Real Estate Glossary: U

Umbrella Mortgage
A specific arrangement where one document encompasses one or more already existing mortgages registered on the same property. The mortgagee is responsible for remission of payment(s), to lender(s), while the mortgagor makes one payment to the mortgagee. Also referred to as a wraparound.

Underwriting
To support or agree to (a decision, for example). In real estate, underwriting refers to the analysis of the risk involved for a lender to grant a mortgage loan and whether or not the risk is acceptable. Underwriting involves a property evaluation as outlined in the appraisal report, and an evaluation of the borrower’s ability and willingness to repay the loan.

Unearned Income
This type of income can include funds that are gained from interest, dividends, investments, or capital gains as opposed to income that is earned by working for a salary, hourly wage, or gratuity.

Unsecured Debt
Debt that is not guaranteed by collateral is considered unsecure because there is no assurance for repayment. Most credit cards are unsecured debt, which is why the interest rates are higher than other forms of lending, such as mortgages, which use property as collateral.

Unsecured Loan
A type of loan that is given to a borrower without collateral such as property that is acceptable as security for the loan.

Up-front Costs
Certain costs must be paid when signing a vehicle lease agreement before the dealership will release the vehicle to the buyer. These costs might include the first payment, a refundable security deposit, a down payment, taxes, registration, and other fees.

Upgrades
When buying a newly built property such as a house or condominium, the builder gives the buyer the option to select higher-quality floor coverings, cabinets, windows, fixtures, etc. at an additional cost to the buyer. If the buyer decides not to purchase upgrades, he or she can simply select the standard options offered by the builder.

Up-zoning
The practice of changing the zoning in an area typically from residential to increased commercial use. This is a controversial practice because upzoning allows for greater density and conjestion in the area which affects the current occupants. The term can also apply when changing the zoning to limit growth and density.

Useful Life
The number of years in which business property that will depreciate in value is expected to be productive and in use for the business.

Usurious Rate
An interest rate that is unnecessarily high or well above legal rates. For example, sometimes intangible property taxes are applied to income from usurious rates.

Usury
The act or practice of lending money and charging the borrower interest at an exorbitant or illegally excessive rate.

Posted by:  Deya Bautista - Affiliated Real Estate Agent working as part of the McGill Immobilier team. Specializing in condos and revenue property in the metropolitan area of Montreal. For buying or selling contact Deya at: 514.917.7889

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