| Canada Mortgage and Housing Corporation |
A federal crown corporation which administers the "National Housing Act" (NHA), and through which all federal housing policies and programs are implemented. |
| Cap Rate |
The highest rate that a borrower will pay within a defined time period. Examples are; the rate committed on a commitment letter or a mortgage pre-qualification (also known as a "rate hold"); or the maximum rate that will be paid by the borrower during the term of a "protected variable rate mortgage". A lender will usually have to incur a cost to insure against rate increases during the capping period. This insurance is called a "hedge". |
| Closed Mortgage |
A mortgage whose terms state that it cannot be paid out, even with a penalty, unless the lender agrees. In some cases, a closed mortgage may be discharged at a defined cost, usually Interest Rate Differential (IRD), but sometimes with a punitive penalty such as full interest to maturity. |
| Closing |
The final exchange of consideration and legal completion of a transaction, involving either a house purchase, a mortgage registration, or both. |
| Commitment Letter |
A written commitment from a lender to lend mortgage funds to specific borrowers as long as certain conditions are met within a specified time period before closing. A key component of the commitment, particularly in a period of volatile interest rates, is the "rate hold", where a lender may "cap" a rate for a defined period, such as 60 days or 90 days. Commitments on financing for new homes, which usually have longer closing dates, can be negotiated between the lender and the builder and be held for as long as 6 months, and even a year. |
| Compliance Letter |
Required in many municipalities throughout Canada before a property transfer can take place. This is an acknowledgement from the building department that the property either has, or is clear of outstanding work-orders. Work-orders are specific clean-up or fix-up requirements that the owner must complete, particularly before a transfer of ownership. |
| Connection Charges |
Some local utility companies (hydro, gas, oil) charge a fee on closing to connect new buyers up to their service. More normal, however, is an extra charge on the first billing. |
| Conventional Mortgage |
A mortgage usually amounting to 75% (Loan to Value ratio) or less of the value of the property. |
| Credit Report |
A record of an individual's payment history available at a credit bureau. Individuals can order a copy of their own report by contacting their local bureau. |
