Real Estate Definitions
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Gap Insurance A type of insurance offered to customers with leased vehicles. The policy pays the difference between what is owned and what the vehicle is worth if the car is stolen or destroyed. Garnishment When a set dollar amount is withheld from a person's pay cheque and given to another party, such as a creditor or ex-spouse. Any amount garnished from a pay cheque must be included as taxable income because the full pay cheque is considered to be received by the person even though some was withheld to pay debts. GE Capital GE Capital is the new CMHC alternative in the Canadian Mortgage Market place. GE Capital like CMHC provides banks/lenders with mortgage insurance. Not to be confused with life or property insurance. In the event of default or foreclosure, GE Capital assumes responsibility of the property and reimburses the bank/lender the entire mortgage amount. This insurance is required generally when you have less than 25% equity or down payment. This insurance is paid by the property owner in advance but usually added to the mortgage amount. See also "CMHC." General Contractor A business or person who contracts for and takes responsibility for completing a construction project. The general contractor also hires, supervises, and pays all subcontractors and suppliers. Gift From a Family Member A monetary gift given to a mortgage applicant from his or her relative by blood or marriage. The gift cannot be money that must be re-paid and in some cases a written statement may be required by the lender as proof the funds are not a loan, but in fact a gift. Grace Period Refers to the interest-free time that lenders allow between the transaction date and the billing date if card users do not carry a balance. The standard grace period is typically between 20 and 30 days. If there is no grace period, finance charges accrue immediately at the time of purchase. Those who carry a balance on their Credit cards have no grace period. Gross Debt Ratio The ratio of the monthly housing payment in total (PIT -- Principal, Interest and Taxes) divided by the gross monthly income. This ratio is sometimes referred to as GDS. gross debt service ratio The total monthly mortgage (or rent) payments, property taxes, utilities and maintenance fees as a percentage of gross monthly income. Ideally, your ratio should not exceed 32%. Gross Domestic Product The total value of all the goods and services produced by the Canadian economy in a single year. Gross Income Annual income including overtime that is regular or guaranteed. The income may be from one source or multiple sources. Salary is generally the principal source, but other income may qualify if it is significant and stable. Gross National Product The value of all goods and services accruing to Canadians in a given year. It equals Gross Domestic Product, plus income of Canadians from foreign production, less income from Canadian production earned by non-residents (such as interest and dividends paid to foreign lenders). Gross Overtime Overtime pay before taxes that is averaged over two years can be considered monthly income, but it must be over the two years or it does not count. Gross Profit Margin The difference between the sales generated by a business and the costs paid out for goods or services. Ground Rent The rent paid by a lessee for the use of property or land only. Guarantee 1. A promise or assurance, typically in writing, that advocates the quality of a product or service. 2. A formal promise or collateral agreement made by an individual to answer for the debt of another in case he or she defaults. Guaranteed Investment Certificate An investment that pays a set rate of interest over a fixed period of time. guarantor (or covenanter) A person who promises to be responsible for the repayment of a loan. |
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