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CAP
Refers to a maximum interest rate increase for a mortgage.

CAPITALIZED VALUE
The value of a property based on the net income.

CAPITALIZATION RATE
The rate of return anticipated by an investor in property.

CAVEAT EMPTOR
"Let the buyer beware". A buyer must examine fully before the purchase is made.

CERTIFICATE OF CHARGE
A mortgage document in the Land Titles System.

CESSATION OF CHARGE
A discharge of a mortgage in the Land Titles System.

CHAIN OF TITLE
The sequence of conveyances and encumbrances affecting a title to land from the time that the original patent was granted or as far back as records are available.

CHARGE
The name given to a mortgage document when title is registered under the Land Titles Act.

CHATTELS
Moveable possessions and personal property that may be removed without damage to the property, (e.g. appliances).

CHATTEL MORTGAGE
An encumbrance against moveable possessions, or personal property that may be removed without damage to the property, (e.g. appliances).

CLIENT
The person represented by the agent

CLOSED MORTGAGE
A reference to the absence of the privilege to accelerate repayment during the term of a mortgage either by bulk payment(s) or increase to scheduled remittances. A penalty applies if you repay the loan in full before the end of a closed term

CLOSING
See "Date of Completion"; the day the legal title to the property changes hands

CLOSING COSTS
Costs in addition to the purchase price of the home, such as legal fees, transfer fees and disbursements, that are payable on the closing date; typically range from 1.5% - 4% of a home’s selling price

CLOUD ON TITLE
Any encumbrance or claim that affects title to property.

CMHC
The Canada Mortgage and Housing Corporation a Canadian Crown Corporation which administers the National Housing Act. CMHC services include the insuring of high ratio mortgage loans for lenders.

COLLATERAL MORTGAGE
A mortgage which secures a loan given by way of a promissory note; the money which is borrowed can be used to buy a property or for another purpose such as home renovation or for a vacation

COLLATERAL SECURITY
An additional form of security, pledged to reduce the risk of a mortgagee.

COMMISSION
Amount agreed to by the seller and the real estate broker/agent and stated in the listing agreement; Payable to the broker/agent on closing

COMMITMENT
A written notice from a lender who advises of approval to advance a specified amount of funds under certain conditions.

COMMON LAW
That part of the law formulated, developed and administered by the old common law courts, based originally on unwritten common customs.

COMPLETION LOAN
A mortgage loan disbursed following the satisfactory completion of construction.

COMPOUND INTEREST
Interest on both the principal and on interest that has accrued.

COMPONENT FINANCING
A device by which lending is split into separate parts and treated individually.

CONDITION PRECEDENT
An event or action necessary before an agreement becomes binding.

CONDITION SUBSEQUENT
A condition referring to a future event upon the happening of which the contract becomes no longer binding on the parties.

CONDITIONAL OFFER
Offer to purchase that is subject to specified conditions; usually a stipulated time limit within which the specified conditions must be met.

CONDOMINIUM
The ownership of a separate amount of space in a multiple dwelling or other multiple-ownership of common elements used jointly with other owners.

CONDOMINIUM FEE
A monthly common payment among owners which is allocated to pay expenses.

CONSIDERATION
Something of value given to make a promise of repayment enforceable.

CONSTANT ANNUAL PERCENT
The percentage required to pay the principal and interest to amortize the loan.

CONSTANT PAYMENT MORTGAGE
A mortgage which is paid by equal periodic amounts consisting of principal and interest payments. It may be selfliquidating, which means the mortgage is entirely paid off at maturity (fully amortized), partially amortized, at the end of which there remains a principal balance due at maturity (also known as balloon mortgage).

CONTRACT
An agreement between two or more parties given receipt of lawful consideration to do or refrain from doing some act.

CONSTRUCTION ADVANCE
Moneys advanced to the borrower under a construction loan.

CONSTRUCTION LIEN
A claim against property pursuant to labour, services, or materials supplied.

CONSTRUCTION LOAN
A short term loan made to a builder for construction of buildings, usually to be paid out by another mortgage upon final completion. Also, a description used in reference to a mortgage which is advanced in pre-determined stages, according to the amount of work completed.

CONSTRUCTION LOAN AGREEMENT
An agreement between a lender and a builder setting out terms of an agreement - loan amount, rate, method of drawing funds, conditions for advancing.

CONVENTIONAL MORTGAGE
A mortgage loan which does not exceed 75% of the lending value of the property. Mortgages that exceed this limit must be insured by CMHC (or similar insurance provider).

CONVEYANCE
The transfer of property ownership. Also, the written instrument whereby such transfer is effected. Conveyance includes a mortgage, charge, and lease, etc.

CO-OPERATIVE
The ownership of a separate amount of space in a multiple dwelling or multiple-occupancy building with proportioned tenancy in common ownership of common elements. Used jointly with other owners, however, the owner does not have clear title to a specific unit, but becomes a shareholder of the corporation which owns all the property and occupies by way of a tenancy agreement subject to shareholders agreement administered by an elected board of directors.

COVENANT
An agreement contained in an instrument creating an obligation. It may be positive, stipulating the performance of some act. It may be negative or restrictive, forbidding the commission of some act.
A clause in a legal document which, in the case of a mortgage, gives the parties to the mortgage a right or an obligation; for example, a covenant can impose the obligation on a borrower to make mortgage payments in certain amounts on certain dates; a mortgage document consists of covenants agreed to by the borrower and the lender.

CROSS-COLLATERALIZATION
A reference to security involving various liens held in support of one or more advances made by a lender to a borrower.