Mortgage Broker Licensing Practice Exam · Question
A client, Maria, wants to refinance her mortgage to take out equity for home renovations. Her current home value is $850,000, and she has an outstanding mortgage balance of $400,000. The lender's maximum LTV for a refinance is 80%. What is the maximum amount of equity she can take out, net of her existing mortgage?
Maximum mortgage amount = Home Value * Max LTV = $850,000 * 0.80 = $680,000. Equity available = Maximum Mortgage Amount - Current Mortgage Balance = $680,000 -
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Question: A client, Maria, wants to refinance her mortgage to take out equity for home renovations. Her current home value is $850,000, and she has an outstanding mortgage balance of $400,000. The lender's maximum LTV for a refinance is 80%. What is the maximum amount of equity she can take out, net of her existing mortgage?
Answer options:
- $280,000
- $320,000 ✅ $380,000
- $450,000
Correct answer: $380,000
Explanation: Maximum mortgage amount = Home Value * Max LTV = $850,000 * 0.80 = $680,000. Equity available = Maximum Mortgage Amount - Current Mortgage Balance = $680,000 - $400,000 = $280,000.
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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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