GLOSSARY    S to Z

SECOND MORTGAGE

Any additional mortgage legally registered against a property that already has a mortgage.
For example: a second mortgage, a third mortgage, etc...

A 'first' mortgage will normally have a better interest rate than any subsequent mortgages. This is because the 'first' lender has first claim on any funds that are recovered from a sale or a foreclosure.

A 'second' mortgage is literally a mortgage registered, by date and time, after the first one. Usually the interest rate is higher as there would be fewer dollars available after the holder of the first mortgage has been repaid. The rate is higher because of the extra risk the second lender incurs.

It is NOT the date and time that money is lent, but the date and time the mortgage document is registered at land titles office, that legally indicates which lender will have a 'first' mortgage.

If a lender proceeds with a foreclosure, the first mortgagee gets paid first, and if anything is left from the sale, the second (& third etc.) mortgagees receive their money.

STRATA

With strata ownership the land, and any common areas, are owned collectively by all unit owners. Each residential apartment is solely owned by the purchaser.

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STRATA FEES

A fee charged by a strata corporation to cover the costs of common areas, repairs and maintenance, garbage collection, upkeep of swimming pools, etc... Sometimes a management company is hired to look after the building and grounds, this is also paid for with the strata fee.

SWITCHING YOUR MORTGAGE

You might decide to switch your mortgage to another lender at the renewal date (unless you have an open mortgage, when it can be done anytime). Usually this costs very little - if anything.
The main reason for switching is to get a better fixed interest rate, with a longer rate guarantee time period than your current lender is willing to give you. You should consult your mortgage broker about four months prior to your renewal date.

With some lending institutions it is possible to switch your mortgage during the term, however, you will probably have to pay a penalty.

To switch your mortgage you will have to re-qualify for your current mortgage amount.
This means that you will have to give proof of your income again and go through another credit check.

If your mortgage is presently with a major lending institution, there are usually no legal fees to switch your present mortgage balance (or a lower amount if you have funds to reduce the balance).
Most banks will charge an administration fee for losing the mortgage, however some lending institutions will pay that fee for you to get your business. These fees are usually $85 to $250.

Your new lender and your previous lender will sign and register with Land Titles Office an agreement that the debt has changed hands.

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TENANTS IN COMMON

See also 'Joint Tenancy'

Sometimes two or more people own a property together. If one person who owns property with others as tenants in common dies, the property does not automatically pass to the others. The percentage interest of the deceased goes to whomever they have left it to.

Example a:
A and B own a house together. Each has a 50% interest. As they are just friends, each makes a will leaving her half to her family, or charity of her choice. Upon the death of A her 50% interest passes to her family and not to B.

Example b:
A owns a 12% interest, B owns a 40% interest, C owns a 48% interest - each can leave his or her respective share to anyone they want.

Example c:
A owns 40% as a tenant in common, B & C own the remaining 60% as joint tenants. In this case A can leave his 40% interest to anyone he wants. If B died, his whole interest passes to C (and vice versa). If both B & C died, their interest passes to whomever they have chosen.

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TITLE

Title proves ownership of property.
In some areas (such as British Columbia) documents proving ownership reside in the Land Titles office. In other areas of Canada, the owners hold the actual title document and lawyers must research a minimum of 50 years to prove ownership.
Freehold title gives the holder full ownership of the land and buildings for an indefinite time period.
Leasehold title gives the holder a right to use and occupy the land and buildings for a defined period of time.

TODAYS INTEREST RATES

Rates are not given on this website.
Mortgage rates now change almost every day - and sometimes during the day.

Many financial institutions and mortgage broker websites list 'current' mortgage rates. Most banks list their posted rates (no discount) and many other websites quote American rates, which are not similar to Canadian rates. On many sites, the rates are out of date!

Phone your mortgage broker to get the latest rates.

UNDERWRITING

A lending institution that agrees to accept the risk of your mortgage 'underwrites' the amount they are lending you.
By assessing your credit history, your income and debts, the lender will decide whether or not to lend you money. If your application is borderline, they may lend you money, but at a higher interest rate - or by charging a fee.
In exchange for lending you the money they will register a mortgage against your property.

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VENDOR

VENDOR TAKE BACK MORTGAGE

Mortgage financing is arranged between the seller and the buyer of the property. Title is transferred to the buyer.
Often this type of loan is a second mortgage, which the seller is willing to finance to help the buyer purchase the property. Most of these loans are not renewable and are not transferable to someone else.

WATER POTABILITY

Water potability refers to the cleanliness and drinkability of the water supply.

CMHC requires lenders to obtain Water Potability Certificates in those cases where the home is not serviced by a municipal water supply.

Water potability must meet provincial standards, or in the absence of such standards, Health Canada's Guide on Canadian Drinking Water Standards.
In British Columbia the guidelines are available at www.qp.gov.bc.ca/

Health Canada requires that a waterworks system must meet the following microbiological tests:

1. Faecal Coliform: 0 parts per 100 ml
2. Total Coliform: 0 parts per 100 ml

ZONING BYLAWS

Municipal or regional by-laws that restrict or specify land use.
e.g. residential only, commercial only, or mixed use.

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