Mortgage Broker Licensing Practice Exam · Question
An investor, Mr. Chen, is purchasing a commercial property in Vancouver for $2,500,000. He plans to put down $750,000. The property generates a net operating income (NOI) of $150,000 annually. The proposed mortgage payment (Principal + Interest) is $10,000 per month. What is the Debt Service Coverage Ratio (DSCR) for this property?
DSCR is calculated as Annual Net Operating Income / Annual Mortgage Payments. In this scenario, $150,000 / ($10,000 * 12) = $150,000 / $120,000 = 1.25x.
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Question: An investor, Mr. Chen, is purchasing a commercial property in Vancouver for $2,500,000. He plans to put down $750,000. The property generates a net operating income (NOI) of $150,000 annually. The proposed mortgage payment (Principal + Interest) is $10,000 per month. What is the Debt Service Coverage Ratio (DSCR) for this property?
Answer options:
- 1.15x
- 1.20x ✅ 1.25x
- 1.30x
Correct answer: 1.25x
Explanation: DSCR is calculated as Annual Net Operating Income / Annual Mortgage Payments. In this scenario, $150,000 / ($10,000 * 12) = $150,000 / $120,000 = 1.25x.
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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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