Last month, we posted the first half of a two-parter demystifying some of the tricky terms often used in the real estate field. Today, we round out the rest of the alphabet with definitions from N to Z.
Net taxes: The amount of property tax owing after deductions such as the home owner and seniors grants have been made.
Open mortgage: A mortgage that allows repayment of the principal amount, and can be renegotiated, at any time without penalty.
Possession date: The date a buyer is entitled to possession of their purchased property, usually at noon on the day of unless stipulated otherwise.
Pre-approved mortgage: A buyer who secures a pre-approved mortgage is qualified for a determined loan amount while he or she is still shopping for a home, locked into the agreed-upon interest rate for up to three months.
Principal: The mortgage amount initially borrowed/still remaining, upon which the interest is calculated.
Prime rate: Also known as the prime lending rate, this is the lowest rate of interest at which money may be borrowed commercially.
Property disclosure statement: A form that the seller completes listing any known issues with or defects of the property from zoning rights to structural damage, designed to address any potential future misunderstandings.
REALTOR: A real estate agent who is a member of a local real estate board, the provincial real estate association (i.e. BCREA) and the Canadian Real Estate Association.
Security: The property to be pledged as collateral for a loan.
Underwriting: The assessment of risk of an applicant — taking into account credit, employment, assets, etc. — and the mortgage property prior to a lender issuing a loan.
Zoning: Regulations set by the municipal government detailing how a property in specific geographic zones may be used and developed.