OREA Mortgage Financing 1

Question 1

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

Accepted Answer

5% of the purchase price

Answer

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.

Question 2

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

Accepted Answer

As a charge

Answer

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.

Question 3

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

Accepted Answer

The total time required to fully repay the mortgage

Answer

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

Question 4

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

Accepted Answer

Canada Mortgage and Housing Corporation (CMHC)

Answer

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

Question 5

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

Accepted Answer

An open mortgage

Answer

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

Ontario Real Estate Practice Test

Ontario Real Estate Practice Test

OREA Mortgage Financing 1