An amendment to an agreement means the customer and the homebuilder agree to change a part
of the original Purchase Agreement.
The number of years, most often 15, 20 or 25 years, it will take to repay your mortgage.
A process for estimating the market value of a particular property. The appraised value
seldom matches the actual purchase price exactly as other factors influence price. You can
get a free appraisal from one of our realtors if you're looking at purchasing another Shane
home through the Guaranteed Home Trade-In Program.
A lending institution authorized by the Government of Canada through CMHC to make loans
under the terms of the National Housing Act. Only Approved Lenders can negotiate mortgages
which require mortgage loan insurance. Shane Homes has partnered with HSBC to offer you 1
to 1.2 points off the regular posted interest rates providing you go with HSBC for your
mortgage for your new Shane home. For more information visit our Mortgage Information page.
Each community has its own architectural controls, set by the developer, to ensure their
intended look and integrity of the community is adhered to. This enhances the appearance of
the community and value of your investment. For instance, homes of similar colour cannot be
repeated in close proximity.
A mortgage payment that includes principal and interest. It is paid regularly during the
term of the mortgage. The payment total remains the same, although the principal portion
increases over time and the interest portion decreases.
A certificate that must be obtained from the municipality by the property owner or
contractor before a building can be erected or repaired. It must be posted in a conspicuous
place until the job is completed and passed as satisfactory by a municipal building
When a customer wants to make a change in their new home after the purchase agreement has
been signed, a change order must be filled out with the Area Manager and approved by Shane
Homes. Restrictions may apply depending on the current stage of construction.
Costs, in addition to the purchase price of the home, such as legal fees, transfer fees and
disbursements, that are payable on the closing date. Closing costs typically range from
1.5% - 4% of a home's selling price.
The date on which the sale of a property becomes final and the new owner takes possession.
A folder containing the closing statement, warranty certificate, maintenance brochures and
certificates from suppliers, and more that is given to the customer on their possession
Canada Mortgage and Housing Corporation. A Crown corporation that administers the National
Housing Act for the federal government and encourages the improvement of housing and living
conditional for all Canadians. CMHC also creates and sells mortgage loan insurance
Conditional Offer/Conditions of Sale:
An Offer to Purchase that is subject to specified conditions. For example, the arranging of
a mortgage. There is usually a stipulated time limit within which the specified conditions
must be met.
A mortgage which secures a loan by way of a promissory note. The money which is borrowed
can be used to buy a property or for another purpose such as a home renovation or for a
Commitment Letter/Mortgage Approval:
Written notification from the mortgage lender to the borrower that approves the advancement
of a specified amount of mortgage funds under specified conditions.
Conventional Mortgage Loan:
A mortgage loan up to a maximum of 75% of the lending value of the property. Mortgage loan
insurance is not required for this type of mortgage.
A legal document which is signed by both the vendor and purchaser, transferring ownership.
This document is registered as evidence of ownership.
Failure to abide by the terms of a mortgage loan agreement. A failure to make mortgage
payments (defaulting on the loan) may give cause to the mortgage holder to take legal
action to possess (foreclose) the mortgaged property.
Money placed in a trust by the purchaser when an Offer to Purchase is made. The sum is held
by the real estate representative or lawyer until the sale is closed, and then paid to the
The person or group that purchased the entire parcel of land where the subdivision is
located. The developer pays for servicing this parcel of land and, in turn, sells lots to
Discharge of Mortgage:
A document signed by the lender and given to the borrower when a mortgage loan has been
repaid in full.
The portion of the house price the buyer must pay up front from personal resources, before
securing a mortgage. It generally ranges from 5% - 25% of the purchase price.
A right acquired for access to or over, or for use of, another person's land for a specific
purpose, such as a driveway or public utilities.
A registered claim for debt against a property, such as a mortgage.
The difference between the price for which a home could be sold and the total debts
registered against it. Equity usually increases as the outstanding principal of the
mortgage is reduced through regular payments. Market values and improvements to the
property also affect equity.
A legal procedure in which the lender gets ownership of the property if the borrower
defaults on the mortgage loan.
Gross Debt Service Ratio (GDS):
The percentage of the borrower's gross monthly income that will be used for monthly
payments of principal, interest, taxes, heating costs and half of any condominium
A mortgage loan in excess of 75% of the lending value of the property. This type of
mortgage must be insured - for example, by CMHC - against payment default.
An amount of money withheld by the lender during the progress of construction of a house to
ensure that construction is satisfactory at every stage. A standard holdback amount is 10%
of the total cost of the building project.
The cost of borrowing money. Interest is usually paid to the lender in installments along
with repayment of the principal loan payment.
Interest Adjustment Date (IAD):
A date from which interest on the mortgage advanced is calculated for your regular
payments. This date is usually one payment period before regular mortgage payments begin.
Interest due from the date your mortgage is advanced to the IAD is due on closing.
The purchase price or market value of a property, whichever is less.
The ratio of the loan to the lending value or a property expressed as a percentage. For
example, the loan-to-value ratio of a loan for $90,000 on a home which costs $100,000 is
The lot refers to the entire property or parcel where the home will be built, including
city utility easements. The lot size is typically expressed in terms of square feet, linear
feet or acreage. The lot size determines which home models can be built on each lot.
Lot Grading Terminology:
* Level Lot - flat lot * Level-Transitional - flat lot with a grade adjustment on one side
* Back-to-Front Slope - higher grade at the rear of the lot * Back-to-Front Transitional -
higher grade at the rear of the lot with a grade adjustment on one side * Front-to-Back
Slope - higher grade at the front of the lot * Front-to-Back Transitional - higher grade at
the front of the lot with a grade adjustment on one side * Walkout Lot - Low enough grade
at the rear of the lot so you are able to walk directly out of your lower level into your
back yard. It makes a two storey home feel like a three store home. * Walkout Transitional
- A walk-out lot with a grade adjustment on one side
The last day of the term of the mortgage agreement. On this day the mortgage loan must be
either paid in full or the agreement renewed.
A mortgage is a loan, provided by a bank or mortgage company, that helps you build a home.
Like all loans, you pay it off by making payments over a period of time. Your payments go
toward paying off the principal (the amount of money you borrowed) and the interest (the
cost of borrowing the money).
Mortgage Life Insurance:
The insurance guarantees that if you die your mortgage will be paid in full.
Mortgage Loan Insurance:
If you have a high-ratio mortgage (more than 75% of the purchase price), your lender will
require mortgage loan insurance - available from CMHC or a private insurer. The insurance
premium will cost between 0.5% and 3.75% of the amount of the mortgage (additional charges
A regularly scheduled payment that is blended to include both principal and interest. You
can use our mortgage calculator to find out what your mortgage payments would be based on
various interest rates.
This helps you in your search for a new home by giving you a clear idea of what you can
afford. This includes the amount of money you can realistically borrow to buy a home and
the amount of your payments. You can receive a mortgage pre-approval from any bank or
mortgage company, which is held for approximately 90 days from the time of application.
This is also beneficial as it holds the mortgage rate for you. If the mortgage rate goes up
before you sign a purchase agreement to purchase a home, you will receive the lower rate at
the time of application for the pre-approval, and if the interest rates go down you will
receive the lower rate.
Your total financial worth, calculated by subtracting your total liabilities from your
Offer to Purchase:
A written contract setting out the terms under which the buyer agrees to buy. If accepted
by the seller, it forms a legally binding contract subject to the terms and conditions
stated in the document.
Developments are typically created in phases, or large portions of an entire community.
Phase one opens first, followed by the second and third phases, and so on. The number of
phases in each community depends upon how large the community is and what time frame the
developer uses to create the community.
The plot plan shows how the house is proposed to be situated on the lot.
Principal, interest and taxes - payments due on a regular basis under the terms of the
mortgage agreement. Generally, payments are made monthly and include one-twelfth of the
estimated annual municipal and school taxes. Since these taxes change from year to year,
this section of the mortgage will change accordingly.
Principal, interest, taxes and heating - costs used to calculate the Gross Debt Service
The amount of money actually borrowed.
Real Property Report (R.P.R.):
A Real Property Report is a legal document that illustrates in detail the location of all
relevant, visible public and private improvements relative to property boundaries. It takes
the form of a plan or illustration of the various physical features of the property (i.e.
deck, fence, garage), including a written statement detailing the surveyors opinions or
concerns. It can be relied upon by the buyer, the seller, the lender and the municipality
as an accurate representation of the improvements on your property.
A real estate representative who is a member of an organization of persons engaged in the
business of buying and selling real estate, such as the Calgary Real Estate Board.
To pay off a mortgage or other registered encumbrance and arrange for a new mortgage,
sometimes with a different lender.
Request for a Lot Hold:
To reserve a lot for a short period of time, the customer can provide Shane Homes with a
$1,000 deposit. In exchange, Shane Homes will hold the lot for the customer and will notify
the customer if another party expresses an interest in it.
Review Plans/Check Set:
The check set includes a set of drawings and a proposed plot plan. You will review this
with your Shane Homes Area Manager to ensure the plans incorporate all of your desired
An additional mortgage on a property that already has a mortgage.
Spec Home or Home for Quick Possession:
Is a home that is pre-built before a buyer of the home is found. Shane Homes has an
inventory of spec homes under construction, at various stages, in numerous communities
throughout the city. The advantage of a spec home is that the customer does not have to
wait the complete duration of construction - the possession date may be immediate up to
five months away. The disadvantage is if the home is at a far enough stage during the
construction process then the colors and options cannot be altered.
This term refers to all of the regular items that comprise a new home. Shane Homes has two
levels of standard specifications - style series and serenity series. Each model has a
specific standard specification. When you view one of the floorplan pages within our
website you will see a link for the standard specifications for that model.
The length of time during which a mortgagor (borrower) pays a specific interest rate on the
mortgage loan. The entire mortgage principal is usually not paid off at the end of the term
because the amortization period is normally longer than the term.
A freehold title gives the holder full and exclusive ownership of land and buildings for an
indefinite period of time. In condominium ownership, land and common elements of buildings
are owned collectively by all unit owners, while the residential units belong exclusively
to the individual owners. A leasehold title gives the holder a right to use and occupy land
and buildings for a defined period of time.
Total Debt Service Ratio (TDS):
The percentage of gross monthly income require to cover all monthly payments for housing
and all other debts, such as car payments.
Vendor Take Back Mortgage:
Mortgage financing arranged between the seller of the property and the buyer. The title is
transferred to the buyer. Often this type of loan is a second mortgage which the seller is
willing to arrange at below market rates to ensure the buyer can purchase the house. Most
of these arrangements are not renewable or transferable to the next owner of the house.
A walk-through is an inspection of your new home prior to completion. Shane Homes does
three walk-throughs with the customer throughout the construction process of their new