mortgage

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the mortgage section

Term

The length of the current mortgage agreement. A mortgage may be amortized over a long period (such as 40 years) with a shorter term (six months to five years or more). After the term expires, the balance of the principal then owing on the mortgage can be repaid or a new mortgage agreement can be entered into at the then current interest rates.

Variable Rate Mortgage

A mortgage for which the rate of interest may change if other market conditions change. This is sometimes referred to as a floating rate mortgage.

Vendor Take Back Mortgage

A mortgage which a vendor of real property takes from the purchaser usually as part payment of the purchase price for that property.

Wrap Around Mortgage

(Sometimes erroneously called a blanket mortgage)-a new mortgage, which is registered on title, which includes a prior existing mortgage ad the new mortgagee undertakes the responsibility as mortgagor under the original mortgage.

Realtor

A real estate agent, broker or an associate who holds active membership in a local real estate board that is affiliated with the National Association of Realtors.

Refinance

The process of paying off one loan with the proceeds from a new loan using the same property as security.

Refinancing

Renegotiating your existing mortgage agreement. May include increasing the principal or paying out the mortgage in full.

Renewal

At the end of a mortgage term, the mortgage may "roll over" on new terms and conditions acceptable to both the lender and the borrower. This is known as renewing a mortgage. Otherwise, the lender is entitled to be repaid in full. In this case, the borrower may seek alternative financing.

Reverse Mortgage

A mortgage in which a homeowner, usually an elderly or retired person, borrows money in the form of annual payments which are charged against the equity of the home.

Revolving Debt

A credit arrangement, such as a credit card, that allows a customer to borrow against a preapproved line of credit when purchasing goods and services. The borrower is billed for the amount that is actually borrowed plus any interest due.

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