• 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
A court document that states how much the loser of a lawsuit owes, and which creates a lien, or a claim on property, when filed with the county recorder where the property is owned.

• 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.

• Acceleration Clause
The section of a mortgage document that allows the lender to speed up the payment date in the event of a default, making the entire principal amount due.

• Acceptance
A property seller's formal, written approval of a buyer's offer.

• 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.

• 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.

• 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
43,560 square feet. A plot of land 180 by 242 feet is one acre.

• Acre Foot
The water or other material needed to cover an acre of land one foot deep. Equivalent to 325,851 gallons.

• 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."

• Actual Age
The years since a structure was built. Differs from effective age.

• Actual Cash Value
The amount of money that a broker or dealer has invested in the purchase and repair of a used vehicle.

• Back Title Letter
A document that a title insurance company gives to an attorney specifying condition of the title.

• Backup Offer
A bid for a property that the owner will consider if the current transaction falls through.

• 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 report of financial condition, including assets, liabilities and net worth.

• 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 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
A loan installment that is larger than the other, periodic payments and pays off the remaining principal.

• 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 court action under the Federal Bankruptcy Code by which a debtor's debts may be discharged, usually by transferring assets to a trustee, or rescheduled.

• Bankruptcy Trustee
A private individual or corporation appointed to undertake bankruptcy proceedings for a individual or corporation.

• Bargain Sale
Transfer of property or an item for less than market value.

• 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 unit of measure: 1/100th of one percent. For example, the difference between a 9.0% loan and a 9.5% loan is 50 basis points.

• Call Option
A clause in a mortgage that gives the lender the right to request the balance at any time.

• 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 provision in a lease or other contract that spells out under what conditions the parties can call off the deal.

• Cap
The top limit on the amount the interest rate can increase during a single time period of an adjustable-rate mortgage. Every ARM has two caps: a periodic cap, which limits the periodic changes to the interest allowed in the loan agreement, and a lifetime cap, which governs the total increase that can be imposed during the life of the loan.

• Capital
Money that is used to make money; for example, to buy rental property or a business.

• 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 an improvement to a property.

• Capital Gain Distribution
You receive capital gain distributions when the fund sells some of its assets and then passes along a portion to you. This distribution that you get is regarded by the IRS as a capital gain, not as ordinary dividends such as the interest you get from your bank account. It is important to separate capital gain distributions from ordinary dividends because capital gains are taxed more favourably. See also "Ordinary Dividends."

• Capital Gain or Loss
The difference between the price you paid for an investment and the price at which you sell (in other words, the profit or loss you make). Investments that earn capital gains or losses include equity and growth funds.

• Capital Gains
The profit that an owner makes when selling real estate or other capital asset. Capital gains receive more favourable tax treatment than regular income. Depending on your tax bracket and on how long you held an asset before selling it, you may pay about one-third to one-half less tax than you would have paid on the same amount if you had earned it as salary. See also "Capital Asset."

• Capital Gains Tax
A tax on profits from the sale of real estate or investments.

• Capital Improvement
Any permanent structure or other asset added to a property that adds to its value.

• Capital Investments
Money used to purchase permanent fixed assets for a business, such as machinery, land or buildings as opposed to day-to-day operating expenses.

• Capital Loss
When you sell an asset for less than you paid for it, or less than its adjusted basis, you have a capital loss. While it's never fun to lose money, when it comes to taxes a capital loss isn't necessarily all bad. You can reduce the amount of income that will be taxed by the amount of your loss, up to $3,000 per year. If your loss is more than that, you can carry the excess, known as capital loss carryover, forward indefinitely until the total loss is used.

• Days on the Market
The period between listing and sale, or listing and a property being taken off the market.

• Debit
Another name for withdrawal of funds from your account.

• Debit Bureau
A service used by banks that will eventually track account opening and closing information, cheque order history, cheque writing history, any history of collection activity on unpaid accounts, frequency of debit and ATM card use and household demographics. Under the system, when a consumer presents a cheque to a participating retailer, the individual's account is identified by punching a code into a computer or swiping a card containing a magnetic strip or microchip through an electronic reader, which tells the retailer whether to accept or reject the transaction.

• Debit Card
A payment card that is linked directly to a customer's bank account. Some cards require a personal identification number. Others require a customer's signature. A PIN-based or direct debit card removes a purchase price from a customer's chequing account almost immediately. A signature-based or deferred debit card has a Visa or MasterCard logo and removes the purchase price from a customer's bank account in two or three days.

• Debt
Money one person or firm owes to another person or firm.

• Debt Consolidation
The replacement of multiple loans with a single loan, often with a lower monthly payment and a longer repayment period. It's also called a consolidation loan. Ontario Equity has access to Canada's best debt consolidation products, for more info about debt consolidation see our debt consolidation page.

• Debt/Equity Ratio
A comparison of debt and equity used to measure the health of a business.

• Debt Issues
The issuance of bonds or other forms of debt on the public markets.

• Debtor
Technically, a person who has filed a petition for relief under the bankruptcy laws. More generally, anyone who owes.

• Deductions
These are expenses the government allows you to subtract from your taxable income. If you have taxable income of $31,000 and deductions of $4,000, then you would figure how much tax you owe on the difference -- $27,000.

• Deed
A document that provides title to property and is filed with a country recorder.

• Default
The condition that occurs when a consumer fails to fulfill the obligations set out in a loan or lease.

• Deflation
An actual decline in the general level of prices in the economy.

• Delinquency
Failure to make mortgage payments when mortgage payments are due.

• Delinquent Mortgage
A home loan in which the borrower has failed to make payments on time, as specified in the loan agreement.

• Demand Loan
A loan that must be repaid in full, on demand.

• Demographics
Characteristics of the population that influence consumption of products and services. They include age, sex, race, family size, level of education, occupation, income and location of residence.

• Dependent
A person who relies on someone else for financial support. If you have dependents, you can claim them as exemptions, which will reduce the amount of your income that is taxed.

• Deposit
A payment made to prove that a buyer is serious about making a given transaction. An earnest money deposit is money a buyer gives to a seller to purchase to prove that he or she is serious about buying the house.

• Deposit Insurance
The Canada Deposit Insurance Corporation insures depositors' funds to a maximum of $60,000 per depositor, per institution, with some exceptions, in the event of the failure of a federal financial institution. Deposits in some provincial financial institutions are also covered.

• E-cheque or E-check (U.S.)
An electronic version or representation of a paper cheque. The account holder writes an e-check (or e-cheque) using a computer or other type of electronic device and transmits the e-cheque to the payee electronically. Like paper cheques, e-checks are signed by the payer and endorsed by the payee. Rather than handwritten or machine-stamped signatures, however, e-checks are affixed with digital signatures, using a combination of smart cards and digital certificates. The payee deposits the e-check, receives credit, and the payee's bank clears the e-check to the paying bank. The paying bank validates the e-check and then charges the cheque writer's account for the cheque.

• E-commerce
A system used to conduct business transactions of buying and selling goods and services over a computer network

• Early Closing Cost Reimbursement
Some line-of-credit lenders waive underwriting costs when a line is opened in anticipation of future profits. If a line is then closed early, these institutions impose those fees retroactively.

• Early Occupancy
A condition in which the seller allows the buyer to move in before the sale is closed.

• Early Termination Charge
Charges that the leasee must pay if the car is turned in early before the term of the lease is over.

• Early Withdrawal Penalty
A depositor forfeits interest or is assessed a service charge for withdrawing funds from or closing out a time deposit before its maturity date.

• Earned and Unearned Income
Two different sources of income: earned income comes from wages, salary or business profits; unearned income comes from sources such as interest, dividends, rental income and pension benefits.

• Earned Income
All the money you earn. This includes any wages, salaries, tips, net earnings (if you're self-employed) and any other income received for personal services. Investment income, such as dividends and interest, is not counted as earned income. See also "Unearned Income."

• Earnest Money
Money given by a buyer when making a formal offer to demonstrate that the buyer is serious. Also called a deposit.

• Easement
A right of way giving persons other than the owner access to or over a property.

• Economic Growth
The rate of change in output from one year to the next.

• Economic Indicators
Statistics that help determine how the economy is faring. They include the Consumer Price Index, housing starts, and unemployment rates, among others.

• Effective Age
An appraiser's estimate of the physical condition of a building. The actual age of a building may be shorter or longer than its effective age.

• EFT/POS
Electronic funds transfer (EFT) at the point of sale (POS). A payment option which allows consumers to pay for purchases by transferring funds directly from their accounts to a merchant's accounts.

• Electronic Cash
Also known as e-cash. A system used to transfer cash over the Internet to pay for goods and service.

• Electronic Commerce
A system used to conduct business transactions of buying and selling goods and services over a computer network.

• Electronic Data Interchange (EDI)
EDI is a system that companies use to exchange business information electronically, virtually eliminating paperwork.

• Electronic Filing
Taxpayers can now file their tax information with personal computers and tax preparation software. The information goes directly to Revenue Canada and they can directly deposit refunds into the taxpayer's bank account.

• Electronic Funds Transfer
The transfer of money between accounts by consumer electronic systems such as automated teller machines (ATMs), and electronic payment of bills.

• 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.

• Fair Market Value
The highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept.

• FAQ
Short for frequently asked questions. The section of a Web site where the bank or financial institution posts answers to consumers' most commonly asked questions about the banking services.

• Fee Simple
Outright ownership of real estate, free of any liens or other claims against title.

• Fee Simple Defeasible
A condition in which someone has outright ownership of real estate, free of any liens or other claims against title, but whose use of the property has restrictions

• Fiduciary
An individual, company or association responsible for managing someone else's assets. Fiduciaries include executors of wills and estates, trustees, receivers in bankruptcy and those responsible for managing the finances of a minor.

• Fiduciary Duty
A requirement that a person in a position of trust, such as a banker, real-estate agent, or title agent, must act in good faith and honesty on behalf of a client.

• Field Changes
Modifications made to a building on-site.

• Filing Extension
An additional amount of time to file your return. A filing extension, however, does not give you more time to pay your taxes.

• Finance Canada
Federal department responsible for Canada's economic performance and regulation of financial institutions.

• Finance Charge
The charges that include all of the interest expected to be earned over the life of a loan, in addition to the service charges, mortgage insurance premiums and certain other charges related to a loan.

• Finder Fee
A fee paid by a party to another for services rendered.

• Firm Commitment
A lender's promise to lend money to a specific borrower on specified terms at a certain time.

• First Lien
Primary claim by the lender for satisfaction of outstanding debt. A first mortgage creates a first lien.

• First Mortgage
A mortgage that is the primary lien against a property.

• Fiscal Deficit
When the government spends more money than it receives in revenue over the course of one year.

• Fiscal Policy
The use of government spending and taxation policies to influence the economy.

• Fiscal Surplus
When the government receives more in revenue than it spends over the course of the year.

• Fixed Assets
Assets like machinery, land, buildings, or property used in operating a business that will not be consumed or converted into cash during the current accounting period.

• Fixed Expenses
Fixed business costs that do not change with the volume of business, such as rent for business premises, insurance payments, utilities, etc.

• Fixed Installment
Periodic (usually monthly) payment on a loan whose sum does not vary.

• Gap Insurance
A type of insurance offered to auto lease customers. It pays the difference between what you own and what the vehicle is worth in the event the car is stolen or destroyed.

• Garnishment
An amount withheld from your pay and remitted to another party, such as a creditor. You must include in your taxable income any amount that was garnished from your pay, because the full amount of your pay is considered to have been received by you even though some was withheld to pay your debts.

• 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 or company that performs work on a construction project, hires subcontractors and suppliers, or both.

• Gift From a Family Member
A gift of cash, to a mortgage applicant from a relative by blood or marriage, which the applicant is not required to repay. In some instances it is necessary to provide a written statement to that repayment is not required.

• Grace Period
If the credit card user does not carry a balance, the grace period is the interest-free time a lender allows between the transaction date and the billing date. The standard grace period is usually between 20 and 30 days. If there is no grace period, finance charges will accrue the moment a purchase is made with the credit card. People who carry a balance on their credit cards have no grace period.

• 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 Income
Normal annual income including overtime that is regular or guaranteed. The income may be from more than one source. Salary is generally the principal source, but other income may qualify if it is significant and stable.

• 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 Overtime
Overtime pay before taxes averaged over previous 24 months. Your overtime must be averaged over two years to be considered monthly income. Overtime earned for less than two years will not be considered.

• Gross Profit Margin
The difference between the sales your business generates and the costs you pay out for goods.

• Ground Rent
Amount a leaseholder pays periodically for use of land only.

• Guarantee
An enforceable warranty on the promise of quality of a product or formal promise by one person to take responsibility for the debts or obligations of another person if that person fails to meet them.

• Guaranteed Investment Certificate
An investment in which you deposit money, over a fixed period of time, and are paid a set rate of interest.

• Half-bath
A room that contains a toilet and sink, but no tub or shower.

• Hazard Insurance
Insurance coverage that compensates for physical damage to a property from natural disasters such as fire or other hazards. Depending where a piece of property is located, lenders may also require flood insurance or policies covering windstorms (hurricanes) or earthquakes.

• Hectare
An area equal to 100 meters by 100 meters

• 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

• Hold Back
An amount of money withheld by the lender during the progress of construction of a house to ensure that construction is satisfactory at every stage. The amount of hold-back is generally equivalent to the estimated cost to complete construction.

• Holding Period
The length of time a capital asset is owned. Assets held 12 months or less are short-term; those owned more than 12 months are long-term properties.

• Home Banking
A way to access bank accounts by phone. Typically customers can transfer funds, pay bills and make account inquiries.

• Home Equity
The part of a home's value that the mortgage borrower owns outright; the difference between the fair market value of the home and the principal balances of all mortgage loans.

• Home Equity Debt
Debt secured by your home.

• Home Equity Line of Credit
An open-ended loan, paid as revolving debt, that is backed by the equity in the property or home.

• Home Equity Loan
A loan that can replace or be an addition to the first mortgage. Typically used as a home improvement loan.

• Home Inspection
A thorough examination of a house's visible structural parts and systems, conducted before purchase.

• Home Office
A part of your home or other structure on your property for which you qualify to take a deduction for its business use.

• Home Warranty
A policy that guarantees workmanship on construction of a home and functionality of some appliances, and which pays for repairs for a specified period.

• Homeowner's Association
An elected group that governs a subdivision or planned community. It collects fees from owners to maintain common areas and enforce covenants, conditions and restrictions set by the developer and the association itself.

• Homeowner's Insurance
A policy that includes hazard coverage, covering loss or damage to property, as well as coverage for personal liability and theft.

• Homeowner's Insurance Binder
A document accompanying a homeowner's insurance policy. Its sole purpose is to verify that the homeowner's property is, in fact, properly insured.

• Homeowner's Warranty
A policy that guarantees workmanship on construction of a home and functionality of some appliances, and which pays for repairs for a specified period.

• Household Income
The total income of all members of a household.

• Illegal View (Quebec)
The existence of any exterior openings in a building which creates an illegal view of adjoining lands.

• Imports
Goods and services produced in other countries and sold in Canada.

• Income Approach (To Value)
One of the steps in the valuation process of an income property. The estimate of value is reached by estimating the annual income less an allowance for vacancies and bad debts and subtracting annual operating expenses, real estate taxes and insurance premiums to obtain the net operating income. This is then converted by capitalization into a capital value.

• Income Property
Real estate developed or improved to produce income. Also referred to as "non-owner occupied property" or "rental property."

• Income-splitting
A financial strategy for tax purposes. Splitting income refers to the process of shifting income from the hands of one family member to another, who is in a lower tax bracket and will therefore pay tax at a lower rate. This helps reduce your family’s overall tax burden.

• Income Statement
Also known as the profit & loss statement or P&L, enables you to calculate your company’s pre-tax profits by subtracting total expenses from total revenues.

• Income Tax
The main source of revenue for the federal government and many Provinces. The tax is based on your earned and unearned income. The amount or percentage taxed is based on the amount of income, using the governments graduated tax scale.

• Indefeasible
That which cannot be forfeited or done away with. Indemnity Protection or exemption from loss or damage.

• Independent Bank
A bank that is locally owned and operated, and not associated with a bank holding company. Also referred to as a community bank.

• Index
A table of yields or interest rates being paid on debt (such as Treasury notes or bank deposits) that is used to determine interest-rate changes.

• Inflation
A rise in the average level of prices in the economy.

• Informal Trust
Also known as in-trust account or "bare" trust, this is an investment account registered in an adult's name in trust for a child. The account is used to save/invest funds for a child, and the funds must be reserved for and used by the beneficiary child.

• Infrastructure
Basic installations that a community needs, such as schools, roads, water and electrical lines, power plants and communications systems.

• Initial Interest Rate
The introductory interest rate on an adjustable-rate mortgage (ARM), which usually changes at a predetermined time.

• Injunction
An order of a court of equity prohibiting an act or compelling an act to be done.

• Inspection Report
The documentation of a thorough examination of a house's visible structural parts and systems, conducted before purchase.

• Installment
The regular periodic payment that a borrower agrees to make the lender.

• Institute of Canadian Bankers (ICB)
Educational institute that provides career-oriented education and training programs to financial-services professionals.

• Insufficient Funds (NSF)
When funds are not enough to satisfy the payment of a cheque or draft made on that account; also known as non-sufficient funds (NSF).

• Insurable Title
Title that a title insurance company is willing to insure.

• Joint Account
A bank account owned by two or more persons who share equally in the rights and liabilities of the account.

• Joint Credit
Issued to a couple based on both of their assets, incomes and credit reports. It generally results in a higher credit limit, but makes both parties responsible for repaying the debt.

• Joint Liability
The responsibility of two or more people to repay a debt

• Joint Tenancy
Ownership by two people (usually spouses) in which each person owns an undivided interest in the entire property. When one joint tenant dies, the other has title to the entire property.

• Joint Venture
An association between two or more parties to own and/or develop real estate. It may take a variety of forms including partnership. It is formed for specific purposes and duration.

• Jointly-Owned Property
A property held in the name of more than one person.

• Judgement
The official authentic decision of a court of justice upon the respective rights and claims of the parties to an action or suit therein litigated and submitted to its determination.

• Junior Mortgage
A mortgage that is subsequent to the claims of the holder of a prior (senior) mortgage.

• Key
A password needed to decipher encrypted data.

• Key Lot
A lot of which ownership is essential in acquiring a piece of land for development, either because of its strategic location or the timing of the acquisition.

• Kicker
Term describing any benefit to a lender above ordinary fixed-interest payments. It may be an equity position in a property or a percentage participation in the income stream.

• Laddering
Staggering deposits into investments such as CDs in order to vary and better the rate of return.

• Land
Includes only the ground or soil, but everything which is attached to the earth, whether by course of nature as trees and herbage, or by the hand of man, as houses and other buildings. It includes not only the surface of the earth but everything under it and over it. Condominium Acts do divide land horizontally thereby limiting the vertical ownership.

• Land Contract
An agreement for sale of property in which the buyer takes possession while making payments, but the seller holds title until full payment is made.

• Land Title
The legal document conveying title to a property.

• Land Titles System
This is a system of land registration under which the registrar or master of titles passes on the validity of the instrument, determines its legal effect, and the Government guarantees title.

• Large Value Transfer System (LVTS)
System being created by the Canadian Payments Association that will settle large value payments, possibly $50,000 and over, at the central bank on a same-day basis

• Late Charge
A fee imposed on a borrower for not paying on time

• Late Payment
A sum a borrower sends to a lender that is received past the date when it was due.

• Latent Defect
A deficiency in a piece of property that can't be seen easily, such as termite damage or the presence of dangerous levels of radon.

• Lead Lender
A financial institution which heads up a financial consortium or syndicate to provide funds for a mortgage.

• Lease
A written agreement in which the property owner allows a tenant to use property in exchange for rent, and for a specified period. Or, a written agreement in which a car dealer allows a consumer to use a vehicle in exchange for payments for a specified period.

• Lease Extension
The continuation of an existing lease, at the original monthly payment, usually on a month-by-month basis.

• Lease Option
A written agreement in which an owner allows an individual to use a property in exchange for rent, and also gives that individual the right to buy the property for a specified price within a specified period

• Leasehold
An estate or interest in an estate in real property held by virtue of a lease for a term of years. A leasehold is considered personal property.

• Leasehold Mortgage
A mortgage given by a lessee on the security of his leasehold interests in the land.

• Legal Description
A way of identifying a piece of property in writing that is acceptable to a court.

• Legal Mortgage
The written geographical description of a property as described in the land register.

• Lender
The bank or mortgage company offering the loan.

• Lending Value
The property value for mortgage purposes. Usually the lesser of appraised value or sale price.

• Lessee
The person who signs a lease.

• Macroeconomics
Looking at the economy as a whole, particularly the interaction of its various components with one another.

• Maintenance Fee
A periodic assessment that residents pay to their homeowners or condominium association to pay for maintenance and repair of common areas.

• Manufactured Housing
Factory-built home that can be placed temporarily or permanently upon land. Styles vary from modest trailers to dwellings that look like site-built houses.

• Margin
Expressed as percentage points, the amount that a lender adds to an index to arrive at the final interest rate. For example, if the index is 9 percent and the margin 2.75 percent, the final interest rate is 11.75 percent.

• Marital Deduction
For estate tax and gift tax purposes, a deduction that allows you to transfer assets to your spouse tax-free.

• Market Conditions
Factors that affect the sales of homes in an area, such as interest rates, the unemployment rate, home appreciation, weather and time of year.

• Market Value
Also known as "Fair Market Value." The estimated value of a property which a seller could expect to receive under normal conditions.

• MasterCard
A credit card issued by MasterCard International which is distributed by many financial institutions around the world. Card holders borrow money against a credit line and pay it back with interest if the balance is carried over from month to month.

• Maturity
The date on which the principal balance of a loan becomes due and payable. It also marks the date when a bond pays off its principal.

• Maximum Financing
A mortgage made on a property in which the lender's lowest permissible down payment has been made.

• Meals and Entertainment
Expenses that are deductible in your business may include meals and entertainment, such as the cost of taking a client to a restaurant and a sporting event. These expenses, however, are only partially deductible (50 % in Canada)

• Mechanical Systems
A house's heating, cooling, plumbing and electrical apparatus.

• Median Price
In a given area, the amount paid for a house in which half of the houses in that area sell for less and half sell for more.

• Mediation
A method of resolving a dispute using a neutral party (a "mediator") who actively works to resolve the differences. A mediator cannot make a binding decision, as opposed to an arbitrator, who can.

• Merged Credit Report
A summary of one's credit history from the big two credit bureaus: Equifax and Trans Union.

• Metes and Bounds
A surveyor's legal description of a parcel of land, defined by measurements and angles.

• Microeconomics
Looking at the individual parts of the economy, with emphasis given to the market process and how it works.

• Mileage Allowance
The number of miles, specified in a lease, that a car may be driven over the life of the lease.

• Mileage Limitation
see "Mileage Allowance."

• Mill Rate
In reference to property taxes, a unit of taxation is a set ratio made by the city or municipal district.

• Negative Amortization
A gradual increase in mortgage debt that happens when the monthly payment does not cover the entire principal and interest due. The shortfall is added to the remaining balance to create "negative" amortization.

• Negative-equity Financing
Financing for new car buyers who owe more on their trade-in than the car is worth.

• Net Cash Flow
Incremental after-tax income plus depreciation expense resulting from investment.

• Net Income
The difference between effective gross income and expenses. The term is qualified as net income before depreciation and debt.

• Net Interest Margin
Net interest income (the difference between interest income and interest expense) as a percentage of average total assets.

• Net Operating Loss (NOL)
A net loss for the tax year attributable to business or casualty losses. Taxpayers may use an excess loss of one year as a deduction for certain past or future years.

• Net Worth
The total value of all assets, such as house, car, furniture and investments, minus all debts, such as mortgages and credit card bills.

• Netting
The offsetting with a counter-party of financial obligations or payments one is owed with those one is entitled to receive, thus reducing the costs arising out of payment settlements. Netting is also used as a risk management tool to help counter-parties reduce their exposure to credit risk.

• Niche Banks
Smaller banks that cater to particular communities or certain industries. These banks have been thriving in the fallout from mega-bank mergers.

• NIMBY (Not In My Backyard)
A term, usually used derisively by people who don't live in the affected vicinity, to describe residents' opposition to the introduction of something they don't want in their neighborhood, such as a group home, toxic waste incinerator or prison.

• No-doc Loan
See "No-documentation Loan".

• No-documentation Loan
A mortgage in which the applicant provides a minimum of information -- name, address, Social Insurance number (so credit reports can be pulled), and contact information for an employer, if there is one. The underwriter decides on the loan based on the applicant's credit history, the appraised value of the house and size of down payment.

• No Money Down Mortgage
Available in Canada as a true 100% mortgage financing product.

• Non-assumption Clause
A provision of a home loan that prohibits the transfer of the mortgage to another borrower without the lender's permission.

• Non-dischargeable Debt
A debt that cannot be eliminated in bankruptcy. Most Federal taxes is a good example.

• Non-liquid Asset
A possession that can't be transformed readily into cash. Stocks and bonds are liquid assets because they can be sold easily; a house is a non-liquid asset because it takes time to sell.

• Non-owner Occupant
A borrower who will not be residing in the subject property as their principal residence; the borrower on rental/investment property.

• Non-recurring Closing Costs
One-time fees paid at a real-estate settlement, including origination, appraisal, points, title insurance and credit report.

• Non-refundable Credit
Tax credits reduce your tax liability dollar-for-dollar. Non-refundable credits can get your tax bill down to zero.

• 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.

• Offline Debit Card
Cards that share traits of both ATM and credit cards. Offline debit cards have the VISA or MasterCard logo on them and can be issued by a bank, either instead of or in addition to an ATM card. These cards can be used at any establishment that displays the VISA or MasterCard logo, but using them doesn't access a line of credit -- it debits a customer's chequing account. It is "offline" because the account isn't directly accessed -- there's a delay of 24 to 72 hours before the debit is made in the account. If you sign a slip of paper to conclude the transaction, it was offline. In the Canada, a Personal Identification Number (PIN) may be required to use an offline debit card.

• On-Us Item
Payment that is deposited at the same financial institution on which it was drawn or written, e.g., a cheque that was written by one customer of a bank and deposited by the recipient at another branch of the same bank. These items are not cleared between institutions and therefore are generally not represented in statistics of payments exchanged between financial institutions in the clearings.

• One-year Adjustable
Mortgage whose annual rate changes yearly. The rate is usually based on movements of a published index plus a specified margin, chosen by the lender.

• Online Banking
Access by personal computer or terminal to bank information, accounts and certain transactions via the financial institution's web site on the Internet. Also known as Internet banking.

• Online Bill Payment
A service offered by online banks, usually for a small monthly fee, that relieves consumers from having to write cheques and lick stamps to pay their monthly bills. Online bill payment systems allow people to enter the names of their creditors and the numbers of their utility accounts and pay virtually all routine bills.

• Online Debit Card
An online debit card deducts funds from the bank account immediately, as soon as the card is used. It may have the VISA or MasterCard logo, or only the issuing bank's logo, like an ATM card. There is no delay for processing the transaction -- the money is immediately deducted from your account.

• Open-end Lease
Sometimes called a finance lease. It usually offers lower payments, but carries a risk for the consumer. Under an open-end lease, the lessee must pay any difference between the residual value of the car as stated in the lease and the fair market value of the car, if lower, at the end of the lease. The lessor pays for the appraisal that sets the value. If the consumer doesn't agree with it, the consumer may pay for a binding, independent appraisal by someone agreed to by both parties.

• Open House
A selling tool in which a real-estate agent advertises a property for sale and invites people to visit without making an appointment.

• Open Listing
A property that a number of brokers can market and sell for a commission.

• Open Mortgage
A mortgage that can be paid off prior to maturity without penalty.

• Operating Loan
A loan intended for short-term financing, supplying cash flow support or to cover day-to-day operating expenses.

• Option
A legal agreement giving someone the right to buy, sell or lease a property or item at specified terms for a specified period.

• Options
Also known as add-ons. These are features added to the car often by the dealer such as a CD stereo, anti-theft system, detailing and undercoating. Some items are purely decorative, known as "mop and glow," and do not add any value to the car.

• Oral Agreement
A spoken, unwritten legal agreement, worth the paper it's printed on.

• Ordinary Dividends
Dividends that are distributions of a company's profits. They are fully taxable.

• Ordinary Income
Income that does not qualify as a capital gain. Wages, interest, dividends and net income from a business are examples of ordinary income.

• Original Principal Balance
The amount borrowed.

• Origination Date
The date on which the loan is funded.

• Origination Fee
The fee a lender charges to process a loan. It usually includes the cost to prepare loan documents, check a borrower's credit history, inspect the property and sometimes conduct an appraisal. Ontario Equity will in most cases use a lender who doesn't charge this fee or we will cover the cost in full.

• Over-the-limit Fee
A fee charged for exceeding the credit limit on the card.

• Parking
A term that refers to depositing, or “parking,” cash in a high-yield money market account until you need to move it to a chequing account to pay bills.

• Passbook
A book in which all the transactions in a bank account are noted. This book may list the transaction codes and the customer's responsibilities.

• Passive Activity
An activity in which you do not materially participate. Real estate rentals and limited partnerships are examples of passive activities.

• Passive Loss
Loss from a passive activity. Passive loss rules limit the amount of passive loss you can deduct to the total of your other income from passive activities.

• Payee
The name of the person to whom the money in a cheque is to go.

• Payment Adjustment Period
The time during which payments on an adjustable-rate mortgage (ARM) may go up or down.

• Payment Cap
A contractual limit on the size of the monthly payment of an adjustable-rate mortgage or other variable rate loan.

• Payroll Taxes
A tax based on wages, tips and salaries paid. The tax is deducted from the employees pay.

• PC Banking
A service that allows a bank customer to obtain account information and perform certain bank transactions through a personal computer.

• Penalty
A mortgage penalty is a set rate or length of time the penalty will be charges based on remaining mortgage amount. Usually three months interest or interest rate differential. Penalty –- A mortgage penalty is a set rate or length of time the penalty will be charges based on remaining mortgage amount. Usually three months interest or interest rate differential.

• Penalty Rate
Several percentage points higher than a card's current annual percentage rate, which goes into effect after two late payments. On some cards, a single late payment triggers a penalty rate.

• Per-diem Interest
Interest that is charged daily; usually refers to the partial month's interest that the buyer pays on the mortgage covering the period from the day of closing to the end of the month.

• Per Item Charge
The fee charged to an account holder who has exceeded the number of free transactions allotted to the described account and/or the balance in the account did not meet the average monthly balance required to waive the fee.

• Periodic Rate
The interest rate described in relation to a specific amount of time. The monthly periodic rate, for example, is the cost of credit per month; the daily periodic rate is the cost of credit per day.

• Periodic Rate Cap
In an adjustable-rate mortgage (ARM), it limits how much an interest rate can increase or decrease from one adjustment period to the next.

• Personal Consumption Spending
What households collectively spend on goods and services.

• Personal Disposable Income
Personal income minus personal income tax payments. Also called "take-home pay."

• Personal Finance Manager
Specialized computer programs that help customers carry out a variety of personal finance activities. These programs typically allow consumers to do much of their work off-line, then dial in to complete their bank transactions.

• Personal Identification Number (PIN)
A unique, confidential number or pass code, usually consisting of four to six digits, entered by a customer when using an Automated Teller Machine (ATM) or Interac Direct Payment, that gives the customer access to his or her account.

• Personal Loan
A loan made for personal, family, or household use as opposed to a business-type loan or a long-term mortgage loan to finance real estate.

• Qualifying Ratios
As calculated by lenders, the percentage of income that is spent on housing debt and combined household debt. The first qualifying ratio, called the gross debt service or GDS is up to and including a maximum of 32% of the combined gross family income. The second qualifying ratio is the Total debt service or TDS is up to and including 40% of gross income.

• Rate
Percentage a borrower pays for the use of money, usually expressed as an annual percentage.

• Rate Cap
A limit on how much the interest rate can change, either at each adjustment period or over the life of the loan.

• Rate Hold
The amount of time that a lender will guarantee a loan's interest rate. Once you've locked in the interest rate on a loan, the lender will guarantee that rate for a certain period of time, usually between 60 and 120 days. In order to lock-in your interest rate with OntarioEquity.com, please fill out our easy to use online mortgage application.

• Rate Index
A table of yields or interest rates being paid on debt (such as Treasury notes or bank deposits) that is used to determine interest-rate changes for adjustable-rate mortgages and other variable-rate loans.

• Rate Lock-in
A written agreement in which the lender guarantees the borrower a specified interest rate, provided the loan closes within a set period of time.

• Ratio
Comparison of two figures used to evaluate business performance, such as debt/equity ratio and return on investment.

• Real Estate
Land and the buildings and other improvements on it. See also "Real Property."

• Real Estate Agent
A person who is licensed to represent a buyer or seller of land and the buildings and other improvements on it.

• Real Estate Attorney
A lawyer who specializes in the transfer of land and buildings and property tax issues.

• Real Estate Broker
A person who is licensed to represent a buyer or seller of land and the buildings and other improvements on it and collect commissions for the work. Most brokers have agents working for them and collect a portion of their commissions in exchange for providing office space, marketing and other overhead.

• Real Property
Permanent, non-movable property, such as land and buildings. See also "Real Estate."

• Realtor
A real estate broker or an associate holding active membership in a real estate board.

• Realty
See "Real Estate."

• Rebate
A manufacturer's reduction on the price of a car as an incentive to buyers. Rebates appeal to people with no credit or less-than-perfect credit who cannot qualify for the lowest-rate loan. A rebate may also appeal to first-time buyers who don't have a lot of cash for a down payment or another car to trade in.

• Rebate Card
This is a credit card that allows the customer to accumulate cash, merchandise or services based on card usage.

• Recession
A prolonged period (popularly defined as two successive quarters) in which economic activity shrinks.

• Recognized Gain or Loss
The amount of gain or loss you report for income tax purposes. You may be able to defer recognizing gain or loss on certain property exchanges, such as like-kind exchanges.

• Reconciliation
Checking all bank account papers to make sure that the bank's records and your records agree.

• Reconveyance
The transfer of title to the borrower after a mortgage has been paid fully.

• Refinancing
The repayment of a mortgage with another mortgage. Homeowners typically refinance to take advantage of lower interest rates or to transform equity into cash. You can use the equity in your home for vacations, home improvements (such as renovations) and for consolidating debt. Ontario Equity has access to some of the best refinance products available on the Canadian market.

• Sale-leaseback
A transaction in which the seller transfers the title to the buyer, then rents the property from the new owner. Generally not done in Canada, more an American practice.

• Sales Contract
A written document in which a purchaser agrees to buy property under certain given conditions, and the seller agrees to sell under certain given conditions. Also known as an "Agreement of Sale."

• 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.

• Schedule II Banks
A designation in the Bank Act that refers to foreign-owned banks and closely held Canadian banks, i.e., banks in which an owner may hold more than 10% of outstanding stock.

• Schematic Designs
Structural plans for a building's mechanical systems, such as its plumbing and electrical functions.

• Seasonal Unemployment
The loss of jobs due to changes in the climate and other conditions. Forestry, fishing and construction are affected by climate, while retailing is affected by seasons and holidays. For instance, at Christmas, retail employment is higher than in January.

• Second Mortgage
A mortgage which ranks after a first mortgage in priority on a registered land title.

• Secondary Mortgage Market
The trade in home loans that are bundled together and sold as securities to investors. It frees money so more people can get mortgages.

• Secured Card
A credit card that a cardholder secures with a savings deposit to ensure payment of the outstanding balance if the cardholder defaults on payments. It is used by people new to credit, or people trying to rebuild their poor credit ratings.

• Secured Debt
A debt that is secured by a lien on debtor's property that may be taken by the creditor in case of non-payment by the debtor. A common example is a mortgage loan.

• Secured Loan
Borrowed money that is backed by collateral.

• Securities
Negotiable instruments such as stocks and bonds.

• Securities/Investment Dealer
One who acts as the agent for another party to buy and sell securities and other investments; also an underwriter.

• Security
Property designated as collateral.

• Security Deposit
In automobile leases, sometimes called reconditioning reserve. An amount, often the same as one month's payment, the dealer holds to be sure that the car will be returned in good condition. It is to be returned, less fees and damage charges, at the end of the lease.

• Self-Employed Person
A person who runs a trade or business, rather than working as an employee for someone else. You are self-employed if you are a sole proprietor or a partner working in a business. You can be an employee and self-employed at the same time if you have an independent business outside your regular employee hours. To qualify for many business tax exclusions and deductions, the enterprise must make a profit in three of five years. In most cases in order to qualify you must take and average of the last 2-3 years tax assessments.

• Seller Broker
One who earns a commission from the seller of a property in exchange for finding a buyer and assisting in negotiation.

• Seller Carryback or Transfer Back
A form of financing in which the seller of a property accepts a down payment and agrees to accept payments until the property is paid for.

• Seller's Market
A market where a seller is expected to sell quickly and for market or above market value.

• Semi-custom Home
A house in which the buyer cannot alter the layout, but can specify amenities such as type of cabinets and floor coverings.

• Takeout Mortgage Loan
A long term mortgage loan that is advanced to borrower on completion of construction or in compliance with any other conditions in the loan commitment. The funds are normally used to pay off or take out the construction lender.

• Tangible Personal Property
Assets other than real estate that physically exist. Business equipment and vehicles are tangible personal property. Assets such as stock certificates and franchises only represent value and are therefore intangible property.

• Tax Deduction
An expense that governments allow you to subtract from your income before computing your income tax.

• Tax Deferral
The postponement of taxes to a later year, usually by recognizing income or a gain at a later time. Remember, this only delays your tax liability; it doesn't eliminate it.

• Tax Exempt
Income that is not subject to tax. Income exempt from federal tax may, however, be subject to provincial taxation.

• Tax Liability
The total amount of tax you owe.

• Tax Lien
A claim, or obstacle, to the sale of property because of unpaid taxes. The property's title can't be transferred until liens are paid.

• Tax Sale
A government sale of property to recover unpaid taxes.

• Tax-sheltered
A tax shelter is a savings/investment plan which offers significant tax savings.

• Taxable Income
Adjusted gross income less itemized or standard deductions, less personal and dependent exemption amounts.

• Tear-down Condition
A house that is bought so it can be razed to make room for a newer house; usually located in a spectacular setting.

• Teaser Rate
Often called the introductory rate, it is the below-market interest rate offered to entice customers to switch credit cards or lenders.

• Tenancy by the Entirety
Ownership by spouses in which each spouse owns an undivided interest in the entire property. When one spouse dies, the other has title to the entire property.

• Tenancy In Common
Ownership of ad by two or more persons: unlike joint tenancy in that interest f deceased does not pass to the survivor, but is treated as an asset o the deceased's estate.

• Tenants in Common
Ownership by two or more people in which each person owns an undivided interest in the entire property and all have equal rights to use the property. When one tenant in common dies, that person's interest may be sold, mortgaged or transferred to another in a will.

• Tenure
The act, fact, or condition of holding something in one's possession such as real estate. A period during which something is held.

• Term
The length of time you commit to repay a lender or bank at an agreed upon interest rate and payment schedule. The interest rate usually remains constant during this term unless the commitment states otherwise. For example, a five year fixed rate mortgage has a term of five years.

• Term Deposit
An investment product in which you deposit a fixed sum of money for a set period of time and are paid interest.

• Term Loan
A loan intended for medium-term or long-term financing to supply cash to purchase fixed assets such as machinery, land or buildings or to renovate business premises.

• Third-party Originator
One who takes all or part of the mortgage application and transfers or sells it to a lender.

• Umbrella Mortgage
Also referred to as a wraparound, a special arrangement whereby one document encompasses one or more already existing mortgages registered on the same property. The mortgagee is responsible for remission of payment(s), to lender(s), while the mortgagor makes one payment to the mortgagee.

• Underpayment Penalty
A penalty for not paying enough total estimated tax and withholding. You can avoid underpayment penalties by paying a percentage amount of last year's tax due or of the current year's expected tax due. You may pay the taxes in combined estimated and withholding tax payments.

• Underwriting
The analysis of risk involved in making a mortgage loan to determine whether the risk is acceptable to the lender. Underwriting involves evaluating the property as outlined in the appraisal report, and also evaluating the borrower's ability and willingness to repay the loan.

• Unearned Income
Income such as interest, dividends, capital gains or rents, as opposed to earned income, such as wages, tips and salaries.

• Unemployment Rate
The percentage of the labour force that is not employed but currently seeking work.

• Unsecured Claim
A claim or debt for which a creditor holds no special assurance of payment, unlike a mortgage or lien; a debt for which credit was extended based solely upon the creditor's assessment of the debtor's future ability to pay.

• Unsecured Debt
Debt that is not guaranteed by the pledge of any collateral. Most credit cards are unsecured debt, which is a main reason why their interest rate is higher than other forms of lending, such as mortgages, which employ property as collateral.

• Unsecured Loan
An advance of money that is not secured by collateral.

• Up-front Costs
The costs that must be paid at the time of signing a car lease agreement. These can include the first month's payment, a refundable security deposit, a capitalized cost reduction or down payment, taxes, registration and other fees.

• Upgrades
Options that allow buyers of newly built houses to select higher-quality floor coverings, cabinets, windows and other amenities for more money.

• Upside-down
A position that consumers find themselves in when the outstanding balance of a loan is higher than the current fair market value of the property purchased with the loan. In automobiles, it is most common in the early years of a lease or loan, when the car is depreciating rapidly but the balance owed remains very high. See also "Depreciation."

• Upzoning
The process, often controversial, of changing the zoning in an area, usually to allow greater density or commercial use. Sometimes the term is used to mean the opposite -- changing the zoning in a broad area to limit growth and density.

• Useful Life
The number of years depreciable business property is expected to be productive and in use. For depreciation purposes, the IRS has predetermined useful lives for most types of business properties.

• Usurious Rate
A rate based on unnecessarily or unlawfully high interest; act or practice of lending money at high interest; sometimes intangible property taxes are applied to income from usurious rates.

• Usury
Illegal, excessive interest.

• V
If the letter V appears after the annual percentage rate (APR), the interest rate is variable and subject to change.

• Valid
Sufficient in law; effective.

• Valuable Consideration
The granting of some beneficial right, interest, profit, or suffering of some detrimental forbearance, loss or default by one party in exchange for the performance of another.

• Valuation
The estimation of a property's price value through an appraisal.

• Variable Interest Mortgage
A loan where the interest rate may vary during the term of the mortgage. The variance is usually tied to some specific factor such as prime bank rate or the guaranteed investment certificate rate for a designated lender.

• Variable Interest Rate
Percentage that a borrower pays for the use of money, and which moves up or down periodically based on changes in other interest rates.

• Variable Rate
See "Variable Interest Rate."

• Variable Rate Mortgage
Home loan in which the interest rate is changed periodically based on a standard financial index. Also called an "Adjustable-rate Mortgage." Ontario Equity has access to the best Variable rate/below prime mortgages in Canada.

• Vendor Take Back
Where the seller of the property provides all or some of the financing in order to sell the property.

• Verification of Employment
Confirmation that a loan applicant is telling the truth about where he or she works and how much he or she makes.

• VISA
A credit card issued by VISA USA which is distributed by financial institutions around the world. A VISA card holder borrows money against a credit line and repays those funds with interest if the balance is carried over from month to month in a revolving line of credit.

• Void
Of no legal effect. A nullity.

• Voidable
Where one party to a contract is entitled to rescind the contract at his/her option.

• Waiver
The intentional and voluntary renunciation, abandonment, or surrender of some claim, right, or privilege.

• Walk-away Lease
The most common type of car lease, also known as a closed-end lease. The lessee may return the car at the end of the lease term, pay any end-of-lease costs, such as the disposition fee, and the lease agreement is over. In a closed-end lease, the lender assumes the risk of predicting the value of the vehicle (its residual value) at the end of the lease's term. Closed-end lease payments are somewhat higher than open-end lease payments.

• Walk-through
A buyer's final inspection of a property, usually on the day of closing or the day before.

• Warranty
1. A document certifying clear title to real estate. 2. A guarantee from a dealer or a manufacturer that a vehicle or product will perform as expected or specified. An auto warranty usually covers specified mechanical problems for a set number of miles or period.

• Witness
To subscribe one's name to a deed, will or other document for the purpose of attesting its authenticity and proving its execution by testifying, if required.

• Workout
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.

• Wraparound Mortgage
A refinanced home loan in which the balances on all mortgages are combined into one loan.

• X
A symbol used in contracts, or other legal documents, representing where a signature should appear.

• Year-End Statement
A report sent to the borrower each year. The report shows how much was paid in taxes and interest during the year, as well as the remaining mortgage loan balance at the end of the year.

• Yield to Maturity (YTM)
The internal rate of return on an investment. Typically takes into account all investment returns and their timing.

• Zero Balance
What shows on a credit card customer's bill when the outstanding balance has been paid and no new charges have been incurred during the billing cycle.

• Zero Down Mortgage
Available in Canada as a true 100% mortgage financing product. See also "No Money Down Mortgage."

• Zoning
Areas within a city limits in which certain types of land uses are allowed. For example, a zoning ordinance might permit houses but not factories in a neighborhood.