RECA RESIDENTIAL ALL QUESTIONS AND ANSWERS
SURE A+
✔✔Pre-approved Mortgage - ✔✔- tentative promise
- interest rate is held for 60-90 days may be extended to 120 days
- provides info on what buyer can afford, cost to finance, anticipated mortgage
payments
✔✔Types of Mortgages - ✔✔Assumable - assume existing mortgage, usually lower
rate, previous owners remain liable unless obtains release
Equity - Takes loan out against equity in property, can access up to 80% of appraised
value.
Vendor Takeback - seller provides some or all of mortgage financing. Title transfers to
buyer
Agreement for Sale - means of financing a sale. Seller supplies the financings and title
remains in their name until all payments have been made
Wrap Around - Umbrella Mortgage, lender assumes first mortgage and provides new
greater loan
Blanket- builder undertakes large project, covers entire project. Mortgage is discharged
as each individual unit is sold
Buildings Loan - advanced in intervals as construction progresses
Interim Financing - bridge financing, used for short periods of time. provides financing
until long term is obtained
Participating Mortgage - two or more lenders
, Discount Mortgage - Lender posts specific rate but is willing to negotiate
Collateral Mortgage - loan secured by written note, registered against the property.
Reverse Mortgage - designed for owners 60+, allows portion of equity to be converted
to cash
Purchase Plus Improvements - Mortgage is advanced, improvement finds held in trust
until work complete/inspected
Leasehold Mortgage - loan secured by tenants interest in rented property
✔✔Open vs Closed Mortgage - ✔✔Open Mortgage - allows borrower to prepay all or
part of principal at anytime
- no notice needed
-shorter terms, higher rates
Closed Mortgage
- less prepayment flexibility unless you a prepayment privileges'.
✔✔Mortgage rates - ✔✔Fixed Rate - interest is fixed for full term of mortgage.
- payments set in advance
- typically higher rate, longer term
- in initial years payments go to interest rather than principal
Variable Rate - may change periodically during the term
- changes with market interest rates
Adjustable rate - similar to VR, usually adjusted at predetermined intervals
✔✔Mortgage Priviledges - ✔✔Early Renewal - allows to renew before maturity, fees
may be associated
Pre-payment - make payments in addition without any fees. (percentage, double up,
accelerated, skip, switch, payout)
Portability - transfer terms/conditions of existing mortgage to another property
Expendability - increase principal amount
Cash Back - receives % of mortgage back in cash
Municipal Tax Installment - allows property taxes to be paid monthly
✔✔Mortgage Payment methods - ✔✔Blended payment - includes principal + interest
- mortgage payment remains constant
- portion attributed to interest and principal changes
- greater portion pays the interest
Interest only - at maturity the entire principal must be repaid, no time during mortgage
term is the principal reduced
SURE A+
✔✔Pre-approved Mortgage - ✔✔- tentative promise
- interest rate is held for 60-90 days may be extended to 120 days
- provides info on what buyer can afford, cost to finance, anticipated mortgage
payments
✔✔Types of Mortgages - ✔✔Assumable - assume existing mortgage, usually lower
rate, previous owners remain liable unless obtains release
Equity - Takes loan out against equity in property, can access up to 80% of appraised
value.
Vendor Takeback - seller provides some or all of mortgage financing. Title transfers to
buyer
Agreement for Sale - means of financing a sale. Seller supplies the financings and title
remains in their name until all payments have been made
Wrap Around - Umbrella Mortgage, lender assumes first mortgage and provides new
greater loan
Blanket- builder undertakes large project, covers entire project. Mortgage is discharged
as each individual unit is sold
Buildings Loan - advanced in intervals as construction progresses
Interim Financing - bridge financing, used for short periods of time. provides financing
until long term is obtained
Participating Mortgage - two or more lenders
, Discount Mortgage - Lender posts specific rate but is willing to negotiate
Collateral Mortgage - loan secured by written note, registered against the property.
Reverse Mortgage - designed for owners 60+, allows portion of equity to be converted
to cash
Purchase Plus Improvements - Mortgage is advanced, improvement finds held in trust
until work complete/inspected
Leasehold Mortgage - loan secured by tenants interest in rented property
✔✔Open vs Closed Mortgage - ✔✔Open Mortgage - allows borrower to prepay all or
part of principal at anytime
- no notice needed
-shorter terms, higher rates
Closed Mortgage
- less prepayment flexibility unless you a prepayment privileges'.
✔✔Mortgage rates - ✔✔Fixed Rate - interest is fixed for full term of mortgage.
- payments set in advance
- typically higher rate, longer term
- in initial years payments go to interest rather than principal
Variable Rate - may change periodically during the term
- changes with market interest rates
Adjustable rate - similar to VR, usually adjusted at predetermined intervals
✔✔Mortgage Priviledges - ✔✔Early Renewal - allows to renew before maturity, fees
may be associated
Pre-payment - make payments in addition without any fees. (percentage, double up,
accelerated, skip, switch, payout)
Portability - transfer terms/conditions of existing mortgage to another property
Expendability - increase principal amount
Cash Back - receives % of mortgage back in cash
Municipal Tax Installment - allows property taxes to be paid monthly
✔✔Mortgage Payment methods - ✔✔Blended payment - includes principal + interest
- mortgage payment remains constant
- portion attributed to interest and principal changes
- greater portion pays the interest
Interest only - at maturity the entire principal must be repaid, no time during mortgage
term is the principal reduced
