Mortgage Broker Licensing Practice Exam · Question
A lender offers a mortgage with an advertised rate of 4.00% compounded semi-annually. If there is a $500 mortgage origination fee and the mortgage amount is $200,000, what is the approximate Annual Percentage Rate (APR) for a 5-year fixed term?
The APR considers all borrowing costs. The mortgage origination fee of $500 effectively reduces the amount advanced to the client. The calculation of APR involv
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Question: A lender offers a mortgage with an advertised rate of 4.00% compounded semi-annually. If there is a $500 mortgage origination fee and the mortgage amount is $200,000, what is the approximate Annual Percentage Rate (APR) for a 5-year fixed term?
Answer options:
- 4.00% ✅ 4.05%
- 4.10%
- 4.15%
Correct answer: 4.05%
Explanation: The APR considers all borrowing costs. The mortgage origination fee of $500 effectively reduces the amount advanced to the client. The calculation of APR involves finding the interest rate that equates the present value of all payments to the net amount advanced.
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Question explanations
- What is the typical time frame for a mortgage agent to provide the required disclosure statement to a client?
- Funds received from a client or investor that the brokerage holds on their behalf must be deposited into:
- Ontario mortgage agents must complete which of the following at each licence renewal?
- Which entity is responsible for licensing and regulating mortgage brokers and agents in Ontario?
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