a tree is measured: four feet, six inches above the ground. Breezeway   A roofed passageway with open sides. Brick   Building material made from clay molded into oblong blocks and fired in a kiln. Bridge loan   A short-term loan for borrowers who need more time to find permanent financing. Brokerage   The act of bringing together two or more parties in exchange for a fee or commission. Broker   A person licensed by the province to deal in real estate. Broom clean   The ideal condition of a building when it is turned over to an owner or tenant. Brownstone   A vintage row house constructed of red sandstone. Buffer strip   A parcel of land that separates two or more properties. Building and loan association   An organization that raises money to helps its members purchase real estate or construct a building. Building code   A comprehensive set of laws that controls the construction or remodeling of a home or other structure. Building inspector   A city or county employee who enforces the building code and ensures that work is correctly performed. Building moratorium   A halt on home construction to slow the rate of development. Building paper   A thick, water-resistant paper that serves as insulation. Building permit   A permit issued by a local government agency that allows the construction of home or renovation of a house. Builder upgrades   Extra house features or better finishing materials that a builder offers. Building line or setback   Guidelines that limit how close an owner can build to the street or an adjacent property. Building restrictions   Regulations that limit the manner in which property can be used. Built-ins   Appliances or other items that are framed into a home or permanently attached. Bulkhead   A retaining wall designed to hold back water from the ocean or another body of water. Bull and Bear Markets  When stock prices are increasing and it’s a healthy market, this is known as a bull market. When stock prices are decreasing, it’s a bear market. Bundle of rights   The various interests or rights an owner has in a property. Bungalow   A small one-story house or cottage. Burden of Proof  The legal requirement to provide enough evidence to win a lawsuit. In civil cases, such as tax court, the burden is decided by the preponderance -- the most -- evidence. Except in cases of tax fraud, the burden of proof in a tax case generally is on the taxpayer. Business Bankruptcy  A bankruptcy case in which the debtor is a business or an individual involved in business and the debts are for business purposes. Business Interest Expense  Interest incurred in the operation of your business. It is deductible as a business expense Butterfly roof   A roof formed by two gables that dip in the middle to resemble a butterfly's wings. Buy-down mortgage   A home loan in which the lender receives a premium as an inducement to reduce the interest rate during the early years of the mortgage. Buy-down or Buydown  The process of trading money for a lower mortgage rate. The borrower "buys down" the interest rate on a mortgage by paying discount points up front. It can also be a mortgage in which an initial lump-sum payment is made to temporarily reduce a borrower's monthly payments during the first few years of a mortgage. Buyer broker   A real estate broker who exclusively represents the buyer's interests in a transaction and whose commission is paid by the buyer rather than the seller. Buyer's market   A slow real estate market in which buyers have the advantage. Buyer's remorse   An emotion felt by first-time homebuyers after signing a sales contract or closing the purchase of a house. Bylaws   The rules and regulations that a homeowners association or corporation adopts to govern activities. Call option   A clause in a loan agreement that allows a lender to ask for the balance at any time. Can lights   Cylindrical chambers with bulbs recessed into the ceiling. Canada Deposit Insurance Corporation (CDIC)  A crown corporation that provides deposit insurance against the loss of deposits made with member financial institutions. Canada Education Savings Grant  Program recently introduced by the federal government whereby it will invest, in the form of grants, along-side parents who save for their children's education through RESPs. The government will top up contributions made to an RESP by 20% up to a yearly maximum of $400 per beneficiary. Canada Savings Bonds (CSBs)  A secure way for Canadians to save. The bonds, which are a form of debt issued by the Canadian government, are cashable, with proper identification, at any time at most Canadian financial institutions Canadian Bankers Association (CBA)  Professional industry association that provides information, research, advocacy, education and operational support services primarily to the banking industry Canadian Depository for Securities Limited (CDS)  Agency responsible for the automatic processing and clearing of all securities transactions in Canada Canadian Payments Association (CPA)  This association, which is composed of several financial institutions and the Bank of Canada, operates a national clearing system for financial institution payments Cancellation clause   A clause that details the conditions under which each party may terminate the agreement. Cantilever   A projecting structure supported on one end, such as a balcony. Cap   A limit on the amount the interest rate or monthly payment can increase in an adjustable-rate mortgage. Cape Cod style   A wood-frame or shingled house with a steep roof and several windows projecting from the second floor. Capital   Money used to create income, such as funds invested in rental property. Capital Adequacy Ratio  A ratio of total capital divided by risk-weighted assets and risk-weighted off-balance sheet items. A bank is expected to meet a minimum capital ratio of 8.0% unless a higher ratio has been specifically prescribed by the Superintendent of Financial Institutions. Capital Asset  An item that you own for investment or personal purposes, such as stocks, bonds or stamp collections. When you sell a capital asset, depending on the price you earn a capital gain or a capital loss. Gains are taxed at a special rate, and losses can be used in many cases to reduce the amount that is taxed. See also "Capital Gain" or "Capital Loss." Capital expenditure   The cost of making improvements on a property. Capital gains   Profits an investor makes from the sale of real estate or investments. Capital gains tax   A tax placed on the profits from the sale of real estate or investments. Capital improvement   Any improvement that extends the life or increases the value of a piece of property. Capitalization   A mathematical formula that investors use to compute the value of a property based on net income. Capitalization rate   The percentage rate of return estimated from the net income of a piece of property. Caravan   A group of real estate agents who tour a house that has been recently listed for sale. Carport   A roof that covers a driveway or other parking area. Casement window   A window hinged on its sides to allow it to swing open vertically. Cash Advance Fee  A charge by the bank for using credit cards to obtain cash. This fee can be stated in terms of a flat per-transaction fee or a percentage of the amount of the cash advance. For example, the fee may be expressed as follows: "2% / $10". This means that the cash advance fee will be the greater of 2% of the cash advance amount or $10. The banks may limit the amount that can be charged to a specific dollar amount. Cash flow   The amount of cash a rental property investor receives after deducting operating expenses and loan payments from gross income. Cashier's check   A check the bank draws on itself rather than on a depositor's account. Cash-out refinance   The refinancing of a mortgage in which the money received from the new loan is greater than the amount due on the old loan. The borrower can use the extra funds in any manner. Cathedral ceiling   A high open ceiling formed by finishing exposed roof rafters. Caulk   An acrylic or silicon sealant used to fill cracks, crevices and holes in a home. Cavedium   A courtyard or atrium. Caveat   A formal notice, that asks a court to suspend action until the party which filed the challenge can be heard. Caveat emptor   A legal principle derived from Latin than means "let the buyer beware." Ceiling height   The standard height of a ceiling is eight feet. Central air conditioning   A device that generates cold air through an outside unit that is connected to ductwork inside the house. Central business district   The area of a city where most large businesses are located. Certificate of Deposit (CD)   A document which shows that the bearer has a specified amount of money on deposit with a bank, stock-brokerage firm or other financial institution. Certificate of occupancy   A document which states that a home or other building has met all building codes and is suitable for habitation. Certificate of sale   A document issued at a judicial sale, which entitles the buyer to receive a deed after court confirmation of the purchase of the property. Certificate of title   A written opinion on the status of a piece of property based on an examination of the public record. Chain of title   The official record that details the ownership history of a piece of property. Chair railing   Decorative trim installed on a wall about 32 inches above the floor, which protects against scuffs from furniture. Change order   A modification of the construction contract to authorize a change in the work, an adjustment in the amount of the contract or a change in the contract time. The owner, architect and contractor must sign the change. Change frequency   The adjustment schedule on an adjustable-rate mortgage. Chartered Banks  Financial institutions regulated under the Bank Act. Chartered banks are designated as Schedule I or Schedule II depending on their ownership. Chattel   Personal property such as furniture, clothing or a car. Chattel mortgage   A lien on personal property used as collateral for a loan. Chimney back   The back wall or lining of a fireplace or furnace chimney. Chimney flue   The passage inside a chimney that channels smoke and heat to the outside. Chimney pot   A short pipe at the top of a chimney that increases ventilation to the fireplace and reduces smoke. Cinder block   A block made of ash and cement that is used in construction. Cinder fill   Cinders used below a basement or around a foundation to promote drainage. Circuit breaker   An electric fuse that activates or deactivates a circuit. Cistern   A tank used to store rainwater. Classified property tax   A tax that varies in rate depending on the use of the property. Clear title   A property that does not have liens, defects or other legal encumbrances. Closed Mortgage  Closed mortgages involve a strict repayment schedule of a specific amount with optional limited lump sum payments and payment increases. Closing   The final procedure in which documents are signed and recorded, and the property is transferred. Closing costs   Expenses incidental to the sale of real estate, including loan, title and appraisal fees. Closing statement   A document which details the final financial settlement between a buyer and seller and the costs paid by each party. Cloud on title   An invalid encumbrance on real property. Cluster development   A method of squeezing more homes into less space. CMHC  The Canadian Mortgage and Housing Corporation: this is a Federally run institution that provides banks and lenders with mortgage insurance. Not to be confused with life or property insurance. In the event of default or foreclosure CMHC assumes responsibility of the property and reimburses the bank/lender the entire mortgage amount. This insurance is required generally when you have less than 25% equity or down payment. This insurance is paid by the property owner in advance but usually added to the mortgage amount. See also "G.E. Capital." Codicil   A change to a will that adds or subtracts provisions or clarifies portions of the document. Co-housing   Individual housing units that are clustered around a common building where residents share cooking and other activities. Coign   The cornerstone of a building that differs in shape or color from the rest of the wall. Co-insurance   Coverage that involves the use of two or more insurers.. Collar beam   The structural element that connects roof rafters. Collateral security   Additional security that a borrower supplies to obtain a loan. Collection   The series of steps a lender takes to bring a delinquent mortgage up to date. Collusion   The action of two or more people to break the law. Column   A slender upright structure that consists of a base, a round or square shaft and a capital. Column footing   The support base for a load-bearing column. The footing is usually made of reinforced concrete. Co-maker   A person who signs a promissory note with the borrower and assumes responsibility for the loan. Combination door   An outer door with interchangeable screen and glass panels. Combination window   A window with interchangeable screen and glass panels. Commercial bank   A financial institution that provides a broad range of services, from checking and savings accounts to business loans and credit cards. Commercial property   An area that is zoned for businesses. Commingling   The mixing of money held in trust with other funds. Commission   The negotiable percentage of the sales price of a home that is paid to the agents of the buyer and seller. Commitment   A promise by a lender to make a loan with specific terms for a specified period. Commitment fee   The fee a lender charges for promising to make a loan. Common area   An area inside a housing development that is owned by all residents. Common-area assessments   Fees paid by the owners of a condominium project or planned-unit development to maintain, repair, improve or operate common areas. Common-interest development   A project composed of individually owned units that share usage and financial responsibility for common areas. Common law   A body of laws based on custom, usage and rulings by courts in various jurisdictions. Community property   Property accumulated through the joint efforts of husband and wife. It is a classification of property peculiar to certain states. Commute   The distance and time it takes a person to reach the workplace. Comparables   Properties used as comparisons to determine the value of a certain property. Comparative market analysis   An estimate of the value of a property based on an analysis of sales of properties with similar characteristics. Competent   A term for a buyer who is legally fit to enter into a sales contract. Compound interest   The interest paid on the principal balance in a mortgage and on the accrued and unpaid interest of the loan. Concrete tilt-up   The process of pouring concrete into forms on the ground, allowing the forms to harden and then raising the material to a vertical position to form walls. Condemnation   The process the government uses to take private property for public use without the consent of the owner. Conditional commitment   A promise by a lender to make a loan if the borrower meets certain conditions. Condominium   Individual units in a building or development in which owners hold title to the interior space while common areas such as parking lots, community rooms and recreational areas are owned by all the residents. Condominium conversion   The change in title from a single owner of an entire project or building to multiple owners of individual units. Conduit   A metal pipe that houses electrical wiring. Consent judgment   A binding written agreement between two parties to have a judgment entered and recorded. Conservator   A court-appointed guardian. Consideration   Anything that is legal, has value and induces a person to enter into a contract. Construction budget   The funding that an owner arranges for the construction of a project. Construction documents   Drawings and specifications from an architect that provide detailed requirements for the construction of a project. Construction loan   Short-term loans a lender makes for the construction of homes and buildings. The lender disburses the funds in stages. Construction to permanent loan   The conversion of a construction loan to a longer-term traditional mortgage after construction has been completed. Consumer Credit Counseling Service  A service that offers counselling about how to work out a realistic budget and debt repayment plan and work with creditors. The goal is to ensure that debts are paid back over time. Consumer Price Index  An index that measures movements in the average price of products and services typically consumed by Canadian families. Contemporary style   A design that features streamlined shapes, large unadorned windows and industrial materials. Contiguous lots   Pieces of property that are adjoined. Contingency   A condition specified in a purchase contract, such as a satisfactory home inspection. Contingency listing   A property listing with a special condition attached. Contingent fee   A fee that must be paid if a certain event occurs. Contract   An agreement between two or more parties that creates or modifies an existing relationship. Contract for deed   A contract in which the seller agrees to defer all or part of the purchase price for a specified period of time. Contract to purchase   A contract the buyer initiates which details the purchase price and conditions of the transaction and is accepted by the seller. Also known as an agreement of sale. Contractor   The individual who contracts for the construction of a home or project. Contractual lien   A voluntary obligation such as a mortgage or trust deed. Controlled growth   Any restrictions imposed on the amount or type of new development in an area. Conventional loan   A long-term loan a lender makes for the purchase of a home. Convertible adjustable-rate mortgage   A mortgage which starts as an adjustable-rate loan, but allows the borrower to convert the loan to a fixed-rate mortgage during a specified period of time. Conveyance   The transfer of title of property. Conveyance tax   A tax imposed on the transfer of real property. Cooperating broker   A real estate broker who finds a buyer for a property that another broker has listed. Cooperative corporation   A business trust that holds the title to a cooperative residential building and grants occupancy rights to shareholders in the corporation. Cooperative mortgages   Any loans related to a cooperative residential project. Cooperative project   A project in which a corporation holds title and sells shares representing individual units to buyers who then receive a proprietary lease as their title. Cornice   A horizontal molding that projects from the top of a structure or wall. Corporate relocation   An arrangement by which employers pay to transfer and move employees. Co-signer   A second party who signs a promissory note and takes responsibility for the debt. Counteroffer   A response to an offer. Corner bead   A reinforcement placed in the corner where two walls intersect. Corner influence   The effect on the value of a property because it is situated on a corner or near a corner. Corrective work   Necessary or desired repairs to remedy problems uncovered by a home or specialized inspection. Cost-plus contract   A construction contract that determines the builder's profit based on a percentage of the cost of labor and materials. Cottage   A small, one-story house. Covenant   A legal assurance or promise in a deed or other document, or implied by the law. Covenants, conditions and restrictions (CC&Rs)   Rules and regulations for a development, such as acceptable landscaping or improvements that can be made to individual units. Craftsman style   An architectural style that evolved as part of the Arts and Craft movement near the turn of the century. Crawl space   The space between the ground and the first floor of a home, usually no higher than four feet. Creative financing   Innovative home-financing arrangements that help sell a property. Credit   The money a lender extends to a buyer for a commitment to repay the loan within a certain time frame. Credit Bureau   Large companies that gather financial and credit information from various sources about individuals who have applied for credit. Credit history   A record of an individual's current and past debt payments. Creditor   An individual or institution to whom a debt is owed. Credit life insurance   Insurance that pays off a mortgage in the event of the borrower's death. Credit rating   The degree of credit worthiness assigned to a person based on credit history and financial status. Credit report   A credit bureau report that shows a loan applicant's history of payments made on previous debts. Credit union   Nonprofit cooperative organizations that provide banking and financial services, including mortgages, home improvement loans and home equity loans, to their members. Cross-bridging   The strengthening of a structure by bracing cross members between beams. Cul de sac   A street or alley that is closed at one end. Cupola   A dome-like structure that sits on top of a roof. Curable defect   A deficiency in a property that is easy or inexpensive to fix, such as chipping paint. Curb appeal   The first impression of a house as seen from the street. Curtain wall   An exterior wall that encloses a yard or other area but does not provide any structural support to a home. Custom builder   A builder who constructs a home or building based on plans created by the owner. Custom home   A structure designed by an architect hired by the owner. Damper   A movable plate in a fireplace that allows smoke and fumes to travel up the chimney's flue. Days on the market   The period of time a property is listed for sale until it is sold or taken off the market Deadbolt lock   Locks that require a key to open from the outside and a turn button from the inside. Debt   Any amount one person owes to another. Deck   A roofless, floored area that adjoins a house. Deed   The legal document that transfers ownership of a piece of property. Deed of trust   A document that gives a lender the right to foreclose on a piece of property if the borrower defaults on the loan. Deep-seal floor drain   A drain used to dispose of water from the basement floor to a sewer line. Default   The failure to fulfill a duty or promise or discharge an obligation, such as making monthly mortgage payments. Deferred maintenance   Any repair or maintenance of a piece of property that has been postponed, resulting in a decline in property value. Delinquent mortgage   A mortgage that involves a borrower who is behind on payments. If the borrower cannot bring the payments up to date within a specified number of days, the lender may begin foreclosure proceedings. Density test   An analysis of soil to determine if the surface can support the foundation of a house. Dentils   Small rectangular blocks that project from a building, usually under cornices or along rooflines. Deposit   Money given by the buyer with an offer to purchase property. Also called earnest money. Depreciation   The decline in value of a piece of property. Design/build   A project in which the owner contracts directly with an individual or company to perform design and construction. Designer   Unlike architects, designers are limited to drawing blueprints. Digital images   Images that are incorporated into house listings to give potential buyers a view of the property. Dimension plans   Plans which show the layout of a house but are less detailed than full blueprints. Disability insurance   An insurance policy which covers an individual's ability to produce income. Disclosure   A statement to a potential buyer listing information relevant to a piece of property, such as the presence of radon or lead paint. Discount points   Fees that a borrower pays at the time the lender makes the loan. A point equals 1 percent of the total loan amount. Distressed property   Property that is in poor physical or financial condition. Document needs list   A list of documents a lender requires when a potential submits a loan application.. The required documents range from paycheck stubs to credit card statements. Domed ceiling   A hemispherical ceiling that projects upward without support. Domicile   A person's primary or permanent home. Domestic Banks  Banks owned by Canadians. Canada has nine domestic banks, of which seven are Schedule I banks Dormer   A window set upright in a sloping roof. Double-hung window   A window that consists of two sashes that slide up and down. Dovetail joints   Joints that lock two pieces of wood together with meshed teeth. Down payment   The amount of money a buyer agrees to give the seller when a sales agreement is signed. Complete financing is later secured with a lender. Down spouts   A vertical gutter that empties water from the roof to the ground. Drainage   A system of gutters and drainpipes that carry water away from the foundation of a house. Draw   A payment made to subcontractors or suppliers from a construction loan. Dropped ceiling   A flat ceiling built lower than the original ceiling. Dry rot   A fungal decay that causes wood to become brittle and crumble. Drywall   A construction material composed of gypsum or plaster wrapped in paper and produced in large sheets that can be nailed to wall studs. Dual agency   A relationship in which a real estate agent or broker represents both parties in a transaction. Duct   Any kind of pipe or channel that carries water, wiring or conditioned air through a house. Due-on-sale clause   Standard language in a mortgage which states that the loan must be paid when a house is sold. Duplex   A structure that consists of two separate family units. Dutch colonial style   A design that features barn-like gambrel roof, a ground-level front porch, and dormers. Early occupancy   The condition in which buyers can occupy the property before the sale is completed. Earnest money   Money a buyer gives with an offer to purchase a property. Also called a deposit. Earthquake insurance   A policy that provides coverage against damage to a home from an earthquake. Easement   A right given to a third party to use a portion of the property for certain purposes, such as power lines or water mains. Eaves   The projecting overhang at the lower edge of a roof. Effective age   The age of a structure estimated by its condition rather than its actual age. Effective gross income   Additional income that a lender considers when assessing the loan application of a potential borrower. Electric service panel   A panel that transfers power from the utility line into a house to be distributed through fuses or circuit breakers. Elevations   The exterior view of a home design that shows the position of the house relative to the grade of the land. Ell   An extension or wing of a house that is at right angles to the main structure. Eminent domain   The government's right to condemn private land for public use, such as the routing of a public highway. Employer-assisted housing   Programs which help employees purchase homes through special plans developed with lenders. Employment Equity Act  A federal statute that requires employers with 100 or more employees to eliminate any practices in the workplace discriminating against four designated groups of people who have historically been disadvantaged in the labour market: women; people who, by reason of race or colour, are members of visible minority groups; aboriginal peoples; and persons with disabilities Empty nesters   Potential buyers who have raised their families and want to move into a smaller home. Encroachment   Fences or other structures that extend into the property of another owner. Encumbrance   A claim or lien on a property which complicates the title process. End loan   The conversion from a construction loan to permanent financing a condominium buyer secures after all units in a project have been completed. Endorser   A person who signs over ownership of property to another party. English Tudor style   An architectural design that features stone or brick exterior walls and exposed beams. Environmental impact statement   A government-mandated evaluation of all aspects and effects a development will have on the environment of a proposed site. Environmentally friendly home construction   A method of construction that utilizes recycled materials. Equifax   One of the major credit bureau companies in Canada along with Trans Union. Equity   A determination of the value of a property after existing liens are deducted. Errors and omissions insurance   A policy that pays for any mistakes a builder or architect makes in a project. Escrow   A neutral third party holds the documents and money involved in a real estate transaction and ensures that all conditions of a sale are met.. Escrow also refers to a special account that a lender establishes to hold monthly installments from the borrower to cover property taxes and insurance. Escrow account   An account that a lender or mortgage servicer establishes to hold funds for the payment of expenses such as homeowners insurance and property taxes. Also known as an impound account. Escrow agent   A neutral third party who ensures that all conditions of a real estate transaction are met. Estate   The total assets of a person, including real property, at the time of death. Eviction   A legal procedure to remove a tenant for reasons including failure to pay rent. Examination of title   An inspection by a title company of public records and other documents to determine the chain of ownership of a property. Excavation   The process of clearing trees, removing topsoil and grading land before the foundation is laid. Exclusive listing   A contract that gives an agent the exclusive right to market a property for a specific period of time. Executor   A person appointed to carry out the instructions in a will. If there is no will, a probate court will appoint an executor. Exhaust fan   Ventilating devices that remove water vapor, undesired smells or smoke. Facade   The part of a building facing the street or a courtyard. Fascia   A board that connects the ends of the roof rafters and provides a surface to support gutters. Fee simple   This type of ownership is the maximum interest a person can have in a piece of real estate. It entitles the owner to use the property in any manner they see fit, in accordance with state and local laws. Fee simple defeasible   The owner of the property holds a fee simple title contingent upon certain conditions. Federal style   The all-American home architecture style that evolved after the Revolutionary War. Details include bigger windows and a front doorway surrounded by glass and topped with an arched window. Feng shui   An ancient Chinese belief that the physical characteristics of a house and the positioning of the home will affect the fortunes of the owner. Fiduciary duty   The relationship of trust that buyers and sellers expect from a real estate agent. The term also applies to legal and business relationships. Field changes   Modifications made on the construction site that do not match blueprints. Fill dirt   Soil brought in to solidify a finished foundation. Filled land   An area where the ground has been raised by adding dirt, gravel or other fill material. Finance Canada  Federal department responsible for Canada's economic performance and regulation of financial institutions. Finder's fee   A fee in any amount that is paid to someone. Finish grade   A finish that prepares a lot for landscaping. Fire wall   A buffer composed of fire-resistant material. Firm commitment   A promise made by a lender when it agrees to loan money for the purchase of property. First mortgage   The primary mortgage on a property that has priority over all other voluntary liens. Fixed installment   The monthly payment on a home loan. Fixed-rate mortgage   A home loan with an interest rate that will remain at a specific rate for the term of the loan. About 75 percent of all home mortgages have fixed rates. Fixed time   The specific weeks in a year an owner of a timeshare arrangement has access to accommodations. Fixer-upper   A house that needs refurbishment or remodeling It usually sells at a below-market price. Fixture   Personal property permanently attached to a house, such as drapery rods, toilets, built-in bookcases or a furnace. Flashing   Metal strips placed around chimneys, skylights, vents, windows, doors, beneath shingles and along seams in the roof to prevent water seepage. Flat fee   A set fee charged by a broker instead of a commission. Flat roof   A roof with a level surface. Floor area ratio   The calculation of the floor area of all homes or buildings in a project. It is used in the planning and development of a site. Float floor drain   A drain that diverts water from the basement to a collection area. Water is then removed with a sump pump. Floating wall   Walls built to withstand movement in the basement floor. Flood insurance   Hazard coverage that is required in designated flood areas. Flood plain   Flat, flood-prone areas located along waterways. Florida rooms   Enclosed porches built on the side or back of a home. Footings   Concrete foundations that support a structure. Forbearance   A course of action a lender may pursue to delay foreclosure or legal action against a delinquent borrower. Foreclosure   The legal process reserved by a lender to terminate the borrower's interest in a property after a loan has been defaulted. When the process is completed, the lender may sell the property and keep the proceeds to satisfy its mortgage and any legal costs. Any excess proceeds may be used to satisfy other liens or be returned to the borrower. Forfeiture   The relinquishing of property rights by a delinquent borrower. For Sale By Owner (FSBO)   The owner acts as the agent to avoid paying a sales commission. Foundation   The support structure of a house. 401(k) plans   Financial plans that allow employees to set aside tax-deferred income for retirement or emergency purposes. Foyer   The entrance hall to a home or building. Framing   The construction of the skeletal framework of a house. Free-market lots   Owners of these types of lots may hire any builder to construct their home. French doors   Two adjoining doors inlaid with glass that open from the middle. Frontage   The portion of property that borders a roadway or body of water. Fully amortized adjustable-rate mortgage   A mortgage that amortizes, or pays down, the balance of a loan. Furnace   An enclosed heating device powered by coal, oil, propane or natural gas. Fuse   A device that allows power to be channeled into a home. Gable   A triangular wall enclosed by the sloping ends of a ridged roof or a triangular decorative feature. Gable roof   A ridged roof that forms a triangle at each end. Gag rules   A provision in contracts signed by new buyers that prohibits the owners from publicizing complaints about the builder. Gambrel roof   A roof with two slopes, often seen on barns. GE Capital  GE Capital is the new CMHC alternative in the Canadian Mortgage Market place. GE Capital like CMHC provides banks/lenders with mortgage insurance. Not to be confused with life or property insurance. In the event of default or foreclosure GE Capital assumes responsibility of the property and reimburses the bank/lender the entire mortgage amount. This insurance is required generally when you have less than 25% equity or down payment. This insurance is paid by the property owner in advance but usually added to the mortgage amount. See also "CMHC." General contractor   The person who hires all of the subcontractors and suppliers for a project. General plan   A government's long-range land-use plan. Georgian style   Popular throughout the 18th century, this type of architecture is distinguished by a symmetrical facade, prominent front entrance and quoins-decorative blocks of masonry or wood set in the corners of the house. Geodesic dome   A structure constructed of lightweight bars forming a grid of polygons. Gift   A cash gift a buyer receives from a relative or other source. Lenders usually require a "gift letter" stating that the money will not have to be repaid. Gingerbread decoration   An intricate, almost lacy, wood trim. Girders   Crossbeams that support floor joists. Good-faith estimate   An estimate from an institutional lender that shows the costs a borrower will incur, including loan-processing charges and inspection fees. Grace period   A specified amount of time to make a loan payment after its due date without penalty. Grade   The elevation of land above level ground. Graduated-payment mortgage (GPM)   A mortgage that requires a borrower to make larger monthly payments over the term of the loan. The payment is unusually low for the first few years but gradually rises until year three or five, then remains fixed. Grade level   The flat or sloping surface upon which a house is built. Granny flat   Slang term for a separate unit in a house or above the garage, which in the past may have been occupied by an elderly relative. Grantee   A person conveyed an interest in a piece of property. Grantor   The person who conveys an interest in a piece of property to another person. Greek Revival style   A style introduced in the U.S. at the end of the 18th century. Its most prominent feature is a pillar-anchored pediment forming a portico in the front of the house. Greenbelt   Any stretch of park, open space or other natural setting in a community. Gross Debt Ratio  The ratio of the monthly housing payment in total (PIT -- Principal, Interest and Taxes) divided by the gross monthly income. This ratio is sometimes referred to as GDS. Gross Domestic Product  The total value of all the goods and services produced by the Canadian economy in a single year. Gross National Product  The value of all goods and services accruing to Canadians in a given year. It equals Gross Domestic Product, plus income of Canadians from foreign production, less income from Canadian production earned by non-residents (such as interest and dividends paid to foreign lenders). Gross income   The total income of a household before taxes or expenses are subtracted. Ground fault circuit interrupter   Devices that detect leakage of electrical current to the ground and prevent accidental shock. Ground rent   The amount of money paid for the use of a piece of property when it is a leasehold estate. Group home   A single-family residence used as a living space for unrelated, developmentally disabled or mentally disabled people. Growing-equity mortgage   A fixed rate mortgage that increases payments over a specific period of time. The extra funds are applied to the principal. Guarantee mortgage   A loan guaranteed by a third party, such as a government institution. Gutters   Horizontal channels installed at the edge of a roof to carry rainwater or melted snow away from the house. Half-bath   Also called a powder room, a half-bath contains a toilet and a sink but no bathtub or shower stall. Hazard insurance   This provision of homeowners insurance covers damage by fire, wind or other disaster. It is required by all lenders before a loan is approved. Header   Crossbeams above windows and doors. Heat pump   An electric cooling and heating system. Hectare   The equivalent of 2.471 acres. High density   The concentration of housing units in a specific area or on a specific property. High-rise   Any building higher than six stories. Hip roof   A pitched roof with sloping sides. Historic preservation   A movement to protect buildings with historic value from destruction or extensive renovation. Historic structure   A building recognized by the Canadian Government as a historical building and is registered Home equity conversion mortgage   Loans made to older owners who want to convert equity into money. Because borrowers are qualified on the basis of the value of their home, e, the loan is not the same as a home equity loan. Also known as reverse mortgages. Home equity loan   A loan that allows owners to borrow against the equity in their homes. Home inspection   An examination of a home's construction, condition and internal systems by an inspector or contractor prior to purchase. Homeowners' association   A group that governs a modern subdivision or planned community. An association collects monthly fees from all owners to pay for maintenance of common areas, handle legal and safety issues, and enforce the covenants, conditions and restrictions set by the developer. Homeowners' insurance   This insurance includes hazard coverage for any damages that may affect the value of a house, in addition to personal liability and theft coverage. Homeowners' warranty   Special insurance policies that cover certain home repairs for a specified amount of time. Home rule   The power of a local government to adopt its own land-use regulations. Homesteading   A document that to protects some of a home's equity from lawsuits. Home warranty   A type of insurance that covers repairs to certain parts of a house and some fixtures. Hopper window   A window that contains a single sash that tilts inward. Hose bibb   A threaded faucet connection for devices such as a washing machine. Housing discrimination   The illegal practice of denying an individual or group the right to buy or rent a home based on race, color, religion, national origin, sex, disability or family status. Housing expense ratio   The percentage of gross monthly income devoted to housing costs. House wrap   A polyethylene barrier wrapped around a house to save energy. Illegal View (Quebec)  The existence of any exterior openings in a building which creates an illegal view of adjoining lands Impact fees   Fees collected from developers of new homes to pay for schools, parks and other facilities. Implied warranty of habitability   Court cases which determined that all new homes are assumed to be fit for human habitation and meet all building codes. Impounds   A portion of the monthly mortgage payment that is placed in an account and used to pay for hazard insurance, property taxes and private mortgage insurance. Income property   Property that is not occupied by the owner but is used to generate income. Incurable defect   A defect in a property that cannot be fixed, such as an adjacent hazardous waste site, or that would cost too much to repair relative to the value of the property. Index   Financial tables used by lenders to calculate interest rates on adjustable mortgages and on Treasury bills. Individual Retirement Account   Tax-deferred savings accounts that allow people to accrue retirement funds. In-file credit report   Computer-generated reports drawn from credit repositories that are generally regarded as objective histories. Infill development   Any significant new construction in an established area. Infill housing   Home construction in established areas. Inflation   This event occurs when there is more money available than there are goods and services to be purchased. Mortgage rates, which are determined by the marketplace and the actions of the Federal Reserve Board and Wall Street, are sensitive to inflation fears. Infrastructure   The roads, schools, parks, utilities, bridges and communications systems in a community. Initial interest rate   The original interest rate on an adjustable mortgage. Inspection report   An examination of a home's exterior, foundation, framing, plumbing, electrical system, heating, air conditioning, fireplace, kitchen, bathroom, roofing and interior. Installment contract   A purchase agreement in which the buyer does not receive title to the property until all installments are paid. Institute of Canadian Bankers (ICB)  Educational institute that provides career-oriented education and training programs to financial-services professionals Insulation   Materials including cellulose, glass fiber, rock wool, polystyrene, urethane foam and vermiculite that slow heat loss. Insurable title   Title to property that a company agrees to insure against defects and disputes. Insurance   Owners and buyers can purchase various types of insurance: hazard, private mortgage and earthquake. The policies guarantee compensation for specific losses. Insurance binder   A temporary insurance arrangement usually put in force until a permanent policy can be obtained. Interac  Canada's largest shared network of ATMs. It allows cardholders to access their accounts from any ATM on the network regardless of which financial institution owns the machine Interest   The fee borrowers pay to obtain a loan. It is calculated based on a percentage of the total loan. Interest accrual rate   The rate at which interest accrues on a mortgage. Interest-only loan   The pays only the interest that accrues on the loan balance each month. Because each payment goes toward interest, the outstanding balance of the loan does not decline with each payment. Interest rate   The sum, expressed as a percentage, charged for a loan. Interest payments on most home loans are tax- deductible. Interest rate buy-down plans   For cash-short buyers, some sellers are willing to advance funds from the sale of the home to buy down the interest rate and reduce the buyer's monthly obligation. Interest rate caps   A limit on the amount that can be charged to the monthly payment of an adjustable-rate mortgage during an adjustment period. Interest rate ceiling   The highest interest a lender can charge for an adjustable-rate mortgage. Investment property   Real estate that generates income, such as an apartment building or a rental house. Jalousie window   A window that consists of vertical rows of horizontal glass slats that operate together by a crank mechanism that connects all the slats. Joint liability   The responsibility of two or more people to fulfill the terms of a home loan or debt. Joint tenancy   Ownership by two or more people that gives equal shares of a piece of property. Rights pass to the surviving owner or owners. Joist   A floor or ceiling support member supported by foundation walls, piers or beams. Subflooring is connected to floor joists. Judgment   The decision of a court or law. If a court decides that a person must repay a debt, a lien may be placed against that person's property. Judicial foreclosure   A procedure to handle foreclosure proceedings as civil matters. Junior mortgage   A loan that subordinate to the primary loan. Kit home   A structure that contains prefabricated components and is put together by a contractor. Knee wall   A wall-like structure that supports roof rafters. Knob-and-tube wiring   An old-fashioned wiring system that has been replaced by fuses and circuit breakers. Landscape   A home's surroundings can range from a shrub-studded emerald lawn to a native-plant xeriscape. It is a major component of curb appeal. Landscape architect   A professional who holds a degree in landscape architecture, which involves training in horticulture, landscape design and planning. Landscape designer   A landscape designer has training in horticulture and landscape planning, but does not necessarily hold a degree. Landscape contractor   A professional who carries out the plans of a landscape architect or a landscape designer. Late charge   A fee a lender imposes on a borrower when the borrower does not make a payment on time. Late payment   A payment a lender receives after the due date has passed. Latent defect   An invisible problem in a piece of property such as bad wiring, termite damage or lead paint. Lead   A metallic chemical element present in older dwellings, primarily in the form of lead-based paint and lead plumbing. Exposure to lead has been found to be a health risk. Lease   A binding agreement that contains the terms and conditions of a renter's occupancy. Leasehold estate   An arrangement in which the borrower does not own a specific piece of property but possesses a long-term lease. Lease option   A lease that contains the right to purchase the property for a specific price within a certain time frame. Lender   A bank, savings institution or mortgage company that offers home loans. Legal blemish   Blemishes on a piece of property, such as a zoning violation or fraudulent title claim. Legal description   A specific way of identifying and locating a piece of real estate that is acceptable to a court. Letter of intent   A formal statement that the buyer intends to purchase the property for a certain price on a certain date. Leverage   The use of a small amount of cash--a 5 percent or 10 percent down payment--to buy a piece of property. Liabilities   A borrower's debts and financial obligations. Liability insurance   A policy that protects owners against any claims of negligence, personal injury or property damage. Lien   A claim laid by one person or company on the property of another as security for money owed. Life cap   A limit on the amount that a loan rate can move during the term of the mortgage. For example, the rate on an adjustable-rate mortgage that begins at 5 percent and has a lifetime cap of 6 percentage points cannot rise above 11 percent, even if rates on fixed-rate mortgages soar to 20 percent. Life-cycle cost analysis   An analysis of a building project's expected operating, maintenance and replacement costs, calculated by an architect. Limited partnership   Real estate syndicates and other investment groups use this type of ownership.. A general partner makes the group's investment decisions, oversees the investment and is principally liable for any losses. Lintel   A horizontal piece over a door or window that carries the weight of the structure above it. Liquid assets   Cash and all other assets that can be converted to cash relatively quickly. Liquid assets can include money in savings and checking accounts, money-market accounts, and most certificates of deposit. Liquidated damages   When a real estate deal goes awry, one party often is entitled to liquidated damages, a sum of money set out in the purchase contract in that event. Listing   A piece of property placed on the market by a listing agent. Listing inventories   The known number of houses for sale within a given market. Live-in partnership   An arrangement in which two unrelated people purchase a home. Live-work space   An officially designated dwelling in which the occupant conducts a home-based business or enterprise. Load-bearing wall   A wall that supports not only its own weight, but the weight of other parts of a home. Also called a bearing wall. Loan application   The first step toward submitting a home loan requires the borrower to itemize basic financial information. Loan application fee   A fee charged by lenders to for making a loan application. Loan commitment   A promise by a lender or other financial institution to make or insure a loan for a specified amount and on specific terms. Loan officer   An official representative of a lending institution who is empowered to act on behalf of the lender within certain limits. Loan origination fee   Most lenders charge borrowers an origination fee--or points--for processing a loan. A point is 1 percent of the total loan amount. Loan processing fee   A fee charged by some lenders for gathering information to enable the lender to process the loan. Loan term   The amount of a time set by the lender for a buyer to pay a mortgage. Most conventional loans have 30-year or 15-year terms. Loan -to-value ratio   A technical measure used by lenders to assess the relationship of the loan amount to the value of the property Local Improvement Charge  A fixed annual charge levied against specific real property for a specific period by a municipality which amortizes the capital costs of local improvements such as sewers, paved roads, etc. This charge is in addition to real estate taxes. Local Taxes  In addition to federal and provincial taxes, those taxes imposed by local municipalities (such as a city or a county) for its government services. Lock-in   When interest rates are volatile, many borrowers want to "lock in" an interest rate and many lenders will oblige, setting a limit on the amount of time the lock-in is in effect. Loft   A living space not partitioned into rooms or a small space built above a larger room. Log cabin   Homes constructed of rough-hewn timbers and a standard housing form in the early European settlement of the U.S. Low-ball offer   An offer made to a seller that is substantially below market value. The longer a property stays on the market, the more likely there are to be such offers. Low density   A low concentration of housing units in a specific area. Low-documentation loan   A mortgage that requires only minimal verification of income and assets. Low-down-payment loan   A home loan that requires the borrower to make only a small down payment before obtaining the financing needed to purchase a house. Main water shut-off valve   The primary valve that halts the flow of water from the water meter into a home. Mansard roof   A roof with four sides that slope upward from the roof edge to the square peak. Manufactured housing   Prefabricated homes that can range from simple trailers to larger dwellings. Mantel   The facing of stone, marble or other material around a fireplace. Maintenance fee   The monthly assessment members of a homeowners' association pay for the repair and maintenance of common areas. Managed-competition lots   Lots in which buyers choose between one of several builders. Margin   The lender's "retail markup" on the mortgage. For example, if the index rate for an adjustable-rate mortgage is 5 percent but the lender has a 2.5 percentage-point margin, the rate the borrower will pay is 7.5 percent. Market conditions   Factors affecting the sale and purchase of homes at a particular point in time. Market value   The price that a piece of property sells for at a particular point in time. Masonry   The brick or stone work on a building. Master-planned community   A suburban plan that includes homes and commercial, work, educational and community facilities. Maximum financing   A loan amount within 5 percent of the highest loan-to-value ratio allowed for a property. Mechanical systems   A home's plumbing, wiring, heating and cooling systems. Mechanic's lien   Subcontractors or suppliers sometimes will file an encumbrance, or mechanic's lien, against a property to seek payment. Mediation   A dispute-resolution process in which a neutral party works to resolve contract differences. Median price   The price of the house that falls in the middle of the total number of homes for sale in that area. Merged credit report   A report that draws information from the Big Three credit-reporting companies Metes and bounds   A time-honored land surveying method of describing land in terms of shape and boundary dimensions. Mill Rate  In reference to property taxes, a unit of taxation is a set ratio made by the city or municipal district. Mint condition   Mint condition, or blue-ribbon condition, refers to a house that looks as close to new as possible. Mixed-income housing   A neighborhood that contains houses of widely varying prices. Mixed-use development   A project that combines several different functions, such as residential space above a commercial establishment or an entire development combining commercial, residential and public accommodations. Modification   A change in any of the terms of the loan agreement. Molding   Decorative trim elements applied to walls, ceilings, and window and door openings. Money Laundering  Popular term used to describe the process whereby criminals conceal illicitly acquired funds by converting them into seemingly legitimate income. While the term refers to the proceeds of organized crime generally, it is now most often associated with financial activities of drug dealers who seek to launder the large amounts of cash generated from the sale of narcotics. Money market account   Accounts that work like money market funds and allow individual investors to participate in certain managed investments and withdraw funds under most conditions. Money market funds   A mutual fund that pools the resources of individuals to invest in certain managed investments. Mortgage   A legal document specifying a certain amount of money to purchase a home at a certain interest rate, and using the property as collateral. Mortgagee   A bank or other financial institution that lends money to the borrower. The borrower is considered the mortgagor. Mortgagor   The person who borrows money to purchase a house. The lender is called the mortgagee. Mortgage acceleration clause   A clause which allows a lender to demand that the entire balance of the loan be repaid in a lump sum under certain circumstances. The acceleration clause is usually triggered if the home is sold, title to the property is changed, the loan is refinanced or the borrower defaults on a scheduled payment. Mortgage banker   A company that provides home loans using its own money. The loans are usually sold to investors such as insurance companies and Fannie Mae. Mortgage broker   A company that matches lenders with prospective borrowers who meet the lender's criteria. The mortgage broker does not make the loan, but receives payment from the lender for services. Mortgage insurance   Required by lenders in some loans to protect them from a possible default . All conventional loans with less than a 20 percent down payments require private mortgage insurance, or PMI. Mortgage life insurance   A special type of insurance that will pay off a mortgage if the borrower dies before the debt is retired. Motivated buyer   Any buyer with a strong incentive to make a purchase. Motivated seller   Any seller with a strong incentive to make a deal. Move-in condition   A house that is ready for a new occupant. Move-up buyer   A buyer who has purchased a home before and is looking for a bigger or more expensive home. Mullion   A vertical dividing bar between window lights or panels. Multidwelling property   A property that contains individual units for several households but carries only one mortgage. Multifamily mortgage   A mortgage on a multifamily dwelling with more than four families, typically an apartment building. Multiple listing service (MLS)   The service combines the listings for all available homes in an area, except For-Sale-By-Owner (FSBO) properties, in one directory or database. Multiple offers   Multiple purchase offers occur in hot markets or hot neighborhoods. Municipal housing inspector   Inspectors employed by cities or counties to check all construction sites and verify that contractors are meeting building codes. Nail pops   Nails in load-bearing parts of new homes that pop out slightly because of settling of the structure. Needs-based pricing   A seller's asking price that is based on factors such as the required funds to pay off the mortgage, the cost of remodeling or the purchase of another house. Negative amortization   The situation occurs when a borrower's monthly payment is not large enough to cover both the principal and interest of a loan. As a result, the outstanding balance of the loan actually grows larger with each payment rather than smaller. Most fixed-rate loans are not subject to negative amortization, but many adjustable-rate mortgages are susceptible. Negative-slope driveway   A driveway that drops from street level to the garage. Neo-traditional planning   Planning of a community that favors the return of new-home development with such traditional features as grid-street patterns, prominent front porches, backyard garages, multi-use buildings and housing clustered near commercial service areas. Net cash flow   Investment property that generates income after expenses such as principal, interest, taxes and insurance are subtracted. Net worth   The worth of a person or company based on the difference between total assets and liabilities. New Urbanism   A community design philosophy that favors the return of new-home development with such traditional features as prominent front porches, backyard garages, multi-use buildings and housing clustered near commercial service areas. Niche   A small recessed area in a wall, traditionally arched at the top. NIMBY (Not In My Back Yard)   The response sometimes given by neighborhoods and communities to proposed changes or development. No cash-out refinance   The amount of the new mortgage covers the remaining balance of the first loan, closing costs, any liens and cash no more than 1 percent of the principal on the new loan. No-competition lots   A lot in which the buyer's home will be constructed by a particular builder. No-documentation loan   A loan application that does not require verification of income but typically is granted in cases of large down payments. Non-assumption clause   A loan provision that prohibits the transfer of a mortgage to another borrower without lender approval. Non-liquid asset   An asset such as a house that is not easily turned into cash. Non-recurring closing costs   Costs that are one-time only fees for such items as an appraisal, loan points, credit report, title insurance and a home inspection. Non-resident Alien  A person who is not a permanent resident or a citizen of Canada, and who is generally taxed on income from Canadian resources. North American Free Trade Agreement (NAFTA)  An agreement among the United States, Canada and Mexico that will allow for freer trade between the three countries Note   The legal document that requires a borrower to repay a mortgage at a certain interest rate over a specified period of time. Note rate   The interest rate specified in a mortgage note. Notice of default   A lender's initial action when a mortgage payment is late and attempts to reconcile the issue out of court have failed. Online real estate listings   Properties listed for sale on the Internet. Open house   A marketing tool in which a listing agent opens a house for view. Open listing   A property given to a number of brokers to market at the same time. Open space   Undeveloped land or common areas in a planned community reserved for parks, walking paths or other natural uses. Option   A situation in which a buyer puts down money for the right to purchase a piece of real estate within a set time period but does not have an obligation to buy. Oral agreement   Contractual arrangements that are not in writing and are usually not legally binding. Original principal balance   The amount of principal owed on a loan before a borrower makes any payments. Origination fee   A fee charged by most lenders--also called points--for processing a loan. A point is 1 percent of the total loan amount. Overhang   A protruding structural feature. Owner financing   A transaction in which the seller of a property agrees to finance all or part of the purchase. Parcel   An officially described piece of land. Partition   An interior wall. Partnership   There are several partnership options for unmarried individuals to buy a piece of property, such as live-in partnerships (in which both buyers share the residence) or a shared-equity partnership (in which one buyer lives in the home and the other is an investor in the property). Passive loss   A tax term that refers to any loss from a passive activity, such as the ownership but not the operation of a piece of rental real estate. Passive solar system   A system that supplies solar heat without the use of electric fans or pumps. Patent defect   A visible deficiency in a piece of property, such as a cracked basement slab or a sagging porch. Payment cap   A legal limit on the amount a monthly payment can increase on an adjustable-rate mortgage. Percolation test   A test used to determine the ability of soil to accommodate a septic system. Per-diem interest   Interest charged or accrued daily. Panel   A section or division of a wall, ceiling or a flat piece of building material that forms the part of the surface of a wall, door or cabinet. Paneling   Strips of wood or wood material applied as a finish to a wall. Parking strip   The strip of grass between the sidewalk and the street in front of a house. Partition   Any kind of structure dividing one room or space from another. Patio   An interior courtyard or a paved backyard area. Perennial   Any plant that produces leaves, flowers and seeds from year to year, such as irises or peonies. Pergola   An arbor with an open roof of rafters supported by posts or columns. Personal property   Any moveable property in a house such as furniture or appliances. Pest-control inspection   A common pest-control inspection is a termite inspection. Pier   A rectangular masonry support column. PITI (Principal, Interest, Taxes, Insurance)   When a buyer applies for a loan, the lender will calculate the principal, interest, taxes and insurance. The figure is designed to represent the borrower's actual monthly mortgage-related expenses. Planned communities   The concept began in the 19th century and describes any town or neighborhood built with certain guidelines and goals. Planned-unit development   Residents own the home and the land, and share the use and financial responsibility for common areas. Plaster   A labor-intensive and more costly wall finish. Pocket door   A sliding door that retreats into the wall when opened. Point   Fees charged by lenders at the time a loan is originated. A point is equal to 1 percent of the total loan amount. Porch   The structure can be a simple covered entrance to a home or a fully enclosed room on the outside of a residence. Porte cochere   A porch-like roof extending over a driveway. Portfolio lender   A lender who makes loans with its own funds and keeps the loans on the company's books--in other words, inside the institution's "portfolio"--rather than selling the loan on the secondary market. Portico   A porch supported by a row of columns. Possession   When a buyer signs the papers and receives the keys to the house, the buyer officially takes possession. Power of attorney   A document that authorizes an individual to act on behalf of someone else. Pre-approval letter   A letter from a lender that informs a seller about the amount of money that a potential buyer can obtain. Prepaid expenses   The costs for taxes, insurance and assessments paid before the due date. Prepaid interest   Interest paid before it is due. For example, at the close of a real estate transaction borrowers usually pay for the interest on their loan that falls between the closing period and the first monthly payment. Prepayment penalty   Lenders can impose a penalty on a borrower who pays a loan off before its expected end date. Prequalification   Many lenders will prequalify a borrower who is shopping for a loan by completing a preliminary assessment of the buyer's ability to pay for a home. Pre-sold home   Homes that are sold before they are built. Pressure relief valve   A safety vent that relieves excess pressure in a water heater. Price range   The range of how much a buyer is willing to pay for a home. Primer   The initial coat of paint that is applied before the final topcoat. Principal   The amount of money that the borrower owes on a mortgage. Principle of conformity   The idea that a house will more likely appreciate in value if its size, age, condition and style are similar to, or conform to, other houses in the neighborhood. Principle of progression   An appraisal term which states that real estate of lower value is enhanced by the proximity of higher-end properties. Principle of regression   An appraisal term which states that the value of higher-end real estate can be brought down by the proximity of too many lower-end properties. Privacy fence   A structure erected between two pieces of property. Private mortgage insurance (PMI)   A special type of loan insurance that many lenders require borrowers to purchase if the borrower's down payment is less than 20 percent of the home's purchase price. Probate sale   A real estate sale triggered by the death of the owner, with proceeds to be divided among heirs or creditors. Production home   Homes that are mass-produced by one builder in a project. Programming   A written summation by an architect of a project's design objectives, constraints and criteria. Project budget   A fiscal outline that includes the construction budget and all costs for land, furniture, equipment, financing, professional services, contingencies and owner-furnished goods and services. Property line   The official dividing line between properties. Property report   A disclosure issued by the state when a time-share project is located or sold. Property tax   Property taxes are calculated at about 1.5 percent of the current market value. Property tax deduction   The U.S. tax code allows homeowners to deduct the amount they have paid in property taxes. Property value   The value of a piece of property is based on the price a buyer will pay at a certain time. Proration   Agreed-upon percentages of certain expenses associated with a piece of property that must be paid by the buyer or the seller at the time of closing. Punch list   Buyers compile a punch list during the final walk-through detailing items to be fixed before closing. Purchase agreement   A document which details the purchase price and conditions of the transaction. Purchase-money mortgage   A mortgage that a borrower obtains to acquire a property. Qualifying ratios   Lenders compute qualifying ratios to determine how much a potential buyer can borrow. Queen Anne style   A Victorian-era style that originated in San Francisco. Quit-claim deed   A document that releases a party from any interest in a piece of real estate. R-value   A construction term that refers to the resistance of to heat loss. The higher the R-value, the slower the rate of heat loss. Radon   A ground-generated radioactive gas that seeps into some homes through sump pumps, cracks in the foundation and other inlets. A leading cause of lung cancer , radon is found in mostly the northern half of the country. Rafter   Rafters form the slope of a pitched roof and are analogous to floor joists. Rammed-earth construction   An alternative building process in which dirt is compacted into large structural frames to create walls. Ranch style   Modern ranch-style homes, popularized in the 1950s, were championed by such architectural giants as Frank Lloyd Wright. Rate-improvement mortgage   A loan with a clause that entitles a borrower to a one-time cut in the interest rate without going through refinancing. Rate lock   When interest rates are volatile, many borrowers want to "lock in" an interest rate and many lenders will oblige, setting a limit on the amount of time the guaranteed interest rate is in effect. Real estate   Land and anything permanently affixed to it, including buildings, fences and other items attached to the structure. Real estate agent   A real estate agent has a state license to represent a buyer or a seller in a real estate transaction in exchange for a commission. Most agents work for real estate brokers. Real estate Laywer   A lawyers who specializes in real estate transactions. Real estate broker   A real estate agent who is licensed by the state to represent a buyer or seller in a real estate transaction in exchange for a commission. Most brokers also have agents working for them, and are entitled to a portion of their commissions. Real estate investment trusts (REITs)   The trusts are publicly traded companies that own, develop and operate commercial properties. Real property   Land and any permanent fixtures on it, including buildings, trees and minerals. Realtist   A designation for an agent or broker who is a member of the National Association of Real Estate Brokers. Realtor   A designation for an agent or broker who is a member of the Canadian Real Estate Association Recission   The cancellation of a contract by law or consent by the parties involved. Reconveyance   When a borrower completely pays off the mortgage, the property is reconveyed to them from the lender. Recorder   A public official responsible for keeping the records of all real estate transactions. Recording   The filing of a specific document to the appropriate government entity. Recording fee   A fee charged by real estate agents for conveying the sale of a piece of property into the public record. Redlining   The practice by a bank or insurance company to deny credit or insurance to people based on ethnic background or neighborhood. Refinancing   The process of replacing an older loan with a new mortgage that has better terms. Registered Education Savings Plan  Education savings plans that grow tax free until a child is ready to pursue a post-secondary education, at which time the money is withdrawn to help finance the costs. Registered Retirement Savings Plan (RRSP)  A savings plan introduced by the federal government to encourage Canadians to save money for retirement. The investment and the interest earned on it is sheltered: it will not be taxed as long as it is left in the plan. Rehabilitation mortgage   A mortgage that provides for the costs of repairing and improving a resale home or building. Relocation benefits   Benefits provided by employers for new workers and can include moving costs, reimbursement for temporary housing and transportation, real estate agent assistance and discounted loans. Relocation company   A firm that administers all aspects of moving in new employees to the community. Remaining balance   The amount of unpaid principal on a home loan. Remaining term   The original loan term minus the number of payments made. Renter's insurance   A policy that covers the replacement value of possessions. Rent loss insurance   A policy that covers any loss of rent or rental value in the event of fire or other damage that renders the property uninhabitable. Repayment plan   When a borrower falls behind in mortgage payments, many lenders will negotiate a repayment plan rather than go to court. Replacement reserve fund   Money that is set aside from homeowners' assessments to replace common property, such as furniture in a planned development's community room. Repossession   When a house is repossessed, it is taken back by the lender holding the mortgage. Resale value   The future value of a piece of property that can be affected by many factors, including the surrounding neighborhood, school scores, and economic and housing market conditions. Reserve fund   All homeowners associations set aside a certain amount of money for major repairs or improvements. Resident Alien  A person who is a legal permanent resident, but not a citizen, of Canada. Restructured loan   A mortgage in which basic terms -- such as interest rate, term and monthly payment -- have been changed to prevent foreclosure. Not a normal practice in Canada Return on investment   The amount of profit a property generates. Reverse mortgage   A special type of loan available to equity-rich, older owners. Repayment is not necessary until the borrower sells the property or moves into a retirement community. Ridge board   A horizontal board that serves as the apex of the roof structure. Ridge vent   A vent located along the ridge board of the roof that allows moisture to escape. Right of first refusal   An agreement by a property owner to give another person the right to buy or rent the property before it goes on the open market. Right to recission   A provision in the federal Truth-in-Lending Act that allows borrowers to cancel certain kinds of loans within three days of signing. Rough-in   The installation of plumbing, electrical and other mechanical systems. Sale-leaseback   A transaction in which the buyer leases back the property to the seller for a specified period of time. Sales contract   A contract signed by the buyer and sellerthat details the terms of a home purchase. Saltbox style   A design that dates to colonial times and takes its name from the shape of saltboxes. Sanitary sewer   The drain line in a house that carries away food and human wastewater to a municipal sewer system or a septic system. Sash   One of two windows in a double-hung window. Schedule I Banks  A designation in the Bank Act that refers to Canadian-owned banks that are widely held, i.e., ones in which no one owner holds more than 10% of shares. Schematic designs   Renderings of floor plans and the exterior of a house. Second mortgage   Another loan placed upon a piece of property. Secondary mortgage market   A market of packaged home loans that are resold as securities to investors. Secured loan   Any loan backed by collateral. Security   Apiece of property designated as collateral. Seller broker   A seller broker represents the interest of the seller. Seller carry-back   An agreement in which the seller provides financing for a home purchase. Seller take-back   An agreement in which the seller provides financing for a home purchase. Seller's market   A hot real estate market in which sellers have the advantage and multiple offers are common. Semi-custom home   The buyer of a semi-custom home is free to make some design changes but not to the home's structural plan. Septic system   A self-contained sewage treatment system that distributes wastewater to an underground storage area and relies on bacterial action to decompose solid waste matter.