Mortgage Agent Licensing Practice Exam · Question
Which scenario necessitates mortgage default insurance for a residential mortgage in Canada?
Mortgage default insurance is mandated by Canadian regulations when the loan-to-value (LTV) ratio of a residential mortgage exceeds 80%, meaning the borrower ha
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Question: Which scenario necessitates mortgage default insurance for a residential mortgage in Canada?
Answer options:
- The borrower's credit score is below 680. ✅ The loan-to-value (LTV) ratio exceeds 80%.
- The interest rate on the mortgage is a variable rate.
- The amortization period chosen by the borrower is greater than 25 years.
Correct answer: The loan-to-value (LTV) ratio exceeds 80%.
Explanation: Mortgage default insurance is mandated by Canadian regulations when the loan-to-value (LTV) ratio of a residential mortgage exceeds 80%, meaning the borrower has made a down payment of less than 20% of the property's purchase price.
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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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