Mortgage and Real Estate Glossary
Alberta Equity's glossary contains hundreds of terms. With this tool, you can click or search through the largest real estate and mortgage glossary in Canada!
- Sale-leaseback
- A transaction in which the seller transfers the title to the buyer, then rents the property from the new owner. Generally not done in Canada, more an American practice.
- Sales Contract
- A written document in which a purchaser agrees to buy property under certain given conditions, and the seller agrees to sell under certain given conditions. Also known as an "Agreement of Sale."
- Schedule I Banks
- A designation in the Bank Act that refers to Canadian-owned banks that are widely held, i.e., ones in which no one owner holds more than 10% of shares.
- Schedule II Banks
- A designation in the Bank Act that refers to foreign-owned banks and closely held Canadian banks, i.e., banks in which an owner may hold more than 10% of outstanding stock.
- Schematic Designs
- Structural plans for a building's mechanical systems, such as its plumbing and electrical functions.
- Seasonal Unemployment
- The loss of jobs due to changes in the climate and other conditions. Forestry, fishing and construction are affected by climate, while retailing is affected by seasons and holidays. For instance, at Christmas, retail employment is higher than in January.
- Second Mortgage
- A mortgage which ranks after a first mortgage in priority on a registered land title.
- Secondary Mortgage Market
- The trade in home loans that are bundled together and sold as securities to investors. It frees money so more people can get mortgages.
- Secured Card
- A credit card that a cardholder secures with a savings deposit to ensure payment of the outstanding balance if the cardholder defaults on payments. It is used by people new to credit, or people trying to rebuild their poor credit ratings.
- Secured Debt
- A debt that is secured by a lien on debtor's property that may be taken by the creditor in case of non-payment by the debtor. A common example is a mortgage loan.
- Secured Loan
- Borrowed money that is backed by collateral.
- Securities
- Negotiable instruments such as stocks and bonds.
- Securities/Investment Dealer
- One who acts as the agent for another party to buy and sell securities and other investments; also an underwriter.
- Security
- Property designated as collateral.
- Security Deposit
- In automobile leases, sometimes called reconditioning reserve. An amount, often the same as one month's payment, the dealer holds to be sure that the car will be returned in good condition. It is to be returned, less fees and damage charges, at the end of the lease.
- Self-Employed Person
- A person who runs a trade or business, rather than working as an employee for someone else. You are self-employed if you are a sole proprietor or a partner working in a business. You can be an employee and self-employed at the same time if you have an independent business outside your regular employee hours. To qualify for many business tax exclusions and deductions, the enterprise must make a profit in three of five years. In most cases in order to qualify you must take and average of the last 2-3 years tax assessments.
- Seller Broker
- One who earns a commission from the seller of a property in exchange for finding a buyer and assisting in negotiation.
- Seller Carryback or Transfer Back
- A form of financing in which the seller of a property accepts a down payment and agrees to accept payments until the property is paid for.
- Seller's Market
- A market where a seller is expected to sell quickly and for market or above market value.
- Semi-custom Home
- A house in which the buyer cannot alter the layout, but can specify amenities such as type of cabinets and floor coverings.
- Service Charge
- Fees charged to customers for specific services or as a penalty for not meeting certain requirements such as insufficient funds in a chequing account.
- Service Contract
- Also known as extended warranty. A contract that covers certain car repairs or problems after the manufacturer's or dealer's warranty expires. Extended warranties are sold by car manufacturers, dealers and independent companies. With a new car, the extended warranty usually must be purchased by the end of the first year of ownership.
- Settlement Points
- Regional collection points in the clearing and settlement system operated by the Canadian Payments Association. Settlement points forward each bank's regional balance to the Bank of Canada in Ottawa at the end of each day to allow the central bank to adjust the banks' balances with the central bank.
- Settlement Statement
- A document that details who has paid how much to whom.
- Share Certificate
- A certificate of deposit issued by a credit union that pays a specific dividend if held for a specific period. It's the credit union equivalent of a certificate of deposit. A penalty is usually assessed if all or any of the principal is withdrawn before maturity.
- Shared-appreciation Mortgage
- A home loan in which the lender offers a below-market interest rate in exchange for sharing in the profit when the home is sold. Usually done only with private funds/lenders.
- Shared-equity Partnership
- An arrangement in which one buyer lives in a home and the other has an ownership stake as an investment. The partners split the capital gain after the property is sold.
- Short Tax Year
- A tax period less than 12 months long, resulting from a business start-up or the transition to a tax year ending on a different date.
- Short-Term Capital Gain or Loss
- Your profit or loss from the sale of a capital asset that you held for one year or less.
- Short-term Liabilities
- Money that you have to pay in less than 12 months, including wages, short-term loans, taxes, credit card balances and long-term loans.
- Simple Interest
- Interest computed only on the principal balance, without compounding.
- Simple Interest Loan
- A method of allocating the monthly payment between interest and principal. The interest charged is determined by the unpaid principal balance on the loan, the interest rate, and the number of days since the last payment. The rest of the payment goes to the principal. Making early payments or additional payments will reduce the loan's principal and cut the total interest paid over the life of the loan.
- Small and Medium-sized Enterprises (SMEs)
- There are many definitions for this term. Banks define small businesses as those having authorized credit limits of $500,000 or less, while medium-sized businesses have authorization levels of up to $1 million.
- Smart Card
- A card with an imbedded computer chip which stores more information, performs more functions and is more secure than a credit card or debit card.
- Social Insurance Number (SIN)
- Every person who has an income or pays taxes must apply for this number, which is assigned by the Government of Canada. You must, by law, provide this number to financial institutions with which you have an interest-bearing deposit account.
- Society for Worldwide Interbank Financial Telecommunication (SWIFT)
- A co-operative owned by the international banking community that operates a global data processing system for the transmission of financial messages.
- Specialized Financing Corporation
- A term in the Bank Act referring to specialized business-management services such as making investments, negotiating mergers and acquisitions and many other services traditionally offered as merchant-banking services.
- Specific Performance
- A remedy in a court of equity compelling a defendant to carry out the terms of an agreement or contract. It is available only where the remedy of damages cannot afford adequate relief to the plaintiff.
- Speculation Home or Spec Home or Built on Spec
- A house built before a buyer has been found, on the assumption that one will be found.
- Speculative Builder or Developer
- One who builds without having a commitment to buy or lease from a purchaser or tenant.
- Spread
- The difference between the interest rate charged to borrowers and the interest rate paid to depositors.
- Square Footage
- The area within a building, calculated by measuring the rooms by length and width.
- Stagflation
- A period of time in which both the unemployment rate and the rate of inflation are relatively high.
- Standard Card
- The basic card offered by issuers. Customers with higher incomes and good credit reports can qualify for the higher-limit gold and platinum cards.
- Standby Commitment
- A commitment from a lender to make a loan in a specified period of time on specified terms with the understanding that the borrower will not likely draw down the funds.
- Starter Home
- A dwelling that is relatively small and inexpensive and bought as a first home.
- Statement
- A detailed record of transactions in a bank customer's account(s) for a certain period, usually each month, which shows debits, credits, transfers, payroll deposits, account balance, cheque fees, service charges, ATM activity, etc..
- Statute
- A law established by an act of the legislature.
- Statute of Frauds
- A law which provides that certain contracts must be in writing in order to be enforceable at law. It includes real estate contracts.
- Statute of Limitations
- That period of time specified by statute within which an action at law must be brought or else be forfeited.
- Step Down Lease
- A lease providing for decreases in rental payment at specified dates.
- Step Up Lease
- A lease providing for increases in rental payment at specified dates.
- Step-rate Mortgage
- A fixed-rate home loan on which payments are lower at the beginning, typically for two years, and which then rise.
- Sticker Price
- This shows the base price, the manufacturer's installed options with the manufacturer's suggested retail price (MSRP), the manufacturer's destination charge and the fuel economy (mileage). It is the Monroney label affixed to the car window and is required by federal law. The label may not be removed by anyone other than the purchaser.
- Stocks
- Traded on a stock exchange, these are shares in a company. Essentially, you purchase shares in exchange for owning a part of that company.
- Sub-prime Borrower
- A borrower with a less-than-perfect credit report due to late payments or a default on debt payments.
- Sub-prime Mortgage
- A mortgage granted to a borrower considered sub-prime, that is, a person with a less-than-perfect credit report. Sub-prime borrowers have either missed payments on a debt or have been late with payments. Lenders charge a higher interest rate to compensate for potential losses from customers who may run into trouble or default.
- Subagent
- A real estate agent who finds a buyer for a property, and is not the property's listing agent. The subagent usually earns a portion of the commission.
- Subcontractor
- A person or company that does specialty work for a general contractor.
- Subordinate Loan
- A mortgage whose priority is below that of another mortgage; i.e., a second or third mortgage or a home-equity loan.
- Survey
- A map executed by a licensed surveyor, which sets down precisely the boundaries of a given property as well as improvements, references to known landmarks, and the property's notable features. A precise measurement of a parcel's dimensions.
- Survivorship
- The right of a person to secure ownership by reason of his/her outliving someone with whom s/he shared undivided interest in the land.
- Swap
- An agreement between two businesses to exchange commodities, payments or other financial products to reduce the risk of volatile market conditions or to obtain a better price or rate. For example, interest rate swaps, where floating rate interest is exchanged for fixed rate interest, protects a corporation against rises in rates or allows it to take advantage of a better rate. A cross-currency swap enables two parties to enter into an agreement in which one exchanges its currency for the other's to meet their separate requirements.
- Sweat Equity
- The value of the work put into a house by its owner. This can be used in place of a full down payment. Up to and including 50% of a down payment.
- Syndicated Loans
- Loans to a company backed by a group of banks in order to share the risk in a large transaction among several financial institutions. There is usually a lead bank and several participating banks.
