Chapter 2 - Basic Mortgage Concepts Flashcards
Discuss the difference between a mortgage and a car loan
A mortgage is a loan secured by real property
A car loan is a loan secured by registering a loan against the car under the Personal Property Security Act
The difference is the security.
There are two mortgages registered against the title of Barbara’s property.One was registered on May 20, 2006 and the other was registered on March 17, 2005. Which is the 1st mortgage and which is the 2nd?
2005 - 1st mortgage
2006 - 2nd mortgage
Jonathan owns a house valued at $250,000 with a current 1st mortgage that has a balance of $190,000. Jonathan has credit card debts of $12,500 that he wishes to consolidate by increasing his first mortgage. Would Jonathan require a conventional or high ratio mortgage?
$190,000 + $12,500 = $202,500
$202,500 / $250,000 the Loan to Value would equal 81%
Jonathan would be obtaining a high ratio mortgage since this type of mortgage is considered an amount in excess of 80% Loan to Value
Describe the purpose of the Charge/Mortgage
Is a document that proves that a loan has been made using the borrower’s property as security
Name and describe 6 of the main Borrower obligations under a mortgage contract
1) Repay the loan
2) Insure the property
3) Maintain the property
4) Not to commit “waste”
5) Pay for property tax and/or condo maintenance fee
6) Follow the terms of the Standard Charge Terms
What are Standard Charge Terms?
Who is it completed by?
Where does it get registered with?
A document that outlines the Borrower’s obligations and the remedies available to the Lender if the Borrower does not meet these obligations. This document is completed by the Lender and must be registered with the Director of Titles under the Land Titles Act.
