Mortgage Agent Licensing Practice Exam · Question
What is the primary implication of a 'closed mortgage' for a borrower?
A closed mortgage typically offers a slightly lower interest rate than an open mortgage but comes with strict limitations and/or penalties if the borrower wishe
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Question: What is the primary implication of a 'closed mortgage' for a borrower?
Answer options:
- It means the mortgage cannot be paid off early. ✅ It implies strict limits or penalties for prepaying the mortgage beyond small, specified amounts.
- The interest rate is always fixed.
- It allows for unlimited prepayment options.
Correct answer: It implies strict limits or penalties for prepaying the mortgage beyond small, specified amounts.
Explanation: A closed mortgage typically offers a slightly lower interest rate than an open mortgage but comes with strict limitations and/or penalties if the borrower wishes to make significant lump-sum payments or pay off the mortgage entirely before the end of the term.
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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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