Mortgage Financing Flashcards

What is the minimum down payment required in Canada for a home purchase priced at $500,000?

Answer: 5% of the purchase price

For homes priced at $500,000 or less in Canada, the minimum down payment required is 5% of the purchase price under federal mortgage rules.

Under Ontario's Land Titles Act, how is a mortgage registered against a property?

Answer: As a charge

Under Ontario's Land Titles Act, a mortgage is registered as a charge on title, giving the lender a security interest in the real property.

Which of the following best describes the 'amortization period' in mortgage financing?

Answer: The total time required to fully repay the mortgage

The amortization period is the total time required to fully repay the mortgage loan, typically 20 to 25 years for insured mortgages in Canada.

Which federal Crown corporation is the primary provider of mortgage default insurance in Canada?

Answer: Canada Mortgage and Housing Corporation (CMHC)

CMHC is the primary federal Crown corporation providing mortgage default insurance in Canada, protecting lenders in the event of borrower default.

A mortgage that allows the borrower to repay the full balance at any time without penalty is called:

Answer: An open mortgage

An open mortgage allows the borrower to make additional payments or repay the full mortgage balance at any time without incurring prepayment penalties.

What is the maximum amortization period permitted for a standard insured (high-ratio) mortgage in Canada?

Answer: 25 years

The maximum amortization period for most insured mortgages in Canada is 25 years, as required by federal mortgage insurance rules.

In Ontario, the Mortgage Brokerages, Lenders and Administrators Act (MBLAA) is administered by:

Answer: The Financial Services Regulatory Authority of Ontario (FSRA)

The FSRA administers the MBLAA and is responsible for regulating mortgage brokers, agents, brokerages, and administrators in Ontario.