Ontario Mortgage Broker key terms

A business that arranges mortgage loans for borrowers in exchange for compensation, typically by dealing with multiple lenders rather than lending its own funds.

The licensed individual who operates or is the principal of a brokerage, supervising agents and accepting responsibility for the firm's regulated mortgage activities.

A licensed individual authorized to deal or trade in mortgages on behalf of a single sponsoring brokerage, but not permitted to operate an independent brokerage.

The individual designated to oversee a brokerage's mortgage operations and ensure compliance with licensing law and regulator requirements, sometimes combined with the broker role.

The Financial Services Regulatory Authority of Ontario, the provincial regulator that licenses mortgage brokerages, brokers and agents and enforces the Mortgage Brokerages, Lenders and Administrators Act.

Ontario's Mortgage Brokerages, Lenders and Administrators Act, the statute that sets licensing, disclosure, conduct and record-keeping duties for mortgage professionals in the province.

A licensed entity that administers mortgage loans in Ontario, such as collecting payments and managing renewals, without necessarily originating the loans itself.

A person or entity that advances funds to borrowers secured by a mortgage, and in Ontario may require a licence when dealing in mortgages in specified circumstances.

The written statement a brokerage must give a borrower before a mortgage is committed, showing the brokerage's compensation, the lender's name and the loan's key terms.

A required written summary of the mortgage's interest rate, payment amount, amortization, fees and prepayment terms, enabling the borrower to compare offers meaningfully.

A borrower's agreement to a transaction or fee after receiving clear, complete information about its nature, cost and conflicts, given freely without pressure or misrepresentation.

A situation where a broker's or agent's personal or financial interest could improperly influence advice or a recommendation, requiring disclosure and management.

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

The standard requiring a recommended mortgage or product to reasonably fit the borrower's needs, circumstances and objectives, supported by documented assessment.

A structured review of a borrower's goals, income, debts, assets and risk tolerance, used to justify the mortgage recommendation and support suitability documentation.

The process of collecting and verifying a borrower's identity, financial position and objectives, forming the foundation for suitability advice and anti-fraud checks.

Laws and procedures requiring mortgage professionals to verify identity, watch for suspicious transactions and report certain activity to the financial intelligence authority.

Canada's Financial Transactions and Reports Analysis Centre, which collects reports from regulated entities, including mortgage brokerages, to detect money laundering and terrorist financing.

A loan secured by a home occupied or intended for occupancy by the borrower, typically amortized over decades and subject to consumer protection rules.

A mortgage where the loan amount does not exceed 80 percent of the property's value, so mortgage default insurance is not required by the lender.

A mortgage exceeding 80 percent of the property's value, requiring mortgage default insurance and generally limited by a maximum loan-to-value cap.

Insurance protecting the lender if a high-ratio borrower defaults, paid for by the borrower and typically added to the mortgage balance.

A revolving credit facility secured by a home, allowing the borrower to draw funds up to a limit and repay flexibly, usually at variable interest rates.

A mortgage registered behind a first mortgage on the same property, carrying higher risk for the lender and usually a higher interest rate.

A loan funded by an individual or private company rather than a chartered bank, often used when borrowers cannot meet conventional lending criteria, usually at higher cost.

A mortgage whose interest rate stays constant for a set term, producing predictable payments and shielding the borrower from rate increases during that period.

A mortgage whose interest rate fluctuates with a reference rate, so payments or the interest portion change as market rates move.

The length of time a mortgage agreement's rate and conditions remain in force, after which the loan is renewed or repaid, distinct from amortization.

The total time scheduled to repay a mortgage in full through regular payments, which determines payment size and total interest cost.

The loan amount divided by the property's appraised value, expressed as a percentage, used to gauge lending risk and insurance requirements.

The total of all mortgage and secured credit registered against a property divided by its value, used to assess overall leverage.

The share of gross monthly income consumed by housing costs such as mortgage principal, interest, taxes and heating, used in underwriting decisions.

The share of gross monthly income required for housing costs plus all other debt payments, a key affordability measure in mortgage underwriting.

The lender's assessment of a borrower's creditworthiness, income stability, assets and property value to decide whether and on what terms to lend.

A qualifying standard requiring borrowers to show they could afford payments at a higher interest rate than the contract rate, reducing risk if rates rise.

A benchmark interest rate that banks use as a reference for pricing variable-rate loans and lines of credit, moving with central bank policy.

The cost of borrowing expressed as a yearly rate that includes certain fees and charges, giving a more complete comparison than the nominal interest rate.

How often mortgage payments are made, such as monthly, biweekly or weekly, which affects total interest paid over the amortization period.

A contractual right allowing a borrower to pay down extra principal without penalty, often up to a set annual percentage plus increased payment options.

A charge imposed when a borrower repays a mortgage beyond allowed privileges, calculated under a formula that may reference interest rate differentials.

A penalty calculation comparing the lender's lost interest on early payout, often based on the difference between the contract rate and current rates for the remaining term.