Entering the realm of homeownership marks a significant commitment and one of life’s most substantial financial investments. For those new to this journey, the multitude of real estate terms can be overwhelming. At Your Realty Group, we stand by you to guide you through this maze. However, we understand the value of empowering you with foundational knowledge. Below, we’ve curated essential real estate terms to equip you with a better understanding before embarking on your home-buying endeavor.
Key Real Estate Terminology for Home Buyers
Amortization: The duration allocated for repaying a loan, specifically in the context of a mortgage, typically spanning around 25 years in Canada.
Assessed Value: The monetary value assigned to a property by a public tax assessor, pivotal in determining property taxes.
Balanced Market: A state of equilibrium where buyer and seller interests align, leading to reasonable offers, steady home sales, and stable prices.
Bridge Financing: Short-term financial assistance aiding homebuyers who purchase a new home before selling their current one, particularly valuable in a seller’s market.
Buyer’s Agent: An advocate for the buyer’s interests in a transaction, distinct from the listing agent representing the seller.
Buyer’s Market: A market scenario favouring buyers due to surplus homes, offering increased choices and negotiation leverage.
Closing: The final step in a real estate transaction, culminating in the transfer of property ownership after meeting conditions outlined in the Purchase and Sale Agreement
Closing Costs: Additional expenses related to finalizing the purchase deal, encompassing legal and administrative fees beyond the home’s purchase price.
Condominium Ownership: Owning a unit along with shared common elements, managed by a condominium association collecting fees for maintenance.
Contingency: Conditions in a contract that must be fulfilled for it to become legally binding.
Curb Appeal: The visual attractiveness of a property from the street, influencing a buyer’s perception of its value.
Debt-to-Income Ratio (DTI): A metric used by lenders to assess a borrower’s capacity to manage monthly payments in relation to their income.
Deposit: An initial payment demonstrating the buyer’s commitment, held in trust until the deal’s closure.
Down Payment: The upfront payment securing a mortgage, typically at least five percent of the home’s purchase price in Canada.
Dual Agency: Representation of both the buyer and seller by a single real estate agent or brokerage.
Equity: The difference between a home’s market value and the mortgage owed, representing the portion owned by the homeowner.
Fixed-Rate Mortgage: A mortgage with a set interest rate for a predetermined period, often around five years.
Freehold Ownership: Absolute ownership of the property and its associated responsibilities.
Foreclosure: The legal process initiated by a lender due to mortgage payment defaults, resulting in the property’s repossession.
Gross Debt Service: The percentage of one’s total income allocated to housing costs.
High-Ratio Mortgage: A mortgage requiring less than 20% down payment, necessitating mortgage insurance in Canada.
Home Appraisal: A professional assessment determining a home’s market value, crucial for mortgage approval.
Home Buyers’ Glossary
Understanding real estate terminology in Canada is vital for making informed decisions in buying, selling, or investing. It empowers individuals to navigate mortgage rates, property listings, and market trends with confidence.
At Your Realty Group, our commitment to tailored service paired with our deep roots in Kingston, ensures a knowledge-driven approach personalized to your needs.