Visit Mortgage Contracts and Types of Mortgages for other important terms related to mortgages.
Agency Relationship: When an individual (the principal) legally appoints someone (the agent) to act on their behalf. In the case of a real estate transaction, the buyer or seller would be the principal and real estate agent and their salespeople would be the agents. In an agency relationship an agent should not have a conflict of interest when acting for the principal.
Amortization Period: The amount of time it will take to pay off the entire mortgage, making regular payments at a certain interest rate. Longer amortization periods reduce your monthly payments, but increase the total interest you pay.
Canadian Real Estate Association (CREA): The CREA operates the MLS® systems, provides information for REALTORS® and consumers, and established the Canadian Real Estate Association REALTOR® Code of Ethics.
Closing Costs: Costs associated with the purchase of a home that are not included in the purchase price, such as legal
fees, land registration fees, transfer fees, appraisal fees, water tests, etc.
Deposit held in trust: Money paid into the real estate agent’s trust account by a buyer when making an offer to purchase. The money is held in the account until the sale is closed, then is paid to the seller. A trust account is a bank account that lets companies hold money on their clients’ behalf. When your money is held in a trust it still belongs to you, not the company who received it.
Dual Agency: When one salesperson represents both the buyer and seller or when the buyer and seller are represented by salespeople who work for the same real estate agent.
Local Real Estate Boards: An association that provides services to REALTORS® at a local level, including training and management of the local Multiple Listing Services system (MLS® Systems). There are three Local Real Estate Boards in New Brunswick located in Moncton, Fredericton and Saint John.
Mortgage: A loan used to finance the purchase of a property.
Mortgage Associate: A professional who can help you navigate the process of securing a mortgage and has completed an approved education course.
Mortgage Broker: A professional who can help you navigate the process of securing a mortgage, has completed an approved education course and has a minimum of 24 months of experience.
Mortgage Term: The term is the amount of time that your mortgage agreement is in effect. The term may range from 6 months to 10 years. At the end of your term, the remaining balance will need to be renewed, renegotiated or paid in full.
Multiple Listing Service® Systems (MLS® Systems): An online database of properties for sale operated by the Canadian Real Estate Association (CREA). This system is managed by local real estate boards that gather information about listed properties in their area and post this information to the system.
New Brunswick Real Estate Association (NBREA): A provincial association of REALTORS® that co-regulates the real estate industry with the FCNB. The NBREA is responsible for continuing education of its members and ensuring members follow standards of professional ethics and the Canadian Real Estate Association REALTOR® Code of Ethics.
Offer to Purchase: A written contract that states the buyer’s intent to purchase a property, the terms of the purchase, and other terms and the closing date. If the offer is accepted by the seller and conditions are met, the contract is legally binding.
Real Estate Agent: A licensed company that helps consumers navigate the process of buying and selling real estate.
Real Estate Salesperson: A licensed individual who works for a real estate agent and helps consumers buy and sell homes.
REALTOR®: A trademarked term for a real estate salesperson who is registered with the Canadian Real Estate Association (CREA).