Mortgage Agent Licensing Practice Exam · Question
What is the primary purpose of mortgage default insurance?
Mortgage default insurance (e.g., from CMHC, Sagen, Canada Guaranty) protects the lender, not the borrower, against losses incurred if a borrower with a high-ra
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Question: What is the primary purpose of mortgage default insurance?
Answer options:
- To protect the borrower in case of job loss. ✅ To protect the lender from losses if the borrower defaults on a high-ratio mortgage.
- To cover the cost of property taxes if the borrower fails to pay.
- To guarantee a low interest rate for the borrower.
Correct answer: To protect the lender from losses if the borrower defaults on a high-ratio mortgage.
Explanation: Mortgage default insurance (e.g., from CMHC, Sagen, Canada Guaranty) protects the lender, not the borrower, against losses incurred if a borrower with a high-ratio mortgage defaults on their payments.
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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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