Definition of Draw

Draw

The amount of progress billings on a contract that is currently available to a contractor under a contract with a fixed payment schedule.

Architect

One who has completed a course of study in building and design, and is licensed by the state as an architect. One who draws up plans and sometimes supervises the construction of homes.

Construction Documents

All drawings, specifications and addenda associated with a specific construction project.

Insured Retirement Plan

This is a recently coined phrase describing the concept of using Universal Life Insurance to tax shelter earnings which can be used to generate tax-free income in retirement. The concept has been described by some as "the most effective tax-neutralization strategy that exists in Canada today."
In addition to life insurance, a Universal Life Policy includes a tax-sheltered cash value fund that cannot exceed the policy's face value. Deposits made into the policy are partially used to fund the life insurance and partially grow tax sheltered inside the policy. It should be pointed out that in order for this to work, you must make deposits into this kind of policy well in excess of the cost of the underlying insurance. Investment of the cash value inside the policy are commonly mutual fund type investments. Upon retirement, the policy owner can draw on the accumulated capital in his/her policy by using the policy as collateral for a series of demand loans at the bank. The loans are structured so the sum of money borrowed plus interest never exceeds 75% of the accumulated investment account. The loans are only repaid with the tax free death benefit at the death of the policy holder. Any remaining funds are paid out tax free to named beneficiaries.
Recognizing the value to policy holders of this use of Universal Life Insurance, insurance companies are reworking features of their products to allow the policy holder to ask to have the relationship of insurance to investment growth tracked so that investment growth inside the policy may be maximized. The only potential downside of this strategy is the possibility of the government changing the tax rules to prohibit using a life insurance product in this manner.

Policyowner

The person who owns and holds all rights under the policy, including the power to name and change beneficiaries, make a policy loan, assign the policy to a financial institution as collateral for a loan, withdraw funds or surrender the policy.

Pre-Authorized Cheque (PAC)

Withdrawals generated by a company (with client's permission) against a client's bank account on a predetermined schedule for a predetermined amount.

Agreement of Purchase and Sale

A legal agreement that offers a certain price for a home. The offer may be firm (no conditions attached), or conditional (certain conditions must be fulfilled before the deal can be closed).

Allowance

A sum of mOney set aside in the construction contract for items which have not been selected and specified in the construction contract. For example, selection of tile as a flooring may require an Allowance for an underlayment material, or an electrical Allowance which sets aside an amount of mOney to be spent on electrical fixtures.

Area Walls

Corrugated metal or concrete barrier wAlls instAlled around a basement window to hold back the earth.

aterial used to cover the interior framed areas of walls and ceilings

Automatic Benefits Payment

Automatic payment of mOneys derived from a benefit.

Ballast

A transformer that steps up the voltage in a florescent lamp.

Balloon

A loan that has a series of monthly payments with the remaining balance due in a large lump sum payment at the end.

Balloon Framed Wall

Framed wAlls (generAlly over 10' tAll) that run the entire vertical length from the floor sill plate to the roof. This is dOne to eliminate the need for a gable end truss.

Blended Payments

payments consisting of both a principal and an interest compOnent, paid on a regular basis (e.g. weekly, biweekly, monthly) during the term of the mortgage. The principal portion of payment increases, while the interest portion decreases over the term of the mortgage, but the total regular payment usuAlly does not change.

Building Code

A comprehensive set of laws that controls the construction or remodeling of a home or other structure.

Built-Up Roof

A roofing composed of three to five layers of asphalt felt laminated with coal tar, pitch, or asphalt. The top is finished with crushed slag or gravel. GenerAlly used on flat or low-pitched roofs.

Bull Nose Drywall

Rounded drywAll corners.

Drive Under

A style of home where the garage is located in a basement.

Earnest money

A deposit made by potential home buyers during negotiations with the seller. The sum shows a seller that a buyer is serious about purchasing the property. The mOney usuAlly is counted toward the down payment.

Estate Planning

An insurance program designed to provide funds for insured's dependents upon death of the insured, and to also conserve, as much as possible, the personal assets that the insured wants to bequeath to heirs.

Fiat Money

Fiat MOney is paper currency made legal tender by law or fiat. It is not backed by gold or silver and is not necessarily redeemable in coin. This practice has had widespread use for about the last 70 years. If governments produce too much of it, there is a loss of confidence. Even so, governments print it routinely when they need it. The value of fiat mOney is dependent upon the performance of the economy of the country which issued it. Canada's currency fAlls into this category.

Fixed-Rate Mortgage

A mortgage for which the rate of interest is fixed for a specific period of time (the term).

Gable End Wall

The triangular end of an exterior wAll above the eaves formed under a gable roof.

GFI -See Ground Fault Current Interrupter

Ground Fault Current Interrupter

An electrical device used to prevent injury from contact with faulty electrical appliances and faulty wiring
electrical shocks. GFIs should not be confused with AFIs, the later are designed to prevent electrical fires. GFIs are required in new home bathrooms, kitchen, garage, out of doors and in other locations where One might be in contact with a grounded surface or body of water and an electrical appliance. Most GFI's are located in the receptacle itself or a curcuit breaker and can be identified by the presence of a 'test' and a 'reset' button.

Group Life Insurance

This is a very common form of life insurance which is found in employee benefit plans and bank mortgage insurance. In employee benefit plans the form of this insurance is usuAlly One year renewable term insurance. The cost of this coverage is based on the average age of everyOne in the group. Therefore a group of young people would have inexpensive rates and an older group would have more expensive rates.
Some people rely on this kind of insurance as their primary coverage forgetting that group life insurance is a condition of employment with their employer. The coverage is not portable and cannot be taken with you if you change jobs. If you have a change in health, you may not qualify for new coverage at your new place of employment.
Bank mortgage insurance is also usuAlly group insurance and you can tell this by virtue of the fact that you only receive a certificate of insurance, and not a complete policy. The only form in which bank mortgage insurance is sold is reducing term insurance, matching the declining mortgage balance. The only beneficiary that can be chosen for this kind of insurance is the bank. In both cases, employee benefit plan group insurance and bank mortgage insurance, the coverage is not guaranteed. This means that coverage can be cancelled by the insurance company underwriting that particular plan, if they are experiencing excessive claims.

Interest Rate Differential Amount (IRD)

An IRD amount is a compensation charge that may apply if you pay off your mortgage principal prior to the maturity date or pay the mortgage principal down beyond the prepayment privilege amount. The IRD amount is calculated on the amount being prepaid using an interest rate equal to the difference between your existing mortgage interest rate and the interest rate that we can now charge when re-lending the funds for the remaining term of the mortgage. For more information, click on compensation amounts.

Intestate

This means dying without a will, in which case the provincial laws of the province in which the death occurred apply to the manner in which assets will be distributed. In other words, if you don't write your own will, the government will do it for you after your death and it may not be as you would have wished.

Knee Wall

A wAll-like structure that supports roof rafters.

Life Underwriter

Insurance Agent.

Load-Bearing Wall

Includes All exterior wAlls and any interior wAll that is aligned above a support beam or girder. NormAlly, any wAll that has a double horizontal top plate.

Metal Insulation Support

16" or 24" wire rod or crisscrossed wire to hold floor insulation in place.

Money Laundering

This is the process by which "dirty mOney" generated by criminal activities is converted through legitimate businesses into assets that cannot be easily traced back to their illegal origins.

Nonbearing Wall

A wAll supporting no load other than its own weight.

Paid-Up Additions

A type of insurance policy or annuity in which the owner receives dividends, typicAlly increases the death.

Palladian Window

One larger window with a circle top window above and usuAlly has two smAller, rectangular windows on each side.

Payment Frequency

The choice of making regular mortgage payments every week, every other week, twice a month or monthly.

Prepayment Charge

A fee charged by the lender when the borrower prepays All or part of a closed mortgage more quickly than is set out in the mortgage agreement.

Prepayment Option

The ability to prepay All or a portion of the principal balance. Prepayment charges may be incurred on the exercise of prepayment options.

Reinstatement

This is the restoration of a lapsed life insurance policy. The life insurance company will require evidence of continuing good health and the payment of All past due premiums plus interest.

Roof Valley

The "V" created where two sloping roofs meet.

Trombe Wall

A passive solar wAll, usuAlly masonry or concrete, used for passing heat from One room (like a sun room or solar garden room) to another.

Underwriter

This could be the person (broker or agent) who helps you choose the proper type of life insurance or disability insurance and the insurance company for your particular needs. This could also be the person at the insurance company's head office who reviews your application for coverage to determine whether or not the insurance company will issue a policy to you.

Underwriter

Person that uses various types of evidence to evaluate the insurability of a client.

Underwriting

Evaluating and classifying potential risk of a client.

Wall Out

When a painter spray paints the interior of a home.

Whole Life

CompOnent that provides life coverage during the insured's life.

Zone

The section of a building that is served by One heating or cooling loop because it has noticeably distinct heating or cooling needs. Also, the section of property that will be watered from a lawn sprinkler system.

Zone Valve

A device, usuAlly placed near the heater or cooler, which controls the flow of water or steam to parts of the building; it is controlled by a zOne thermostat.

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