CANADIAN MORTGAGE GLOSSARY TERMS Here is a simple glossary of Canadian mortgage lending and finance related terms. To find the term you are looking for quickly, simply click on the letter below.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
E
E-cheque or E-check (U.S.)
An electronic version of a paper cheque. The account holder writes an e-cheque using a computer or other type of electronic device and transmits the e-cheque to the payee electronically. Like paper cheques, e-cheques are signed by the payer and endorsed by the payee. Rather than handwritten or machine-stamped signatures, however, e-cheques are affixed with digital signatures, using a combination of smart cards and digital certificates. The payee deposits the e-cheque, receives credit, and the payee's bank clears the e-cheque to the paying bank. The paying bank validates the e-cheque and then charges the cheque writer's account.
E-commerce
A way to handle business transactions such as buying or selling goods and services online or through a computer network.
Early Closing Cost Reimbursement
Some line-of-credit lenders waive underwriting costs when a credit line is opened in anticipation of future profits. If the credit line is closed early, fees are retroactively imposed by the lender.
Early Occupancy
When the buyer is granted permission from the seller to move into the property before closing.
Early Termination Charge
If a leasee turns in a leased vehicle before the lease term expires, a fee is charged to terminate the lease.
Early Withdrawal Penalty
A depositor forfeits interest or is charged a service fee for either withdrawing funds or closing a time deposit before the maturity date.
Earned and Unearned Income
Earned income comes from wages, salary, or business profits whereas unearned income comes from sources such as interest, dividends, rental income, and pension benefits.
Earned Income
Money earned through wages, salaries, tips, net earnings (if self-employed), and any other income received for work or personal services. Investment income, such as dividends and interest, is not counted as earned income. See also "Unearned Income."
Earnest Money
Like a deposit, the buyer gives the seller money when making a formal offer to show he or she is serious about the transaction.
Easement
A right enjoyed by one landowner over the land of another. A limited right to use, or to prevent the use, of another’s land which accommodates or improves the beneficiary’s land, but grants no right to take possession of, or a profit from, the other’s land.
Economic Life
The estimated period over which it is anticipated that a property may profitably be utilized.
Economic Growth
The rate of change in output from the current year to the next year.
Economic Indicators
Statistics that help to determine the state of the economy. Such statistics can include the Consumer Price Index, housing starts, and unemployment rates.
Effective Age
An estimation of a building's physical condition as determined by an appraiser. The actual age of a building may be more or less than the estimated effective age.
Effective Gross Income (Income Property)
The annual income from a property if fully leased, less an annual allowance for vacancies and bad debts.
EFT/POS
Electronic funds transfer (EFT) at the point of sale (POS). A payment option that allows consumers to make purchases by transferring funds directly from their accounts to merchant accounts.
Egress
Going out (access to exit).
Electronic Cash
A method used to transfer funds over the Internet as payment for goods and services. Also commonly referred to as e-cash.
Electronic Commerce
A way to conduct business transactions such as buying or selling goods and services online or over a computer network.
Electronic Data Interchange (EDI)
EDI is a system used by corporations or organizations to transfer business information electronically. This system will virtually eliminate paperwork.
Electronic Filing
Income tax returns can be filed online using a personal computer with tax preparation software. The information is sent directly to Revenue Canada. If a tax payer is set up with direct deposit, refunds can be directly deposit into his or her bank account.
Electronic Funds Transfer
The transfer of money between accounts using consumer electronic systems such as automated teller machines (ATMs) or electronic bill payments.
Eminent Domain
The right reserved by government to take by expropriation private property for public benefit provided it pays just compensation.
Employment Equity Act
A federal statute that requires employers with 100 or more employees to eliminate any practices in the workplace discriminating against four designated groups of people who have historically been disadvantaged in the labour market: women; people who, by reason of race or colour, are members of visible minority groups; aboriginal peoples; and persons with disabilities.
Empty Nesters
Individuals with grown children that no longer live in the same residence. For real estate purposes, empty nesters tend to down-size and purchase smaller homes when children move out.
Encroachment
An improvement that intrudes illegally upon another's property.
Encryption
A method used to ensure the privacy and security of a customer's personal and financial information when using banking services over the Internet. Encryption scrambles the data that is being sent, so only the intended receiver can read the information. To be effective, encryption must be used by both the sender and receiver. Consumers should ensure encryption is being used before sending sensitive information over the Internet. CanEquity uses a encrypted server for all of our online applications.
Encumbrance
Outstanding claim or lien recorded against property or any legal right to the use of the property by another person who is not the owner.
End Loan/Mortgage
The final mortgage on a property, as opposed to a construction or other interim loan.
Endorse
To write one's signature on the back of a cheque in return for the cash or credit indicated on the front of the cheque.
Entrepreneur
A person who has the skills and initiative to establish their own business. This person also manages the business and assume the financial risks associated with the venture.
Environmental Impact Statement/Assessment
A mandatory (required by government) evaluation or assessment that must be conducted prior to construction. The assessment details the possible effects that the development could have on the environment surrounding the site.
Equifax
A major credit bureau company in Canada along with Trans Union.
Equity
In mortgaging, the difference between lending value and indebtedness.
Equity Financing (Lending)
The investment in the equity in leveraged or unleveraged real estate by investors. These investors are usually institutional and may or may not have provided the mortgage financing.
Equity of Redemption
The right of the mortgagor to have title to their property restored to him or her when he or she has repaid the mortgage in full.
Equitable Mortgage
A mortgage which has a claim solely on the equity of redemption and not to the title of the property itself.
Errors and Omissions Insurance
Malpractice insurance that protects architects, home inspectors, and contractors from claims by clients for professional errors or faults resulting from defective judgment, deficient knowledge, or carelessness.
Escheat
The reversion of property to the state in the event the owner thereof dies, leaving no will and having no legally qualified heir to whom the property may pass by lawful descent.
Escalation Clause
Lease provisions whereby the tenant pays for increases in certain expenses over a specified base. Usually these expenses are maintenance, insurance premiums and real estate taxes. The base is usually those expenses incurred by the landlord in a specified year.
Escrow
Securities, instruments, money, or other property deposited by two or more persons with a third person, to be delivered on performance of a certain event.
Escrow Account
A bank account in which money for property taxes and insurance is held until paid. Money is added to the account every time a mortgage payment is made.
Escrow agent
A neutral third party who holds the documents and money in a real-estate transaction until all conditions of the property sale are met.
Estate
The ownership interest of an individual in real property. The total sum of all the real property and personal property owned by an individual at time of death.
Estoppel Certificate
Legal certificate usually issued by a condominium corporation indicating details of the project and given to the lender / purchaser or tenant. Delivery of the certificate prevents one from claiming a different set of facts at a later date.
Eviction
To force or put out (a tenant, for example) by legal process when lease terms are violated.
Examination of Title
A review of public records and title abstracts to determine the chain of ownership of a property.
Excess Wear Charge
Most leases contain limits for wear and tear on the vehicle during the lease term. The lessee must pay charges for exceeding the limits when turning in the vehicle at the end of the lease.
Exchange
To give something in return for something else (such as goods or services). Making exchanges for similar or like property is a popular tax-deferral strategy.
Exclusive Listing
A legal agreement giving one real-estate agent the right to sell a property for a specified period, but owners retain the right to sell their property themselves without paying the agent commission.
Expensing
Government tax law allows individuals to expense certain business activities.
Experian
One of the Big Three credit bureaus, along with Equifax and Trans Union. Experian is not normally used in Canada.
Exports
Products and services produced in Canada to be sold in other countries.
Express Account
A low-fee or no-free chequing account, limited to ATM, telephone, and online transactions. Express account customers are charged fees when using bank teller services.
Expropriation
Taking private property for public use, with fair compensation to the owner, through the exercise of the right of eminent domain.
Extended Coverage Endorsement
An endorsement that may be attached to fire insurance policies. It generally includes coverage against the peril of windstorm, hail, explosion, riot, civil commotion, damage by aircraft or vehicles and smoke.
Extension Agreement
An agreement extending a loan past the original maturity date.
Exculpatory Clause
A clause in a contract holding one party harmless in the event of some default.
A service contract that covers certain vehicle repairs or problems after the manufacturer's or dealer's warranty expires. Extended warranties are sold by vehicle manufacturers, dealers, and independent companies. With a new vehicle, the extended warranty must be purchased by the end of the first year of ownership.