Mortgage Agent Licensing Practice Exam · Question
A client is offered a 'convertible' mortgage. What does this feature primarily allow the borrower to do?
A convertible mortgage allows the borrower to convert from a variable-rate to a fixed-rate mortgage, usually for a closed term, without incurring a prepayment p
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Question: A client is offered a 'convertible' mortgage. What does this feature primarily allow the borrower to do?
Answer options: ✅ Convert the mortgage from a variable rate to a fixed rate at any time without penalty.
- Convert the mortgage from a fixed rate to a variable rate at any time without penalty.
- Convert the mortgage from an open term to a closed term at any time without penalty.
- Convert the mortgage from a collateral charge to a standard charge at any time.
Correct answer: Convert the mortgage from a variable rate to a fixed rate at any time without penalty.
Explanation: A convertible mortgage allows the borrower to convert from a variable-rate to a fixed-rate mortgage, usually for a closed term, without incurring a prepayment penalty.
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Question explanations
- Which of the following is NOT a primary provider of mortgage default insurance in Canada?
- When must a mortgage agent provide the borrower with certain disclosures regarding the proposed mortgage, part
- Michael and Jennifer are applying for a mortgage to purchase a home in Calgary for $700,000. Their combined gr
- Which of the following scenarios would typically lead to a higher mortgage interest rate for a borrower?
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