Here's a rundown on the industry buzzwords. It's easier than you think.

AMORTIZATION

The length of time that it will take to repay the mortgage in full, assuming the rate and mortgage payment stays the same. The maximum amortization allowed for insured mortgages is 25 years and 30 years for conventional. 

COLLATERAL CHARGE

A collateral charge is a type of charge on the title. This type can be re-advanceable and allow you to increase your mortgage amount in the future without incurring legal fees. However, there may be negatives. These negatives include the bank’s ability to register other personal debts onto the title and charge legal fees to switch out of the mortgage. Speak to BOSI Financial today to see if this applies to you.

CONVENTIONAL MORTGAGE

When a borrower puts 20% down or more on purchasing a home, typically, no insurance fee is paid. 

HIGH RATIO

When a borrower puts less than 20% down on the purchase of their home. A high ratio loan must pay insurance premiums. The schedule is as follows: 

5% - 9.99% Down Payment: 4.00% premium

10% - 14.99% Down Payment: 3.10% premium

15% - 19.99% Down Payment: 2.80% premium

In most cases, homeowners add insurance premiums to their mortgage.

LOAN TO VALUE

The loan to value is the balance of the loan outstanding to the value of the home. For example, if your home is worth $500,000 and you hold a mortgage of $400,000, your loan to value is 80%.

MORTGAGE

A mortgage is basically a debt secured by a property. A common misconception is thinking a line of credit is not a mortgage. A line of credit is a type of mortgage. 

PORT

Port is defined as the ability to move your mortgage from one house to the next. The benefit of this feature is to keep your existing term and to avoid a payout penalty. You may add additional funds with the help of BOSI Financial. Porting privileges are typically 0 - 120 days from the sale of your existing home to your new home’s purchase. 

PRE-PAYMENT

A pre-payment is the ability to make lump sum payments onto your mortgage to bring down the outstanding mortgage balance. Pre-payments typically allow you to place 10-20% of the original mortgage as a lump sum onto your balance once per year and to increase your monthly mortgage payment by 10-20% each year. 

PAYOUT PENALTY

The cost to payout or break your mortgage mid-term.

RENEWAL DATE

The renewal date is the last day of the term of the mortgage. You may renegotiate your mortgage at this time and even switch lenders if your current lender is not provided the best terms. BOSI Financial can help you with your renegotiation.

STANDARD CHARGE

This type of charge is a single advancement of funds. The benefit of a standard charge is that there are no fees to switch lenders on your renewal date.

TERM

Length of time during which the specific mortgage agreement is effective. When the term expires, the principal’s balance is repaid in full, or the mortgage is renegotiated at current market rates. Your rate and mortgage payment is guaranteed for the term.

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