D

Debt Service Ratio
The percentage of a borrower’s income that can be used for housing costs. Gross Debt Service (GDS) Ratio is the amount that a lender will permit a borrower to use from his/her gross income in order to quality for a loan for housing costs, including mortgage payment and taxes (and strata fees when applicable). Total Debt Service (TDS) Ratio is the maximum percentage of a borrower’s income that a lender will consider for all debt repayment (other loans and credit cards, etc.) including a mortgage.

Deed
A legal document that is signed by both the vendor and the purchaser, transferring ownership. This document is registered as evidence of ownership.

Default
Failure to abide by the terms of a mortgage loan agreement. A failure to make mortgage payments may give cause to the mortgage holder to take legal action to foreclose the mortgaged property.

Delinquency
Failing to make a mortgage payment on time.

Deposit
A sum of money placed in trust by the purchaser when an Offer to Purchase is made. The real estate brokerage or lawyer holds the sum in trust until the sale is closed, and then it is paid to the vendor.

Depreciation
The decrease in value in a home from when the home was first purchased.

Discharge of Mortgage
A signed document by the mortgage lender given to the borrower when a mortgage loan has been repaid in full.

Double Up
The option to make twice the normal regular payment at a regular payment due date.

Down Payment
The portion of the house price the buyer must pay up front, before securing a mortgage. Deposits generally range from 5% - 20% of the purchase price.


E

Easement
A legal right to use or cross (right-of-way) another person's land for limited purposes. A common example is a utility company's right to run wires or lay pipe across a property.

Equity
The difference between the price for which a property could be sold and the total debts registered against the property. 

Encroachment
An intrusion onto an adjoining property. Common examples are a neighbour's fence, storage shed, or overhanging roofline that partially (or even fully) intrudes onto your property.


F

Foreclosure
A legal process by which the lender takes possession and ownership of a property when the borrower does not meet the mortgage obligations.


H

Holdback
The amount of money withheld by the lender during construction of a property to ensure that construction at every state is satisfactory. A holdback can also be negotiated between the buyer and seller prior to completion if there is an unexpected event such as water ingress or another deficiency that cannot be assessed until a later date. It is usually held in trust by the buyer's lawyer.


I

Interest
The price paid to rent money. The rate of interest over a period of time for a specific amount of money, usually expressed as a percentage.

Interest Rate
The percentage which is charged for the use of borrowed money.

Interest Adjustment Date 
The date on which the mortgage really begins, usually the first of the month. The interest owed for the number of days between the closing date and the last day of the month is paid on the closing date by cheque or by deduction from the mortgage advance and covers


J

Joint Tenancy
Property held by two or more persons with an undivided interest. If one owner dies, the property passes automatically to the other(s).


L

Land Transfer Tax
Payment to the provincial government for transferring property from the seller to the buyer. See Property Transfer Tax.


Lease to Purchase Option
Buying a piece of property by renting for a specified period, usually one year, with the provision that you will purchase the property at the end of that period for a predetermined sale price.

Liabilities
Outstanding debts of an individual. Mortgages, loans, credit card balances.

Lien
A legal claim against a property filed to ensure payment of debt.

Listing
A written agreement between a property owner and a real estate representative authorizing the agency to offer the owner's real property for sale.

Loan-to-Value Ratio
The ratio of the loan to the lending value of a property presented as a percentage. For example, the loan-to-value ratio of a loan for $75,000 on a home which costs $100,000 is 75%.

Lump Sum Prepayment: An extra payment made to reduce the principal balance of a mortgage (with or without penalty). A closed mortgage typically restricts lump sum payments. However, with open mortgages, a lump sum prepayment can be made without penalty.

Adjustment Date to Counter Offer

Market Value to Operating Costs

P.I.T.H. (Principal, Interest, Taxes and Heating) to Zoning Regulations