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Lenders & Industry
An A lender is a bank, trust company, or other federally or provincially regulated mainstream lender that offers mortgages to borrowers who meet standard credit, income, and debt-ratio requirements at the lowest available rates.
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Qualification & Ratios
Add-backs are non-cash or one-time expenses a lender adds back to a self-employed borrower’s net income reported on their Notice of Assessment, producing a higher qualifying income than the bottom-line figure the borrower actually claimed for tax purposes.
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Mortgage Types & Features
An adjustable-rate mortgage (ARM) is a variable-rate mortgage where the payment amount itself rises or falls every time the lender’s prime rate changes, rather than staying fixed for the term.
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Closing & Legal
An Agreement of Purchase and Sale (APS) is the legally binding contract between a buyer and seller that sets out the purchase price, deposit, closing date, and any conditions — such as financing or inspection — that must be satisfied before the deal becomes firm.
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Regulation & Compliance
The AMF (Autorité des marchés financiers) is Quebec’s financial sector regulator, overseeing courtiers hypothécaires (mortgage brokers) under the province’s Act respecting the distribution of financial products and services.
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Rates, Terms & Payments
Amortization is the total length of time it will take to pay off a mortgage in full through regular payments, assuming the rate and payment stay unchanged. For insured mortgages, federal rules cap it at 25 years, extendable to 30 years only for eligible first-time buyers and buyers of new builds.
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Rates, Terms & Payments
The Annual Percentage Rate (APR) is the mortgage’s interest rate plus most other mandatory costs of borrowing, expressed as a single annual percentage — giving borrowers a fuller, all-in cost of borrowing than the interest rate alone.
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Closing & Legal
An appraisal is a licensed appraiser’s professional opinion of a property’s market value, used by a lender to confirm the home is worth enough to support the mortgage, expressed as an appraised value that may differ from the purchase price.
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Lenders & Industry
An Appraisal Management Company (AMC) is an independent intermediary that lenders and brokerages use to order, assign, and quality-check property appraisals, keeping the lender and the appraiser at arm's length from each other.
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Closing & Legal
Arrears is the total amount of missed mortgage payments a borrower currently owes a lender; falling into arrears is usually the first stage of mortgage default, before more serious enforcement steps begin.
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Closing & Legal
An assignment (or assignment sale) happens when the original buyer of a property — typically a pre-construction condo or home — sells their rights and obligations under the purchase agreement to a new buyer before the original closing date, without ever taking title themselves.
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Closing & Legal
An assignment of rents is a security document, usually registered alongside a mortgage or charge, that gives the lender the right to collect rent directly from a property's tenants if the borrower defaults.
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Mortgage Types & Features
An assumable mortgage lets a qualified buyer take over the seller’s existing mortgage — including its rate, term, and remaining amortization — instead of arranging new financing, subject to the lender's approval of the buyer.
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Closing & Legal
An Automated Valuation Model (AVM) is a computer-generated estimate of a property’s market value, produced from recent comparable sales and property data instead of an in-person appraisal, that lenders and insurers use to confirm value quickly on lower-risk files.
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Renewals, Refinancing & Penalties
Automatic renewal is the default outcome if a borrower takes no action by the mortgage’s maturity date: the lender rolls the mortgage into a new term, commonly at its posted rate rather than a negotiated discounted rate. It keeps the mortgage from technically going unsecured, but it is rarely the borrower’s best financial outcome.
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Lenders & Industry
A B lender is an alternative mortgage lender — often a trust company or other non-bank institution — that serves borrowers who don’t meet an A lender’s standard credit, income, or ratio requirements, usually at a higher rate and with a lender fee.
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Lenders & Industry
A balance sheet lender funds mortgages using its own capital or deposit base and holds the resulting loans on its own books, rather than selling them into securitized pools. This is the traditional deposit-funded lending model, most associated with banks and credit unions.
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Rates, Terms & Payments
The Bank of Canada policy rate — also called the overnight rate — is the interest rate the central bank targets for overnight lending between financial institutions, set at scheduled announcement dates; it is the single biggest driver of variable mortgage pricing in Canada, and an indirect influence on fixed rates.
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Rates, Terms & Payments
A basis point (often written “bps”) is one one-hundredth of one percentage point — 0.01% — the standard unit lenders, brokers, and the Bank of Canada use to describe small, precise changes in interest rates.
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Regulation & Compliance
BCFSA (the BC Financial Services Authority) is British Columbia’s regulator for mortgage brokering, licensing submortgage brokers and brokerages under the Mortgage Brokers Act.
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Credit & Documents
The Beacon score is Equifax Canada’s credit scoring model, producing a number generally between 300 and 900 from the data in a borrower’s credit report; it is one of the most commonly referenced credit scores in Canadian mortgage underwriting.
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Regulation & Compliance
Beneficial ownership identifies the real individual (or individuals) who ultimately own or control a corporation, trust, or other entity — as distinct from whoever holds legal title — and is a core part of the know-your-client checks brokers must run on business borrowers.
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Renewals, Refinancing & Penalties
Blend and extend is a lender option that combines a mortgage’s existing contract rate with the current rate for a new, longer term, producing a single blended rate. Instead of charging a lump-sum prepayment penalty, the cost of breaking the old term is folded into the new rate.
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Rates, Terms & Payments
A blended payment is a fixed periodic mortgage payment that combines principal and interest into a single amount, so the borrower pays the same figure each period even though the split between the two changes over time. Early in the amortization, most of the payment covers interest; later payments are increasingly principal.
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Renewals, Refinancing & Penalties
A bona fide sales clause is a mortgage restriction that ties the borrower to the lender for the full term, allowing early discharge only if the property is sold in a genuine, arm's-length sale — not through a refinance, private transfer, or sale to a related party.
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Qualification & Ratios
A borrowed down payment — sometimes marketed as a “flex down” option — is a down payment funded in whole or in part through borrowed money, such as a personal loan or line of credit, rather than the borrower’s own savings or a gift, and is only permitted by some Canadian lenders and insurers under specific conditions.
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Mortgage Types & Features
Bridge financing is short-term, interest-only borrowing that covers the gap between the closing date of a homebuyer's new purchase and the closing date of the sale of their current home, secured against the expected proceeds of that pending sale.
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Lenders & Industry
The broker channel is the distribution network of independent mortgage brokerages, agents, brokers, and associates through which a lender originates mortgages, as distinct from that lender’s own direct or branch channel. Lenders active in the broker channel typically assign a BDM to support broker relationships in each territory.
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Lenders & Industry
A broker fee is a fee a mortgage broker or brokerage charges the client directly — separate from any commission the lender pays the brokerage — and must be disclosed in writing before the deal closes.
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Mortgage Types & Features
A bundled mortgage pairs a conventional first mortgage from a bank or B lender with a second mortgage from a separate lender — often a Mortgage Investment Corporation — funded together at closing to cover a shortfall the first lender's loan-to-value limit won't reach.
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Lenders & Industry
A Business Development Manager (BDM) is the lender-side representative assigned to support mortgage brokers in a territory — answering scenario and policy questions, helping structure deals, and connecting brokers to underwriting when a file needs a second look. A BDM is the broker’s day-to-day point of contact at the lender, distinct from the underwriter who actually assesses and approves the file.
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Qualification & Ratios
Business-for-self (BFS) describes a borrower who is self-employed or owns a controlling interest in their business, and whose qualifying income is typically established from Notices of Assessment and financial statements rather than an employer pay stub.
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Default Insurance & Protection
Canada Guaranty is a private mortgage default insurer, one of the three insurers approved to provide mortgage default insurance in Canada alongside CMHC and Sagen.
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Lenders & Industry
Canada Mortgage Bonds (CMBs) are CMHC-guaranteed bonds issued by the Canada Housing Trust to fund pools of insured mortgages purchased from approved lenders, giving lenders a lower-cost source of funding that helps keep fixed mortgage rates competitive.
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Qualification & Ratios
The cap rate (capitalization rate) measures a rental or commercial property's annual net operating income (NOI) as a percentage of its purchase price or market value, letting investors compare income properties independent of how each one is financed.
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Mortgage Types & Features
A cash-back mortgage pays the borrower a lump sum at closing, often a percentage of the mortgage amount, in exchange for a higher interest rate than a comparable mortgage without cash back.
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Regulation & Compliance
CASL (Canada’s Anti-Spam Legislation) is the federal law requiring consent before sending a commercial electronic message, along with clear sender identification and a working unsubscribe mechanism — rules that apply to the marketing emails and texts a mortgage brokerage sends to leads and clients.
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Mortgage Types & Features
A chattel mortgage is a loan secured against personal property — most often a manufactured or mobile home that isn't permanently affixed to land the owner holds title to — registered under a province's Personal Property Security Act instead of against the land itself.
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Mortgage Types & Features
A closed mortgage restricts how much of the balance can be prepaid before the term ends — beyond the lender’s prepayment privileges, paying it off early typically triggers a prepayment penalty — in exchange for a lower rate than an open mortgage.
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Closing & Legal
Closing costs are the one-time fees and disbursements a buyer pays when a real estate purchase legally completes, separate from the down payment — typically covering legal fees, title insurance, land transfer tax, and adjustments owed to the seller.
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Default Insurance & Protection
CMHC (Canada Mortgage and Housing Corporation) is Canada’s federal housing agency and one of three insurers approved to provide mortgage default insurance on high-ratio mortgages, alongside Sagen and Canada Guaranty.
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Default Insurance & Protection
CMHC MLI Select is a CMHC multi-unit mortgage loan insurance program for rental properties that offers preferential insurance terms — such as extended amortization or premium treatment — to projects that meet CMHC’s criteria for affordability, energy efficiency, or accessibility, scored on a points system set entirely by CMHC.
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Qualification & Ratios
A co-borrower is a person who applies for a mortgage jointly with another borrower, sharing both ownership of the property and full responsibility for repayment from the outset of the application, most often a spouse, partner, or family member buying together.
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Qualification & Ratios
A co-signer — also called a co-borrower — is added directly to a mortgage application and the property’s title, sharing both ownership and full responsibility for repayment. Unlike a guarantor, a co-signer has an equity stake in the home.
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Mortgage Types & Features
A collateral charge is a mortgage registered against a property for an amount that can be higher than the loan actually advanced, securing the initial mortgage plus potential future borrowing, such as a HELOC, all under one registration.
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Rates, Terms & Payments
A commitment fee is a charge some lenders apply to guarantee that funds will be available, or to hold approved terms for a set period — most often seen on construction, commercial, or extended-hold mortgage financing rather than standard residential deals.
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Credit & Documents
Conditional approval is a lender’s decision to fund a mortgage once specific outstanding items are satisfied — such as a satisfactory appraisal, updated income documents, or proof of down payment — rather than an unconditional commitment to lend.
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Credit & Documents
Conditions of approval are the specific outstanding items — such as an appraisal, updated income documents, or proof of down payment — that a borrower or broker must satisfy before a conditional approval becomes a firm commitment letter.
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Mortgage Types & Features
A construction (draw) mortgage is financing advanced in stages, or “draws,” as a new home or major renovation project reaches agreed construction milestones, rather than as a single lump sum at closing.
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Closing & Legal
A construction holdback is the portion of each progress-draw payment that a lender withholds during a construction mortgage, in an amount and for a period set by provincial construction or builders’ lien legislation, to protect the property against unpaid subtrades and suppliers registering a lien.
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Regulation & Compliance
Continuing education (CE) is the mandatory ongoing training mortgage brokers, agents, and associates must complete on a regulator-set cycle to keep their provincial licence active, typically covering ethics, regulatory updates, and product knowledge.
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Mortgage Types & Features
A conventional (low-ratio) mortgage is one where the down payment is 20% or more of the purchase price, so the loan-to-value ratio is 80% or below and mortgage default insurance generally isn’t required.
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Mortgage Types & Features
A convertible mortgage is a short closed term — often six months to a year — that lets the borrower convert into a longer fixed-rate term with the same lender before it matures, without paying the full prepayment penalty.
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Regulation & Compliance
Cost of borrowing disclosure is the written statement a lender must give a borrower before a mortgage is finalized, setting out the total interest cost over the term, the annual percentage rate (APR), and all required fees in a standard, comparable format.
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Lenders & Industry
A courtier hypothécaire is the title for a licensed mortgage broker in Quebec, regulated by the Autorité des marchés financiers (AMF).
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Closing & Legal
A covenant is a formal promise contained in a mortgage or registered against a property's title — either a borrower's personal covenant to repay the debt, or a restrictive covenant limiting how the land may be used.
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Credit & Documents
A credit report is a detailed record of a borrower’s credit accounts, payment history, balances, and public records, compiled by a credit bureau — in Canada, primarily Equifax Canada or TransUnion — and pulled by lenders to assess mortgage risk.
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Credit & Documents
A credit score is a three-digit number summarizing the risk in a borrower’s credit report; in Canada, scores from Equifax generally range from 300 to 900, with a higher number indicating a stronger credit history.
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Lenders & Industry
A credit union is a member-owned, provincially regulated financial cooperative that offers mortgages and other banking products to its members, often with more locally tailored underwriting than a national bank.
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Credit & Documents
Credit utilization is the percentage of a borrower’s available credit currently being used, calculated by dividing total balances by total credit limits across revolving accounts such as credit cards and lines of credit; it is one of the factors reflected in a borrower’s credit score.
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Regulation & Compliance
The criminal interest rate is the maximum annual percentage rate any lender in Canada — including private and alternative mortgage lenders — may legally charge, capped at 35% APR under the Criminal Code, effective January 1, 2025.
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Qualification & Ratios
The debt service coverage ratio (DSCR) measures whether a rental or commercial property's net operating income is sufficient to cover its total annual mortgage debt payments, calculated as net operating income divided by annual debt service.
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Qualification & Ratios
Debt service ratios — Gross Debt Service (GDS) and Total Debt Service (TDS) — are the two calculations Canadian lenders use to test whether a borrower’s income can support a mortgage. Insured mortgages generally require a maximum GDS of 39% and TDS of 44%.
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Renewals, Refinancing & Penalties
A debt-consolidation refinance is a mortgage refinance where a borrower increases their mortgage balance to pay off higher-interest debts — such as credit cards or personal loans — rolling them into the mortgage at a typically lower blended interest rate. It follows the same qualification rules as any equity take-out refinance.
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Closing & Legal
A deposit is the sum of money a buyer submits with a signed purchase offer to show good faith, held in a real estate brokerage’s or lawyer’s/notary’s trust account until closing, when it is applied toward the purchase price and down payment.
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Closing & Legal
Dower rights, created by Alberta's Dower Act, are the statutory rights a non-owning spouse holds in the couple's homestead — requiring that spouse's signed consent before the owning spouse can sell, mortgage, or lease the property.
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Qualification & Ratios
A down payment is the portion of a home’s purchase price a buyer pays upfront from their own funds, with the mortgage covering the rest. Canada’s minimum is tiered: 5% of the first $500,000, 10% of the portion from $500,000 to $1.5 million, and 20% at $1.5 million and above.
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Renewals, Refinancing & Penalties
Early renewal is signing a new mortgage term before the current one matures, usually to lock in a rate ahead of an expected increase or to restructure the mortgage sooner than the contract requires. Because the existing term hasn’t ended, most lenders charge a prepayment penalty to break the old contract unless it is waived or blended into the new rate.
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Closing & Legal
An easement is a registered right allowing someone other than the property owner to use a defined part of the land for a specific purpose — such as a utility line, shared driveway, or right-of-way — that continues to bind the property no matter who owns it.
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Closing & Legal
An encroachment is a physical structure or improvement — a fence, shed, or roofline, for example — that extends over a property line onto a neighbouring lot or a public right-of-way, usually discovered through a survey or real property report.
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Closing & Legal
An encumbrance is any registered claim, charge, or restriction against a property's title — including mortgages, liens, easements, and restrictive covenants — that can affect ownership rights or the property's marketability.
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Renewals, Refinancing & Penalties
An equity take-out refinance replaces an existing mortgage with a new, larger one secured against the same property, letting the borrower access some of the equity built up as a lump sum of cash. The new mortgage pays off the old one, and the difference — up to the lender’s maximum loan-to-value ratio — is advanced to the borrower.
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Regulation & Compliance
Errors & Omissions (E&O) insurance is professional-liability coverage that protects a mortgage brokerage, broker, or agent against claims of negligence or mistakes in the advice and paperwork given to a client, and is a mandatory licensing requirement in every Canadian mortgage-brokering jurisdiction.
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Closing & Legal
An estoppel certificate is a signed statement from a landlord, tenant, or condominium corporation confirming key facts — such as rent owing, term remaining, or fees due — that a buyer or lender can rely on when financing an income property or condo unit.
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Lenders & Industry
An exit strategy is a private-lending borrower’s documented plan for how and when a short-term loan will be repaid — typically through refinancing to a conventional lender, a property sale, or another confirmed source of funds.
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Regulation & Compliance
The FCAA (Financial and Consumer Affairs Authority of Saskatchewan) is the provincial regulator responsible for licensing and overseeing mortgage brokerages, brokers, and associates in Saskatchewan.
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Regulation & Compliance
The Financial Consumer Agency of Canada (FCAC) is the federal regulator that supervises federally regulated banks and lenders for compliance with consumer-protection and disclosure rules, including mortgage cost-of-borrowing disclosure.
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Regulation & Compliance
FCNB (the Financial and Consumer Services Commission of New Brunswick) is the provincial regulator that licenses and oversees mortgage brokerages, brokers, associates, and administrators under New Brunswick's Mortgage Brokers Act.
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Closing & Legal
Fee simple is the most complete form of property ownership recognized in Canada's common-law provinces — the owner holds the land indefinitely and can sell, mortgage, lease, or pass it on, subject only to registered encumbrances, easements, and government rights such as taxation.
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Lenders & Industry
Filogix, branded Filogix Expert, is the dominant deal-submission platform used by Canadian mortgage brokers to send applications, documents, and conditions to lenders electronically.
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Lenders & Industry
A finder’s fee is the commission a lender pays a mortgage brokerage when a mortgage the brokerage originated and submitted successfully funds. It is the core source of brokerage revenue on most deals, paid by the lender rather than the borrower, and is separate from any lender fee charged directly to the client.
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Regulation & Compliance
FINTRAC (the Financial Transactions and Reports Analysis Centre of Canada) is Canada’s financial intelligence unit. It requires mortgage brokers and lenders to meet anti-money-laundering (AML) obligations — client identification, record-keeping, and reporting of suspicious transactions.
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Buyer Programs & Taxes
The First Home Savings Account (FHSA) is a registered savings account that lets eligible first-time buyers contribute up to $8,000 per year, to a $40,000 lifetime limit, with contributions tax-deductible and qualifying withdrawals tax-free.
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Qualification & Ratios
The Five Cs of Credit — Character, Capacity, Capital, Collateral, and Conditions — is the framework underwriters use to evaluate a mortgage application beyond a single ratio or score.
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Mortgage Types & Features
A fixed-rate mortgage locks in one interest rate for the entire term, so the principal-and-interest portion of the payment stays identical from the first payment to the last. In Canada, fixed mortgage rates are conventionally compounded semi-annually, not in advance.
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Closing & Legal
Foreclosure is a court-supervised process through which a lender can ultimately take ownership of a defaulted property, used instead of power of sale in provinces where mortgage law follows a judicial process.
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Buyer Programs & Taxes
The federal Prohibition on the Purchase of Residential Property by Non-Canadians Act (the “foreign buyer ban”) restricts non-Canadians from purchasing residential property in Canada; it has been in force since January 1, 2023 and has been extended to January 1, 2027.
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Regulation & Compliance
FSRA (the Financial Services Regulatory Authority of Ontario) is Ontario’s provincial regulator for mortgage brokering, licensing mortgage agents, brokers, and brokerages. Since April 1, 2023, Ontario has used a two-level agent licensing system, Level 1 and Level 2.
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Lenders & Industry
A funding ratio, also called an efficiency ratio or pull-through rate, is the percentage of mortgage applications a broker or brokerage submits to lenders that actually fund. It is calculated as deals funded ÷ deals submitted, and lenders track it as one measure of how well-qualified and complete a broker’s submissions tend to be.
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Credit & Documents
A gift letter is a signed statement from a donor — typically an immediate family member — confirming that funds given toward a down payment are a true gift with no repayment expected, which Canadian lenders require before counting gifted funds toward the purchase.
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Rates, Terms & Payments
Government of Canada bond yields are the returns investors require to hold federal government bonds of a given term, and they are the primary benchmark fixed-rate mortgages are priced against in Canada — the 5-year bond yield in particular tracks closely with 5-year fixed-rate mortgage pricing.
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Qualification & Ratios
The Gross Debt Service (GDS) ratio is the percentage of a borrower’s gross annual income needed to cover housing costs — mortgage principal and interest, property taxes, heat, and 50% of any condo fees. For insured mortgages in Canada, lenders generally require a GDS of 39% or less, calculated at the qualifying rate.
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Buyer Programs & Taxes
The GST/HST new housing rebate lets an individual recover part of the GST, or the federal part of the HST, paid on a new or substantially renovated home bought or built as a primary residence, and is generally available in full only where the home’s fair market value is under $450,000.
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Qualification & Ratios
A guarantor is a person who promises to repay a mortgage if the primary borrower defaults, strengthening a weak application without being added to the property’s title. Guarantors are commonly used when a borrower’s income or credit history alone doesn’t meet a lender’s requirements.
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Regulation & Compliance
Guideline B-20 is OSFI’s Residential Mortgage Underwriting Practices and Procedures guideline for federally regulated lenders. It’s best known for the minimum qualifying rate — the stress test — that sets the rate a borrower must qualify at, not the rate they actually pay.
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Mortgage Types & Features
A halal mortgage is a Sharia-compliant home-financing structure — such as murabaha (cost-plus sale), ijara (lease-to-own), or musharaka (co-ownership) — designed to avoid charging or paying interest (riba), as prohibited under Islamic law, offered in Canada by a small number of specialized providers.
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Mortgage Types & Features
A high-ratio mortgage is one where the down payment is less than 20% of the purchase price, meaning the loan-to-value ratio exceeds 80% — which requires mortgage default insurance in Canada.
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Buyer Programs & Taxes
The Home Buyers’ Plan (HBP) is a federal program letting eligible first-time (and some repeat) buyers withdraw up to $60,000 from their RRSP tax-free to put toward a home purchase, repayable to the RRSP over 15 years.
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Qualification & Ratios
Home equity is the portion of a property's market value that belongs to the owner outright — the difference between the property's current value and the total balance owed against it.
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Mortgage Types & Features
A Home Equity Line of Credit (HELOC) is a revolving line of credit secured against home equity, usually registered as a collateral charge, that lets a borrower draw funds, repay them, and draw again up to an approved limit without applying for a new loan each time.
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Closing & Legal
A home inspection is a visual, non-invasive assessment of a resale property's condition — structure, roof, electrical, plumbing, heating, and similar major systems — typically performed by a professional inspector on the buyer's behalf before finalizing a purchase.
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Mortgage Types & Features
A hybrid, or combination, mortgage splits the total loan amount into two or more portions — typically one at a fixed rate and one at a variable rate — each tracked and renewed separately, with a single blended payment covering both. It lets a borrower hedge between rate types instead of choosing only one.
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Qualification & Ratios
Income gross-up is a method some Canadian lenders use to increase a borrower’s qualifying income above the amount actually received, applied to non-taxable income sources — such as certain benefit or disability payments — before calculating GDS and TDS.
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Closing & Legal
Independent legal advice (ILA) is legal advice a person receives from their own lawyer — one who has no conflict of interest and does not represent the lender, borrower, or any other party to the transaction — before signing a mortgage document that affects their legal rights.
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Mortgage Types & Features
An insurable mortgage is a conventional (low-ratio) mortgage that still meets an insurer’s eligibility criteria for portfolio (bulk) insurance, even though the borrower isn’t required to buy individual default insurance.
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Mortgage Types & Features
An insured mortgage carries mortgage default insurance, which protects the lender — not the borrower — if the loan goes into default. It’s required whenever the down payment is under 20%, and only available on homes priced under the insured cap.
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Mortgage Types & Features
An inter alia, or blanket, mortgage is a single mortgage registered as security against more than one property at the same time, rather than one mortgage per property. If the borrower defaults, the lender can look to any or all of the pledged properties to recover the debt.
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Rates, Terms & Payments
The Interest Adjustment Date (IAD) is the date interest begins accruing on a new mortgage, sitting between closing/funding and the day before the borrower’s first regular payment; interest for that short gap is collected separately as an interest adjustment, not folded into the first regular payment.
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Renewals, Refinancing & Penalties
The interest rate differential (IRD) is a prepayment penalty formula that charges the difference between a mortgage’s contract rate and the lender’s current comparison rate, applied to the outstanding balance for the time remaining in the term. It typically applies to fixed-rate mortgages broken before maturity, and is charged only if it is larger than three months’ interest.
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Lenders & Industry
An interest reserve is a portion of a loan — common in private and construction lending — that the lender holds back at closing and uses to make the borrower’s interest-only payments directly, instead of relying on the borrower to pay from their own cash flow.
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Mortgage Types & Features
An interest-only mortgage requires the borrower to pay only the interest charged each period, with no portion of the payment reducing the principal balance, usually for a defined introductory period before regular principal-and-interest payments begin (or until the loan is renewed, refinanced, or paid out in full). The outstanding balance does not shrink during the interest-only period.
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Closing & Legal
Interim occupancy fee is the monthly amount a pre-construction condo buyer in Ontario pays the builder between taking possession and the building's final registration, covering interest on the unpaid purchase price, estimated common expenses, and estimated property taxes.
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Mortgage Types & Features
An investment (rental) property mortgage finances a property the borrower does not intend to live in, which lenders and mortgage insurers generally treat as higher risk than an owner-occupied home — often requiring a larger down payment and stricter qualification.
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Closing & Legal
Joint tenancy is a form of co-ownership in which two or more owners hold an equal, undivided interest in the entire property, with the right of survivorship meaning a deceased owner's share passes automatically to the surviving owner(s) rather than through their estate.
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Closing & Legal
Judicial sale is a court-supervised method of selling a mortgaged property after default, used in British Columbia, Alberta, and several other provinces, in which a court approves the listing, the accepted offer, and the final sale before it can close.
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Closing & Legal
Land titles system is a government-administered land registration system, based on the Torrens model, in which the government maintains and guarantees an official record of who owns a property and what charges are registered against it, distinct from the older deed-based registry system still used in parts of Atlantic Canada and northern Ontario.
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Closing & Legal
Land transfer tax is a one-time provincial (and sometimes municipal) tax paid on closing when a property changes ownership, calculated using tiered rates that rise with the purchase price; eligible first-time buyers can claim a partial rebate of up to $4,000 in Ontario and up to $4,475 in Toronto.
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Regulation & Compliance
A Large Cash Transaction Report (LCTR) is a mandatory report that certain reporting entities, including some in the mortgage sector, must file with FINTRAC whenever they receive $10,000 or more in cash in a single transaction, or in two or more related cash transactions within 24 hours.
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Closing & Legal
Leasehold is a form of property tenure in which the buyer owns the building or unit but holds only a long-term lease — often 60, 99, or more years — on the underlying land, rather than owning the land itself as with a freehold property.
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Lenders & Industry
A lender fee is a charge a lender bills directly to the borrower, separate from any commission the lender pays the brokerage. It typically covers file setup, administration, or a specific underwriting exception, and is more common on alternative and private mortgages than on conventional insured lending.
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Qualification & Ratios
Lending value is the property value a lender actually uses to calculate the loan-to-value ratio and maximum mortgage amount — generally the lesser of the purchase price and the appraised or assessed value — rather than a figure the borrower or seller may quote.
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Credit & Documents
A letter of employment is a document from a borrower’s employer confirming job title, employment status, length of service, and income, used by Canadian lenders to verify that a stated salary or wage is accurate and ongoing.
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Closing & Legal
A lien is a legal claim registered against a property’s title that secures a debt or obligation — such as an unpaid mortgage, contractor’s bill, or tax debt — giving the claimant a right to be paid from the property, typically before it can be sold or refinanced with clear title.
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Qualification & Ratios
The loan-to-value (LTV) ratio is the mortgage amount expressed as a percentage of the property’s purchase price or appraised value, whichever is lower. Canadian minimum down payment rules allow an LTV as high as 95% on the first $500,000 of price, tightening to 80% LTV (20% down) at $1.5 million and above.
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Closing & Legal
Matrimonial home is the property that a married couple ordinarily occupies as their family residence, which receives special statutory protection under provincial family law — in Ontario, both spouses have an equal right to possession regardless of whose name is on title.
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Renewals, Refinancing & Penalties
The maturity date is the day a mortgage’s current term ends and, contractually, the full remaining balance becomes due — unless the borrower renews, switches lenders, refinances, or pays the mortgage out in full before or on that date.
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Lenders & Industry
MBRCC, the Mortgage Broker Regulators' Council of Canada, is an inter-jurisdictional association of the provincial and territorial regulators responsible for licensing and overseeing mortgage brokers, agents, and brokerages across Canada.
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Qualification & Ratios
The minimum qualifying rate — commonly called the mortgage stress test — is the rate Canadian lenders must use to calculate a borrower’s GDS and TDS ratios. It is the greater of the borrower’s contract rate plus 2 percentage points, or 5.25%.
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Lenders & Industry
A monoline lender is a mortgage lender that distributes its mortgages exclusively through the broker channel, with no branch network, deposit accounts, or other retail banking products.
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Lenders & Industry
A mortgage administrator is a licensed company that services mortgages on behalf of investors or lenders who are not themselves set up to collect payments, manage arrears, or handle discharges. Mortgage administrators are common in private and syndicated mortgage lending, where individual investors fund a mortgage but need a licensed party to administer it.
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Lenders & Industry
A mortgage agent is Ontario’s license category for arranging mortgages, regulated by FSRA, with agents holding either a Level 1 or Level 2 license depending on their training and experience.
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Lenders & Industry
A mortgage associate is the license category in Alberta for an individual who arranges mortgages on behalf of clients, regulated by RECA (the Real Estate Council of Alberta) under a licensed mortgage brokerage.
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Lenders & Industry
A mortgage broker is a licensed professional or brokerage that arranges mortgage financing between borrowers and lenders in exchange for a fee or commission, rather than lending money directly.
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Lenders & Industry
A mortgage brokerage is the licensed firm under which individual mortgage professionals — mortgage agents, mortgage brokers, submortgage brokers, mortgage associates, or courtiers hypothécaires, depending on the province — are registered to arrange mortgages with lenders on behalf of clients. The brokerage itself, not just the individual, holds provincial licensing obligations.
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Credit & Documents
A mortgage commitment letter is a lender’s formal, signed offer to finance a specific property on stated terms — rate, amount, term, and any remaining conditions — once the file has cleared underwriting.
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Closing & Legal
Mortgage default occurs when a borrower fails to meet the terms of the mortgage agreement — most commonly by missing scheduled payments — giving the lender the right to pursue remedies set out in the mortgage and provincial law.
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Default Insurance & Protection
Mortgage default insurance (also called mortgage loan insurance) protects the lender — not the borrower — if a high-ratio borrower defaults, and it is mandatory whenever the down payment is less than 20% of the purchase price. In Canada it is sold by three approved insurers — CMHC, Sagen, and Canada Guaranty — and the premium is typically added to the mortgage principal.
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Renewals, Refinancing & Penalties
A mortgage discharge is the legal document a lender registers to remove its charge from a property’s title once the mortgage is paid off or replaced. Without it, the property remains encumbered on title even after the debt is gone; registering the discharge is typically handled by a lawyer or notary as part of closing.
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Lenders & Industry
A Mortgage Finance Company (MFC) is a non-deposit-taking lender that originates and funds mortgages — typically through the broker channel — using securitization and institutional capital rather than a retail deposit base.
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Regulation & Compliance
Mortgage fraud is knowingly providing false, altered, or misleading information or documents in connection with a mortgage application or transaction, ranging from a borrower inflating income to a fraudster impersonating a homeowner to obtain financing.
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Rates, Terms & Payments
The mortgage interest rate — also called the contract rate — is the annual percentage a lender charges to lend the money, and it’s what’s used to calculate the principal-and-interest portion of a borrower’s regular payment for the mortgage term.
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Lenders & Industry
A Mortgage Investment Corporation (MIC) is a pooled investment vehicle, defined under the federal Income Tax Act, that raises capital from investors and lends it out as mortgages — frequently private, higher-rate second mortgages — passing the income back to shareholders.
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Default Insurance & Protection
Mortgage life insurance (creditor insurance) is optional coverage, usually sold by the lender, that pays out toward the mortgage balance if the borrower dies or becomes disabled — it protects the borrower’s family, unlike mortgage default insurance, which protects the lender.
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Rates, Terms & Payments
A mortgage payment deferral is a temporary arrangement, granted at a lender’s discretion, that lets a borrower in genuine financial hardship pause regular mortgage payments for an agreed period. Interest continues to accrue during the deferral and is added to the outstanding balance, so the mortgage costs more overall and may take longer to pay off.
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Closing & Legal
A mortgage payout statement is a lender-issued document showing the exact amount required to fully discharge a mortgage on a specific date, including outstanding principal, accrued interest, and any applicable penalty or discharge fee.
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Qualification & Ratios
A mortgage pre-approval is a lender’s documented, conditional estimate of how much it will lend a borrower, based on verified income, credit, and debts, usually paired with a rate hold for a set period. It is more reliable than a pre-qualification but is not a guarantee of final financing.
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Qualification & Ratios
A mortgage pre-qualification is an informal, unverified estimate of how much a borrower might be able to afford, based on self-reported income, debts, and assets rather than documented proof. It is a starting point for house-hunting, not a lender commitment.
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Closing & Legal
Mortgage priority, or ranking, is the order in which multiple mortgages registered against the same property are paid out of sale or foreclosure proceeds — generally determined by the order of registration on title, so the first mortgage registered normally ranks ahead of a second mortgage or other later charge.
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Renewals, Refinancing & Penalties
Mortgage renewal is the process of signing a new contract — a new interest rate, term, and sometimes a new lender — when an existing mortgage term ends and the balance still isn’t paid off. CMHC estimates roughly 60% of all outstanding Canadian mortgages will renew by the end of 2026, making renewal one of the biggest volume moments in a broker’s book of business.
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Lenders & Industry
Mortgage securitization is the process of pooling multiple mortgages together and selling interests in that pool to investors as securities, rather than the originating lender holding every mortgage to maturity on its own balance sheet. It is a core funding mechanism for lenders — particularly monoline lenders — that do not fund mortgages primarily through deposits.
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Lenders & Industry
Mortgage servicing is the ongoing administration of a mortgage after it funds — collecting payments, tracking the balance and interest, confirming taxes and insurance are paid where required, and handling arrears or default — whether performed by the original lender or a separate mortgage administrator.
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Rates, Terms & Payments
The mortgage term is the length of the contractual agreement with a lender — covering the interest rate, payment terms, and conditions — after which the mortgage must be renewed, switched to another lender, or paid off in full; it is shorter than, and sits inside, the overall amortization period.
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Rates, Terms & Payments
Negative amortization happens when a mortgage payment no longer covers the full interest owed for the period, so the unpaid interest is added to the principal balance — meaning the amount owed grows instead of shrinks, even though payments continue on schedule.
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Qualification & Ratios
Net Operating Income (NOI) is the income a rental property generates after subtracting vacancy loss and operating expenses, but before mortgage payments, capital expenditures, or income tax — a core figure lenders use to assess a rental or investment property's cash flow.
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Qualification & Ratios
A net worth mortgage program qualifies a borrower based primarily on their overall net worth and assets rather than conventional income documentation, typically offered by B lenders and other alternative lenders for borrowers with substantial assets but limited provable income.
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Closing & Legal
New home warranty is mandatory, builder-provided coverage on newly built homes in Canada that protects buyers against construction defects for a set number of years, with the specific coverage periods, limits, and administering body varying by province.
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Buyer Programs & Taxes
New to Canada mortgage programs are lender and insurer offerings designed for newcomers with limited or no Canadian credit history, allowing them to qualify for insured financing using alternative proof of income, employment, and international or alternative credit references.
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Lenders & Industry
NHA Mortgage-Backed Securities (NHA MBS) are securities created under Canada’s National Housing Act, backed by pools of insured residential mortgages and guaranteed by CMHC. They let a lender sell a pool of insured mortgages to investors while continuing to service the underlying loans, turning mortgage assets into tradeable securities.
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Credit & Documents
A Notice of Assessment (NOA) is the Canada Revenue Agency’s summary of a filed tax return, showing reported income and any balance owing, and it is one of the standard documents Canadian lenders request to verify a borrower’s qualifying income.
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Mortgage Types & Features
An open mortgage lets a borrower prepay any amount, up to and including the full balance, at any time with no prepayment penalty, in exchange for a higher interest rate than a comparable closed mortgage.
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Regulation & Compliance
OSFI (the Office of the Superintendent of Financial Institutions) is the federal regulator that supervises federally regulated banks and mortgage lenders, setting prudential underwriting rules such as the minimum qualifying rate through Guideline B-20. OSFI does not license individual mortgage brokers or agents — that falls to the provincial regulators.
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Rates, Terms & Payments
Payment frequency is how often a borrower makes mortgage payments — monthly, semi-monthly, bi-weekly, or weekly — and whether that schedule is “regular” (simply the monthly amount split up) or “accelerated” (calculated so the borrower makes roughly one extra monthly payment every year, shortening the amortization).
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Regulation & Compliance
PIPEDA (the Personal Information Protection and Electronic Documents Act) is the federal law governing how private-sector organizations, including mortgage brokerages, collect, use, and disclose clients’ personal information.
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Qualification & Ratios
PITH stands for Principal, Interest, Taxes, and Heat — the four monthly housing costs Canadian lenders add together, plus 50% of any condo fees, to calculate the Gross Debt Service ratio.
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Regulation & Compliance
A Politically Exposed Person (PEP) is an individual who holds, or has held, a prominent public office domestically or in a foreign country, along with certain family members and close associates, who is subject to enhanced identity and source-of-funds due diligence under Canada's anti-money-laundering rules.
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Default Insurance & Protection
Portfolio insurance (also called bulk insurance) is default insurance a lender purchases on a pool of otherwise-conventional, low-ratio mortgages after closing — typically to make those loans eligible for cheaper securitized funding — rather than insurance the borrower requests or pays for directly.
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Renewals, Refinancing & Penalties
Porting is transferring an existing mortgage — its rate, term, and balance — from one property to another when a borrower sells and buys, avoiding the prepayment penalty that would otherwise apply to breaking the contract early.
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Rates, Terms & Payments
The posted rate is a lender’s official, publicly listed interest rate for a given mortgage product and term — the starting point most Canadians never actually pay, since the contract rate is typically negotiated down from it.
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Closing & Legal
A postponement agreement, called a priority agreement in some western provinces, is a legal document in which a mortgagee agrees to rank its claim against a property behind another mortgagee's claim, changing the normal order of priority that would otherwise apply based on registration date.
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Closing & Legal
A power of attorney (POA) is a legal document in which one person, the grantor, authorizes another person, the attorney, to act on their behalf — including, in some circumstances, signing mortgage or real estate documents — within the scope and conditions the document sets out.
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Closing & Legal
Power of sale is a legal remedy that lets a lender sell a property after default without taking ownership of it first, under authority granted directly in the mortgage document rather than through a full court foreclosure action; it is the typical remedy in provinces such as Ontario.
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Renewals, Refinancing & Penalties
A prepayment penalty is the charge a lender applies when a borrower pays off or pays down a closed mortgage beyond its prepayment privileges before the term ends. Canadian lenders generally charge the greater of three months’ interest or the interest rate differential on fixed-rate mortgages, and typically three months’ interest on variable-rate mortgages.
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Renewals, Refinancing & Penalties
Prepayment privileges are the contractual right to pay down a closed mortgage faster than scheduled — through lump-sum payments, increased regular payments, or both — without triggering a prepayment penalty, up to an annual limit set by the lender.
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Rates, Terms & Payments
Prime rate is the benchmark lending rate each Canadian bank sets, moving largely in step with the Bank of Canada’s policy rate; it’s the reference point lenders use to price variable-rate mortgages and HELOCs, typically quoted as “prime minus” or “prime plus” a spread.
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Lenders & Industry
A principal broker is the individual designated by a licensed mortgage brokerage to hold ultimate responsibility for the brokerage’s compliance, supervision of its agents and brokers, and adherence to provincial mortgage regulations.
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Lenders & Industry
A private lender is an individual, syndicate, or company that lends mortgage funds directly, secured by a registered charge against real property, outside the traditional bank and B-lender system.
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Closing & Legal
Property taxes are the annual taxes a municipality levies on a home based on its assessed value, counted as one of the four inputs to GDS/TDS qualification and often collected together with the mortgage payment.
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Mortgage Types & Features
Purchase plus improvements is a mortgage option that lets a buyer finance the cost of planned renovations into the same mortgage used to buy the home, based on the property's expected value after the improvements are complete.
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Rates, Terms & Payments
A rate buydown is an arrangement where a lump-sum payment — from a builder, seller, or the borrower — is made to the lender in exchange for a lower interest rate on the mortgage, either for the full term or for an initial period. The result is a lower monthly payment than the mortgage’s standard rate would otherwise produce.
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Qualification & Ratios
A rate hold is a lender’s commitment to honour a specific interest rate for a set period, protecting a borrower from rate increases while they shop for a home or complete a purchase. It is typically offered alongside a mortgage pre-approval.
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Mortgage Types & Features
A readvanceable mortgage is a combined credit product that pairs a traditional amortizing mortgage with a HELOC under a single collateral charge, so the available HELOC room automatically increases as the mortgage principal is paid down.
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Closing & Legal
A Real Property Report (RPR) is a legal survey document showing the location of a property's buildings, additions, and improvements relative to its boundaries, most commonly required in Alberta and Saskatchewan real estate and mortgage transactions.
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Regulation & Compliance
RECA (the Real Estate Council of Alberta) is Alberta’s regulator for mortgage brokering, licensing mortgage associates and mortgage brokers under the Real Estate Act.
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Mortgage Types & Features
A recourse mortgage is a mortgage under which the lender can pursue the borrower personally for any shortfall remaining after a defaulted property is sold, rather than being limited to recovering only the property itself — the default legal position across most of Canada.
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Renewals, Refinancing & Penalties
Refinancing is replacing an existing mortgage with a new one, often before the term ends, to change the amount borrowed, access home equity, or alter the rate and terms. Unlike a switch, a refinance can increase the loan amount and normally requires requalifying at the minimum qualifying rate.
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Renewals, Refinancing & Penalties
A renewal statement is the notice a lender sends before a mortgage term matures, showing the outstanding balance, the maturity date, and a proposed new rate and term. It is the lender’s default offer — borrowers are free to compare it against other lenders before the term ends rather than accept it automatically.
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Mortgage Types & Features
Rent-to-own is an arrangement in which a prospective buyer rents a home for a set period while paying an option fee for the right — but not the obligation — to purchase it later, with a portion of the rent typically credited toward a future down payment. It is not a mortgage itself; a mortgage is only obtained if and when the purchase option is exercised.
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Qualification & Ratios
Rental offset is a method some Canadian lenders use to qualify a rental property purchase, where a portion of the property’s expected rental income is subtracted from its own housing costs (PITH) rather than added to the borrower’s income, before GDS and TDS are calculated.
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Closing & Legal
A reserve fund study is a periodic assessment, conducted by a qualified professional, of a condominium corporation's common-element components and the adequacy of its reserve fund and contributions to cover major future repairs and replacements.
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Buyer Programs & Taxes
The Residential Property Flipping Rule is a federal tax rule, in effect since January 1, 2023, that deems any gain from selling a residential property owned for less than 365 consecutive days to be fully taxable business income, removing access to capital gains treatment and the principal residence exemption unless a specific life-event exception applies.
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Mortgage Types & Features
A reverse mortgage is a loan available to eligible senior homeowners that converts home equity into cash without required regular payments, with the loan plus accumulated interest repaid when the home is sold, the borrower moves out, or the last borrower passes away.
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Default Insurance & Protection
Sagen (formerly Genworth Canada) is a private mortgage default insurer approved to insure high-ratio mortgages in Canada, operating alongside CMHC and Canada Guaranty under the same federal rules.
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Mortgage Types & Features
A second mortgage is an additional loan registered against a property that already has a first mortgage, sitting behind it in priority so the second-mortgage lender is repaid only after the first mortgage is satisfied.
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Rates, Terms & Payments
Semi-annual compounding is the calculation method Canadian law requires for fixed-rate mortgages: interest is compounded twice a year, not in advance, even though payments are typically made monthly, bi-weekly, or weekly.
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Rates, Terms & Payments
A skip-a-payment privilege is an optional feature on some Canadian mortgages that lets a borrower skip one scheduled payment in a year, usually once conditions are met (such as being ahead on prepayments). The skipped amount is not forgiven — it is added back onto the outstanding balance and extends the effective payoff.
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Lenders & Industry
A sliding scale in mortgage lending describes a rule, fee, or requirement that changes gradually across a range of values — such as loan-to-value or purchase price — rather than switching abruptly at a single cutoff point.
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Mortgage Types & Features
A spousal buyout mortgage is a refinance used after a separation or divorce, where one partner takes over the home and borrows enough to pay the other partner their share of the equity, removing the departing partner from title and the mortgage. It is a specific use case of a standard refinance rather than a distinct loan type.
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Mortgage Types & Features
A standard charge is a mortgage registered against a property for exactly the amount advanced, securing only that specific loan — the more traditional alternative to a collateral charge.
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Qualification & Ratios
A stated-income program lets a self-employed borrower qualify using a reasonably declared income figure rather than fully documented tax-return income, and is offered mainly by B lenders and other alternative lenders rather than mainstream banks.
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Closing & Legal
The statement of adjustments is the closing document a real estate lawyer or notary prepares showing the final amount a buyer owes on closing day, after crediting the deposit and prorating items like prepaid property taxes or condo fees between buyer and seller.
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Closing & Legal
A status certificate (called an estoppel certificate in some provinces) is a legal document a condominium corporation provides confirming a unit’s financial and legal standing — including reserve fund health, any special assessments, and outstanding fees — before a purchase or mortgage closes.
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Closing & Legal
Subject removal is the point in an Alberta or BC real estate transaction when a buyer formally confirms, in writing, that all conditions in the purchase contract — financing, inspection, and similar clauses — have been satisfied or waived, making the deal firm.
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Lenders & Industry
A submortgage broker is the license category used in British Columbia for an individual who arranges mortgages under the supervision of a BCFSA-registered mortgage broker or brokerage.
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Regulation & Compliance
A suitability assessment is the process a licensed mortgage professional completes to confirm that a recommended product actually fits the borrower’s needs, circumstances, and ability to repay before an application goes to a lender.
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Regulation & Compliance
A Suspicious Transaction Report (STR) is a filing a mortgage brokerage, lender, or administrator must submit to FINTRAC once it has reasonable grounds to suspect a transaction is related to money laundering or terrorist financing, submitted as soon as practicable after the suspicion is formed.
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Renewals, Refinancing & Penalties
A switch (or transfer) is moving an existing mortgage balance to a new lender at renewal, at the same principal amount and remaining amortization, without increasing the loan or accessing equity. Since November 21, 2024, OSFI does not require re-qualification at the minimum qualifying rate for a straight switch of an uninsured mortgage.
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Lenders & Industry
A syndicated mortgage is a single mortgage funded by two or more investors, each holding a proportional interest in the loan and its registered charge against the property, rather than one lender funding the whole amount. Syndicated mortgages are typically arranged through a private lending structure and serviced by a licensed mortgage administrator.
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Credit & Documents
The T1 General is the standard Canada Revenue Agency personal income tax return that every individual, including the self-employed, files annually, and is one of the core documents a lender reviews to verify income on a mortgage file.
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Closing & Legal
Tenancy in common is a form of co-ownership in which two or more owners each hold a distinct, individual share of a property — equal or unequal — with no right of survivorship, meaning each owner's share passes through their estate rather than automatically to the other owners.
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Rates, Terms & Payments
A term sheet is a short document summarizing the key proposed terms of a mortgage — amount, rate, term, fees, and major conditions — issued before a full commitment letter, most commonly used in private, alternative, and commercial mortgage financing.
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Credit & Documents
A thin credit file describes a borrower with very few trade lines or a short credit history, making it harder for a lender to assess creditworthiness through standard scoring.
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Renewals, Refinancing & Penalties
Three months’ interest is a prepayment penalty equal to three months of interest on the outstanding balance at the mortgage’s contract rate. It is the standard penalty for breaking a variable-rate mortgage early, the minimum lenders compare against the interest rate differential on fixed-rate mortgages, and the maximum penalty allowed by law once an individual borrower passes the five-year mark under the Interest Act.
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Regulation & Compliance
Tied selling, more precisely coercive tied selling, is when a federally regulated bank imposes undue pressure on a customer to obtain a product or service, from the bank or an affiliate, as a condition of getting another product such as a mortgage, which section 459.1 of the Bank Act prohibits.
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Closing & Legal
Title is the legal right of ownership to a property, registered in the applicable provincial land registry or land titles system, which identifies the registered owner and any registered charges against the property.
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Closing & Legal
Title fraud is a scheme in which a fraudster uses stolen personal information or forged documents to transfer a property's title, or register a mortgage against it, without the real owner's knowledge or consent.
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Default Insurance & Protection
Title insurance is a one-time-premium policy purchased at closing that protects an owner or lender against financial loss from title defects, fraud, or survey and boundary problems discovered after the purchase closes.
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Closing & Legal
A title search is a review of the applicable provincial land registry to confirm who legally owns a property and to identify any liens, easements, or other registered claims against it before a purchase or mortgage closes.
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Qualification & Ratios
The Total Debt Service (TDS) ratio is the percentage of a borrower’s gross annual income needed to cover housing costs (PITH) plus all other recurring debt payments — car loans, credit cards, lines of credit, and other loans. For insured mortgages in Canada, lenders generally require a TDS of 44% or less, calculated at the qualifying rate.
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Credit & Documents
A trade line is a single account entry on a borrower’s credit report — a credit card, line of credit, loan, or previous mortgage — showing its balance, limit, and payment history.
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Lenders & Industry
A trailer fee is a smaller, recurring commission that some lenders pay a mortgage brokerage for as long as the mortgage remains funded with that lender, in addition to the upfront finder’s fee paid at closing. It is an ongoing, lower-rate payment rather than a one-time origination commission, and some lender compensation models use one structure or the other, not both.
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Rates, Terms & Payments
The trigger point is the outstanding balance threshold for a variable-rate mortgage — set by the lender’s contract, often near the original principal amount — that, once crossed through negative amortization, requires the lender to take action to bring the loan back under control.
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Rates, Terms & Payments
The trigger rate is the interest rate at which a variable-rate mortgage with a fixed payment amount no longer covers the full interest owed for the period — meaning $0 of each payment would go to principal, and any further rate increase causes a shortfall that gets added to the balance.
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Regulation & Compliance
A trust account is a segregated bank account a licensed mortgage brokerage must use to hold money received from borrowers, lenders, or investors that isn't yet earned or due to the brokerage, keeping those client funds separate from the brokerage's own operating money.
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Buyer Programs & Taxes
The Underused Housing Tax (UHT) is a 1% annual federal tax on the value of vacant or underused residential property in Canada, primarily targeting certain non-resident, non-Canadian owners, though some Canadian owners can still have annual filing obligations even when no tax is owed.
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Lenders & Industry
An underwriter is the lender-side professional who evaluates a mortgage application against the lender’s credit policy and, for insured deals, the default insurer’s eligibility rules, before approving or declining the loan.
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Lenders & Industry
An underwriting exception is a lender’s decision to approve a mortgage file that falls outside its standard credit policy, based on compensating factors elsewhere in the application, rather than a change to the lender’s published guidelines.
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Mortgage Types & Features
An uninsured mortgage carries no mortgage default insurance at all — because the down payment is 20% or more, or the file doesn’t qualify for insurance (a price above the insured cap, a rental property, or cash-back, for example) — and the lender sets its own qualifying rules within OSFI’s framework.
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Mortgage Types & Features
A variable-rate mortgage (VRM) has an interest rate that moves up or down with the lender’s prime rate throughout the term. On most Canadian VRMs the payment amount itself stays fixed, so a prime-rate change shifts how much of each payment goes to interest versus principal, not the payment itself.
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Mortgage Types & Features
A vendor take-back (VTB) mortgage is seller financing where the seller of a property acts as the lender, letting the buyer pay part of the purchase price over time instead of receiving it all in cash at closing.
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Lenders & Industry
A volume bonus is additional compensation a lender pays a mortgage brokerage or broker once the total dollar volume of mortgages funded with that lender over a period — usually a calendar year — crosses a set threshold. It is paid on top of the standard finder’s fee earned on each individual deal, and is intended to reward brokers who consistently direct business to that lender.
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