Lender

Definition

• A financial institution, such as a bank, or a mortgage company that offers and provides loans.

Synonyms
loan company, moneylender, lending institution, backer, financial backer

Related Terms and Acronyms

• Angel Investors — Definition,
  • Private individuals with capital to invest in business enterprises.
• Approval — Definition,
  • An assessment made by a lender of a borrower's ability to pay for a home and a confirmation of the amount the borrower may obtain.
• Assumption Fee — Definition,
  • A lender's charge for updating records when a buyer takes responsibility for a mortgage from the seller.
• Bank — Definition,
  • An institution that acts as a financial intermediary by receiving money from depositors and lenders and also lending to borrowers.
• Call Option — Definition,
  • A clause in a mortgage that gives the lender the right to request the balance at any time.
• Conditional Commitment — Definition,
  • A promise by a lender to make a loan if the borrower meets certain requirements.
• Conventional Mortgage — Definition, Important,
  • A mortgage that is not insured or guaranteed by CMHC or GE Capital.
• Credit — Definition,
  • Money that a lender gives to a borrower on condition of repayment over a certain period.
• Early Closing Cost Reimbursement — Definition,
  • Some line-of-credit lenders waive underwriting costs when a line is opened in anticipation of future profits. If a line is then closed early, these institutions impose those fees retroactively.
• Guaranty — Definition,
  • A promise to assume responsibility for a debt if the borrower defaults.
• Home Loan — Definition,
  • A loan used to buy a home is referred to as a "mortgage."
• Instalment — Definition,
  • The regular periodic payment that a borrower agrees to make the lender.
• Interest (IN, int) — Acronym & Abbreviation,
  • Money paid for the use of borrowed funds, usually expressed as an annual percentage.
  ➥ Bank account transaction code.
• Interest Factor — Definition,
  • The decimal equivalent for an interest rate on a unit amount for a period of time. Computed by interest rate divided by number of days in a basic year times the number of days accrued.
• Interest Rate (IR) — Acronym, Very Important,
  • The rate a lender charges an individual to borrow money.
• International Banking — Definition,
  • The operation of bank branches and subsidiaries located outside Canada. This area of banking also includes the supervision of correspondent banking relationships, foreign exchange trading, and trade finance.
• Kicker — Definition,
  • Any benefit to a lender above ordinary fixed-interest payments such as an equity position in a property or a percentage participation in the income stream.
• Lead Lender — Definition,
  • A financial institution which heads up a financial consortium or syndicate to provide funds for a mortgage.
• Loan — Definition,
  • Letting another party use something of value temporarily.
• Loan Application — Definition,
  • A document in which a prospective borrower details his or her financial situation to qualify for a loan.
• Loan Origination — Definition,
  • The process of applying for a loan and the handling of that application by a lender.
• Mortgage (mtg) — Abbreviation, Important,
  • A mortgage is a contract stipulating a specific real property, typically a residence or building, as collateral for a loan. The mortgage incurs a rate of interest that varies according to term and other features.
• Mortgage Banker — Definition, Important,
  • An employee of a large bank who finds financing for the general public.
• Mortgage Broker (MB) — Acronym, Important,
  • One who finds clients perspective lenders at generally no cost. Mortgage Brokers have a special relationship with lenders and can offer their clients the best rates and service. CanEquity goes through great lengths to ensure you are serviced by the best Mortgage Brokers in Canada.
• Mortgage Broker/Lender (MBL) — Acronym, Important,
• Mortgage Lender (ML) — Acronym, Very Important,
  • A lender that offers mortgages, often through a mortgage broker.
  ➥ Used internally by mortgage brokers and mortgage lenders.
• Mortgagee — Definition, Important,
  • The lender in a mortgage transaction.
• Non-recourse Debt — Definition,
  • A loan secured by collateral where the borrower is not personally liable.
• Portfolio Lender — Definition,
  • A company that underwrites mortgage loans and keeps them on the books instead of selling them on the secondary market.
• Pre-approval — Definition,
  • A process that mortgage lenders use to determine how much money they would lend you based on a thorough review of your financial situation. Lenders issue a pre-approval letter which strengthens your position when bidding on a home, as it shows sellers that you will be able to raise funds needed to purchase.
• Pre-Approval Expiry Date — Definition,
  • The date when a pre-approved mortgage expires, often 90 - 120 days after being pre-approved.
• Prime Lending Rate (PLR) — Acronym, Very Important,
  • The rate of interest charged on loans by chartered banks to their most creditworthy customers.
  ➥ Bank of Canada's prime (best) lending rate.
• Prime Rate — Definition,
  • The rate suggested by the Bank of Canada on which most banks base their prime mortgage lending rate.
• Private Lender — Definition,
  • A lender not associated with a traditional lender.
• Promissory Note (PN) — Acronym,
  • A written promise to repay a loan by a specified time.
• Provision for Credit Losses (PCL) — Acronym, Canada,
  • The amount deducted from income equal to the amount by which a bank adjusts its loan balances to reflect anticipated losses on them.
  • A margin set by companies to compensate for losses due to unpaid credit.
• Qualifying Ratios — Definition,
  • As calculated by lenders, the percentage of income that is spent on housing debt and combined household debt. The first qualifying ratio, called the gross debt service or GDS is up to and including a maximum of 32% of the combined gross family income. The second qualifying ratio is the Total debt service or TDS is up to and including 40% of gross income.
• Spread — Definition,
  • The difference between the interest rate charged to borrowers and the interest rate paid to depositors.
• Standby Commitment — Definition,
  • 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.
• Statement — Definition,
  • 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 and interest charges, ATM activity, etc.
• Third-party Originator — Definition,
  • One who takes all or part of the mortgage application and transfers or sells it to a lender.
• Workout — Definition,
  • A "mortgage workout" is when a lender works with a borrower on altering their existing mortgage terms in order to prevent a foreclosure.