Mortgage Broker Licensing Practice Exam · Question
'Gateway Properties' is seeking CMHC MLI insurance for a new purpose-built rental apartment building in Halifax. The property's projected Net Operating Income (NOI) is $750,000 per year. The proposed mortgage loan is $12,500,000, with an annual debt service of $600,000 (after a 25-year amortization and current interest rates). What is the Debt Service Coverage Ratio (DSCR) for this project?
The Debt Service Coverage Ratio (DSCR) is calculated by dividing the Net Operating Income (NOI) by the annual debt service. Here, $750,000 / $600,000 = 1.25. Th
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Question: 'Gateway Properties' is seeking CMHC MLI insurance for a new purpose-built rental apartment building in Halifax. The property's projected Net Operating Income (NOI) is $750,000 per year. The proposed mortgage loan is $12,500,000, with an annual debt service of $600,000 (after a 25-year amortization and current interest rates). What is the Debt Service Coverage Ratio (DSCR) for this project?
Answer options: ✅ 1.25:1
- 1.15:1
- 1.30:1
- 1.05:1
Correct answer: 1.25:1
Explanation: The Debt Service Coverage Ratio (DSCR) is calculated by dividing the Net Operating Income (NOI) by the annual debt service. Here, $750,000 / $600,000 = 1.25. This ratio is crucial for CMHC MLI underwriting.
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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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