Alberta Real Estate Licensing Exam Practice · Question
A buyer is purchasing a home in Calgary for $450,000. They have $50,000 for a down payment. What type of mortgage will they likely need?
A high-ratio mortgage is required when the down payment is less than 20% of the purchase price. In this case, $50,000 is less than 20% of $450,000 ($90,000), ne
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Question: A buyer is purchasing a home in Calgary for $450,000. They have $50,000 for a down payment. What type of mortgage will they likely need?
Answer options: ✅ A high-ratio mortgage requiring mortgage loan insurance.
- A conventional mortgage, as their down payment exceeds 20%.
- A vendor take-back mortgage.
- A secondary mortgage from a private lender.
Correct answer: A high-ratio mortgage requiring mortgage loan insurance.
Explanation: A high-ratio mortgage is required when the down payment is less than 20% of the purchase price. In this case, $50,000 is less than 20% of $450,000 ($90,000), necessitating mortgage loan insurance.
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