Home Buyer Glossary

Amortization — The full stretch of time to pay off your mortgage. The maximum depends on your situation; a longer amortization lowers your payment but costs more interest over time.

Appraisal — A professional valuation of a property, ordered by your lender to confirm the home is worth what you’re paying. Different from an inspection — the appraisal protects the lender, the inspection protects you → home inspection.

Balanced market — When buyers and sellers are roughly even in number. Homes sell at fair value in a reasonable time, without the frenzy of a hot market or the leverage of a cold one.

Bridge financing — A short-term loan that covers the gap when you buy your new home before your current one sells. Common in seller’s markets, where the timing rarely lines up neatly.

Buyer’s market — More homes for sale than buyers. You get more choice and more negotiating power; homes sit longer and prices stay flat or soften.

Closing — The final step, where every condition of the Purchase and Sale Agreement is met and the property officially changes hands.

Closing costs — Everything beyond the purchase price due at closing — legal fees, land transfer tax, title insurance, and more. They land all at once, so budget them early → home buying costs.

Comparative Market Analysis (CMA) — A study of comparable recent sales used to figure out what a home is actually worth. It’s how you price an offer with data instead of guesswork.

Condo ownership — You own your unit outright and share the building and grounds with the other owners, who collectively fund upkeep through monthly fees → home types.

Contingencies (conditions) — Requirements that must be satisfied for a sale to close — financing, inspection, appraisal. They’re your escape hatches; think hard before waiving any → multiple offers.

Deposit — Money you put down with your offer to show you’re serious. Held in trust, then applied to your purchase price at closing.

Down payment — Your upfront share of the purchase price. The minimum depends on the price, and putting down less than the insurable threshold means carrying mortgage insurance → home buying costs.

Dual agency — When one agent represents both the buyer and the seller in the same deal. It’s allowed with consent and varies by policy, but be clear-eyed about whose interests are being juggled.

Equity — The part of your home you truly own — its market value minus what you still owe on the mortgage. It grows as you pay down the loan and as values rise.

FHSA (First Home Savings Account) — A registered account built for first-time buyers: contributions are tax-deductible going in and withdrawals are tax-free coming out, with no repayment required → first-time buyers.

Fixed-rate mortgage — Your interest rate is locked for the term, so your payment doesn’t move no matter what rates do. Predictability, traded against potential savings.

Freehold ownership — You own the home and the land, and you’re responsible for all of it. Full control, full upkeep → home types.

High-ratio mortgage — A mortgage where you’ve put down less than the insurable threshold, which means mortgage loan insurance is required.

Home Buyers’ Amount — A federal tax credit for first-time buyers that puts money back at tax time → first-time buyers.

Home Buyers’ Plan (HBP) — A federal program letting first-time buyers withdraw from their RRSP, tax-free, toward a home — repaid over time → first-time buyers.

Home inspection — A professional examination of a property’s condition, giving you protection and negotiating leverage before you commit → home inspection.

Land survey — A document mapping a property’s exact boundaries. Worth having for clarity of ownership and for any future changes to the property.

Land transfer tax — A tax you pay when property changes hands, calculated on the purchase price on a sliding scale. First-time buyers get a rebate, and Windsor-Essex has no municipal land transfer tax → home buying costs.

Mortgage loan insurance — Required when your down payment is under the insurable threshold; it protects the lender if you default, and lets you buy with less down.

Mortgage pre-approval — A lender’s assessment of how much you can borrow, which also holds a rate for a set window. Do this before you shop — it sets your real budget and makes your offer credible → the buyer’s guide.

Offer — Your formal, legal proposal to buy a home, usually made conditional on things like financing and inspection.

Porting — Moving your existing mortgage to a new property while keeping your current rate and terms. Handy when you’re moving and don’t want to lose a good rate.

Principal residence exemption — The tax rule that generally shelters the gain on the sale of your main home from capital gains tax — a big reason your home is both a place to live and a tax-efficient asset, especially when selling or downsizing → downsizing.

Seller’s market — More buyers than homes for sale. Expect quick sales, rising prices, and competitive offers — and a plan for standing out → multiple offers.

Stress test — The rule that you must qualify for your mortgage at a rate higher than the one you’re actually offered, proving you could still carry the payment if rates rose.

Title insurance — A one-time policy protecting you against ownership problems — fraud, boundary issues, surprises in the property’s history. Recommended, though not mandatory in Canada.

Variable-rate mortgage — Your rate is tied to the lender’s prime rate, so it moves as prime moves. It can save you money when rates fall and cost more when they rise.

Virtual tours — Viewing and even transacting on homes digitally — online tours, video calls, and electronic signatures. A useful first filter, especially for out-of-town buyers.