Which of the following scenarios best demonstrates a mortgage agent fulfilling their suitability assessment obligations?

Question: Which of the following scenarios best demonstrates a mortgage agent fulfilling their suitability assessment obligations?

Answer options:

• Recommending the lowest interest rate product available, regardless of the client's financial stability.
• Proposing a mortgage product with a high prepayment penalty to a client who explicitly stated they plan to sell their home within two years. ✅ Explaining the features, benefits, risks, and costs of several mortgage options, then recommending a product aligned with the client's financial goals and risk tolerance, after a thorough review of their financial situation.
• Only presenting mortgage options from lenders that offer the highest commission to the agent.

Correct answer: Explaining the features, benefits, risks, and costs of several mortgage options, then recommending a product aligned with the client's financial goals and risk tolerance, after a thorough review of their financial situation.

Explanation: Mortgage agents are required to perform a suitability assessment to ensure any mortgage product recommended is appropriate for the client. This involves understanding the client's needs, financial situation, and risk tolerance, and then recommending products that align with those factors, as outlined in FSRA requirements for consumer protection.