BC Sub-mortgage Broker key terms

A business that arranges, negotiates, or facilitates mortgage loans for borrowers or lenders in return for compensation, and that must be licensed under British Columbia's mortgage brokers legislation unless a specific exemption applies.

An individual who carries out mortgage brokerage activities on behalf of a licensed mortgage brokerage rather than as the licensee principal, and whose authority, supervision, and permitted activities are defined by the brokerage and the regulator.

The individual a licensed mortgage brokerage names as responsible for the firm's mortgage brokerage activities and for supervising its employees, ensuring compliance with licensing and conduct requirements.

The public record maintained by the provincial regulator listing licensed mortgage brokerages and individuals, their licence status, and any conditions or disciplinary history that consumers and lenders can check.

A restriction or requirement attached to a licence, such as limiting the types of mortgage business a licensee may conduct or requiring additional reporting, education, or supervision.

The ongoing obligation of a brokerage and its designated individual to monitor, review, and correct the mortgage activities of its licensees so that work is accurate, compliant, and within each person's authorized scope.

The mandatory ongoing professional education that licensees must complete within set cycles to keep their licence in good standing and stay current on law, products, and practice standards.

A loan secured by a charge against a home or other dwelling, typically amortized over decades and repaid with interest, used to purchase, refinance, or draw equity from residential property.

A residential first mortgage where the loan exceeds the standard maximum loan-to-value threshold, so the lender requires default insurance and the borrower pays an insurance premium, usually added to the balance.

Insurance that protects the lender if a high-ratio borrower defaults, paid for by the borrower, and required whenever the loan amount exceeds the maximum permitted loan-to-value ratio.

A revolving credit facility secured by a charge on a home, letting the borrower draw, repay, and redraw funds up to a registered limit, typically at a variable interest rate.

A mortgage registered behind a first charge on the same property, carrying higher risk and usually a higher rate because the first lender is repaid before it on default.

A loan funded by an individual or non-institutional lender, often used when bank financing is unavailable, typically shorter term, interest-only, and priced higher to reflect greater risk.

Short-term interim borrowing that covers a gap, such as when a buyer needs funds before an existing property sells, and is repaid from the expected proceeds.

The total length of time scheduled to repay a mortgage in full through regular blended payments, which determines how much interest is paid over the life of the loan.

The length of the current mortgage contract before renewal or maturity, during which the rate, payment, and conditions apply and after which the borrower renegotiates or repays.

The loan amount divided by the property's appraised or purchase value, expressed as a percentage, used to measure leverage and decide whether default insurance is required.

The total of all mortgage and secured credit charges against a property divided by its value, showing overall leverage when a first mortgage and secondary financing are both present.

The share of gross monthly household income consumed by housing costs, including mortgage principal and interest, property taxes, heating, and half of condo fees where applicable.

The share of gross monthly household income needed to cover housing costs plus all other debt payments such as credit cards, car loans, and student loans, used to judge repayment capacity.

A qualification rule requiring borrowers to show they could still afford payments at a qualifying rate higher than the contract rate, cushioning them against rate increases.

How often mortgage payments are made, such as monthly, biweekly, or weekly, which affects total interest paid because more frequent payments reduce the outstanding balance sooner.

A contractual right letting a borrower repay some or all of a mortgage early without a penalty, often up to a set annual percentage plus an increased payment option.

A prepayment penalty calculation comparing the lender's lost interest under the original rate with what it could earn at current rates for the remaining term, often producing a large charge.

A lender's written offer to advance funds on stated terms, including amount, rate, term, conditions, and expiry, which the borrower accepts to secure financing.

A requirement in a commitment or purchase contract that must be satisfied before the loan or deal proceeds, such as an appraisal, inspection, or proof of down payment.

A review of the land registry to confirm ownership, registered charges, easements, and other encumbrances, ensuring the lender's mortgage will rank as expected.

Filing the mortgage charge in the provincial land title system so the lender's security interest is publicly recorded and enforceable against later claims.

The ranking of registered charges against a property, determining which lender is repaid first from sale proceeds and therefore which loans carry greater risk.

A written disclosure given to the borrower that sets out the mortgage's key terms, including amount, rate, term, payment, fees, and the cost of borrowing.

The obligation to tell a client, in writing and in good time, about any personal or financial interest a licensee or brokerage has in a transaction that could influence the advice given.

A legal obligation to act in the client's best interest, placing the client's interests ahead of the licensee's own, including duties of loyalty, good faith, and full disclosure.

The process of gathering and verifying a borrower's identity, financial situation, goals, and risk tolerance so suitable mortgage advice and products can be recommended.

Judging whether a recommended mortgage fits the client's documented circumstances, needs, and objectives, and being able to justify that recommendation with records.

Confirming a client's identity using reliable, independent documents or methods before acting, a required step that also underpins anti-money-laundering and fraud controls.

The set of legal duties requiring licensees to verify clients, watch for suspicious transactions, keep records, and report unusual activity to the authorities.

A warning sign suggesting possible misrepresentation, such as inflated income, altered documents, unexplained deposits, or a buyer with no real interest in the property.

Acting for both borrower and lender, or for two borrowers with conflicting interests, in the same transaction, which requires informed written consent and careful management.