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Mortgage Terms And Definitions
Verico Brokers For Life Inc.
106, 8704 - 51 Avenue Edmonton, Alberta T6E 5E8
www.brokersforlife.ca
Brokers For Life
Toll Free 1.866.902.7771
Real Life Mortgage Solutions
www.brokersforlife.ca
Adjustable Rate Mortgage
In an adjustable rate mortgage, the interest rate and monthly
payments fluctuate based on market interest rates. As the interest
rate adjusts up or down, payment amounts adjust accordingly so
that the amortization period remains the same. This method
should be used carefully, as changes in payment amounts could
present an issue for those on a tight budget.
Verico Brokers For Life Inc.
106, 8704 - 51 Avenue Edmonton, Alberta T6E 5E8
www.brokersforlife.ca
Brokers For Life
Toll Free 1.866.902.7771
Real Life Mortgage Solutions
www.brokersforlife.ca
•Amortization Period
This is the period of time that it will take for you to repay your mortgage in full,
typically ranging from 15 to 25 years. A longer amortization period will result in
lower payments, but you’ll also end up paying more in interest over the length of
the mortgage. A shorter period results in less interest paid as well as higher
payments. It’s wise to choose the shortest amortization period you can afford.
•Assets and Liabilities
Assets include your checking and savings account balances, RRSP and investment
balances, vehicles, and property you own. Your liabilities may include other
mortgage, credit card debt, and outstanding loans.
Verico Brokers For Life Inc.
106, 8704 - 51 Avenue Edmonton, Alberta T6E 5E8
www.brokersforlife.ca
Brokers For Life
Toll Free 1.866.902.7771
Real Life Mortgage Solutions
www.brokersforlife.ca
•Bridge Financing
Bridge financing is a form of credit that bridges the time between when you need
financing and when long-term financing can be secured. Often used as funding
between the sale of one property and the purchase of another, this short term
solution is best used with the help of a professional mortgage broker.
•Cash Back Mortgage
A cash back mortgage is an option, used in fixed rate mortgages, that offers the
buyer a lump sum of cash at the time of their closing. This method is especially
helpful in covering the expenses of moving, lawyer’s fees, or even renovations to
your new home.
Verico Brokers For Life Inc.
106, 8704 - 51 Avenue Edmonton, Alberta T6E 5E8
www.brokersforlife.ca
Brokers For Life
Toll Free 1.866.902.7771
Real Life Mortgage Solutions
www.brokersforlife.ca
Closed Mortgage
A closed mortgage sets a limit on the amount and frequency at which you may
make lump sum payments. In this case you may be charged a penalty should you
choose to pay off your mortgage prior to the end of your term (for example, if you
sell the home).
Commercial Mortgage
A commercial mortgage is secured using real estate as collateral.
Construction Mortgage
A construction mortgage is secured by real estate. This type of mortgage is used to
fund the construction or renovation of buildings on the property.
Verico Brokers For Life Inc.
106, 8704 - 51 Avenue Edmonton, Alberta T6E 5E8
www.brokersforlife.ca
Brokers For Life
Toll Free 1.866.902.7771
Real Life Mortgage Solutions
www.brokersforlife.ca
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Verico Brokers For Life Inc.
106, 8704 - 51 Avenue Edmonton, Alberta T6E 5E8
www.brokersforlife.ca