Financing & Mortgages Flashcards
6 cards from real BC Real Estate Trading Services Course practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Financing & Mortgages flashcards as text
In BC, a 'mortgage term' refers to:
Answer: The period during which the current interest rate and conditions are locked in before renewal
The mortgage term is the length of time the current rate, payment terms, and conditions apply before the mortgage must be renewed, renegotiated, or paid off. Common terms in Canada are 1-5 years.
Which federal crown corporation provides mortgage default insurance in Canada?
Answer: Canada Mortgage and Housing Corporation (CMHC)
CMHC is Canada's national housing agency and is the primary provider of mortgage default insurance. Sagen (formerly Genworth) and Canada Guaranty are private sector alternatives.
In BC, a 'blanket mortgage' is one that:
Answer: Covers more than one property as security for a single loan
A blanket mortgage uses two or more properties as security for one loan. It is commonly used by developers who may want to build on one lot while the mortgage covers multiple lots.
In BC, 'equity' in a home is defined as:
Answer: The fair market value of the property minus outstanding mortgage balances
Equity is the owner's net interest in the property: the current market value minus all outstanding secured debt (mortgages, home equity lines of credit). It grows as the property appreciates and the mortgage is paid down.
In Canada, the CMHC mortgage insurance premium for a 5% down payment is approximately:
Answer: 4.00% of the insured amount
For LTV of 95% (5% down), the CMHC premium is 4.00% of the mortgage amount. Premiums decrease as the down payment increases: 3.10% for 90% LTV and 2.80% for 85% LTV.
Under BC law, when a borrower defaults on a mortgage, the lender can pursue which primary remedy?
Answer: Foreclosure or judicial sale through the BC courts to recover the debt
In BC, mortgage foreclosure must proceed through the courts. The lender files a foreclosure petition, the court may order a 6-month redemption period, and if unredeemed, may order a judicial sale or vest title in the lender.