OREA Mortgage Financing 3

Question 1

Under Canada's mortgage stress test (OSFI B-20 guidelines), uninsured mortgage applicants must qualify at:

Accepted Answer

The higher of the contract rate plus 2% or the OSFI minimum qualifying rate

Answer

Exactly the contract rate negotiated with the lender

Answer

The Bank of Canada overnight lending rate

Answer

The prime rate plus 0.5%

Question 2

A mortgage commitment letter from a lender typically includes:

Accepted Answer

The approved loan amount, interest rate, term, amortization, and any conditions

Answer

Only the maximum purchase price the buyer can afford

Answer

The legal title search results for the subject property

Answer

The mortgage default insurance premium calculation only

Question 3

The maximum Total Debt Service (TDS) ratio most institutional lenders in Canada will accept is:

Accepted Answer

44%

Answer

32%

Answer

50%

Answer

36%

Question 4

When a buyer assumes an existing mortgage, the original borrower:

Accepted Answer

May remain liable for the debt unless the lender formally releases them

Answer

Is automatically released from all mortgage obligations upon transfer

Answer

Must pay a penalty equal to three months' interest before release

Answer

Cannot transfer the mortgage without fully discharging and refinancing it

Question 5

Mortgage default insurance (such as CMHC insurance) is designed to protect:

Accepted Answer

The lender against losses if the borrower defaults

Answer

The borrower against unexpected interest rate increases

Answer

The buyer against undisclosed property defects

Answer

The seller against buyer non-performance on closing

Question 6

A mortgage discharge in Ontario refers to:

Accepted Answer

The formal removal of a mortgage from property title after the debt is fully repaid

Answer

The transfer of a mortgage obligation from one lender to another

Answer

The cancellation of a mortgage application before funding

Answer

The early termination of a mortgage prior to the end of the agreed term

Question 7

In Ontario, who is legally authorized to prepare and register mortgage documents?

Accepted Answer

A licensed lawyer

Answer

A registered mortgage broker

Answer

A licensed real estate salesperson

Answer

A certified title insurance agent