Mortgage Broker Licensing Practice Exam · Question
A mortgage broker is reviewing a commercial mortgage application for a multi-family building. The property's Net Operating Income (NOI) is $600,000 per year, and the lender requires a minimum DSCR of 1.25. What is the maximum annual debt service that can be supported by this property?
To find the maximum annual debt service (DS), rearrange the DSCR formula: DS = NOI / DSCR. So, $600,000 / 1.25 = $480,000. Adhering to the DSCR ensures adequate
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Question: A mortgage broker is reviewing a commercial mortgage application for a multi-family building. The property's Net Operating Income (NOI) is $600,000 per year, and the lender requires a minimum DSCR of 1.25. What is the maximum annual debt service that can be supported by this property?
Answer options: ✅ $480,000
- $750,000
- $600,000
- $400,000
Correct answer: $480,000
Explanation: To find the maximum annual debt service (DS), rearrange the DSCR formula: DS = NOI / DSCR. So, $600,000 / 1.25 = $480,000. Adhering to the DSCR ensures adequate cash flow for debt obligations.
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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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