Mortgage Glossary – P

Pre-Approval – A process to determine if a borrower is qualified to obtain a mortgage loan. Urban Mortgage can obtain a pre-approval at no cost for their clients.

Pre-qualification – The process in which a potential borrower obtains an estimate of the maximum purchasing price they may qualify for.

Prepayment Penalty – A fee charged to the borrower to pay off the loan before the end of the term.

Prime Lending Rate – The rate charged by chartered banks to creditworthy clients for a loan.

Prime Rate – A rate suggested by the Bank of Canada on which banks base their prime mortgage rate. This rate may fluctuate in accordance with the Prime Lending Rate.

Principal – The remaining balance on a mortgage loan.

Property Tax – A tax imposed by a municipality on real estate. The amount of tax is dependent on the municipalities assessed value on the property.

Purchase Agreement – A written and binding contract between the buyer and seller for a property. Also known as a purchase contract.