mock 5 Flashcards
Archie and Veronica have recently purchased a new home, partially financed by a mortgage loan. They would like to know the amount by which the principal is reduced during the five year term of their $175,000 mortgage written at J2=14% with a 25 year amortization. Assume the monthly payments are rounded to the next higher dollar and paid when due. The principal reduction is:
$170,000
$168,991.31
$6,008.69
$5,947.62
$6,008.69
Which of the following would appear as CREDITS on the purchaser’s statement of adjustments?
Assumption of an existing first mortgage, purchaser’s share of paid taxes, real estate commission.
Agreement for sale, deposit paid into brokerage’s trust account, vendor’s share of taxes not yet due.
Legal fees to discharge an existing mortgage, proceeds of new first mortgage, deposit paid into the brokerage’s trust account.
Legal fees for conveyance, legal fees for discharging an existing mortgage, vendor’s share of taxes not yet due.
Agreement for sale, deposit paid into brokerage’s trust account, vendor’s share of taxes not yet due.
An appraiser using the comparative method of the appraisal in estimating a single-family house can use sale prices of the following comparative properties EXCEPT:
Houses in different neighborhoods
Houses recently sold between relative parties
Houses with different square footage
Houses sold over three months ago
Houses recently sold between relative parties
A ten story apartment building in New West generates an annual net operating income of $15,000. Subject to a debt coverage ratio of 1.22, the bank is willing to grant the owners of the apartment building a loan at J2 = 10% with quarterly payments, a 15 year amortization period, and an 8 year term.
$95,670
$96,460
$114,550
$71,760
$95,670
As a borrower of mortgage funds, which of the following rates would you choose ?
A. 3.95% per annum, compounded monthly
B. 4.25% per annum, compounded annually
C. 4% per annum, compounded semi-annually
Rate A
Rate B
Rate C
Impossible to determine
Rate A
Which of the following statements regarding the stress test borrower qualification rule for uninsured mortgages is TRUE?
The mortgage qualifying rate is always based on an additional 2% above the mortgage’s negotiated contract rate.
The stress test mortgage qualifying rate is also known as the benchmark interest rate.
The Financial Institutions Commission of BC established the stress test requirements for all new mortgages from federally chartered institutions.
The stress test qualification rules only apply to mortgages from credit unions.
The stress test mortgage qualifying rate is also known as the benchmark interest rate.
Which one of the following statements is FALSE?
In an entirely residential condominium complex, a bylaw must be amended by a ¾ vote of the strata corporation.
If a rule conflicts with a bylaw, the bylaw prevails.
Subject to some exemptions, a bylaw may prohibit the rental of strata lots in the condominium complex.
Assuming the standard bylaws have not been amended, the strata council may pass rules with respect to the safety and cleanliness of individually owned strata lots.
Assuming the standard bylaws have not been amended, the strata council may pass rules with respect to the safety and cleanliness of individually owned strata lots
Lydia has been awarded a judgement of $100,000 against Clive. If Clive refuses to pay the amount ordered, what are Lydia’s options for enforcing the judgment?
She may have Clive fined for contempt of court.
She may register her judgment in the land title office and apply to the court for a judicial sale of Clive’s property.
She may apply to have a garnishing order served on Clive’s employer, ordering the employer to pay all of Clive’s wages into court, whereupon Lydia could then apply to have it paid out to her.
She may do all of the above.
She may register her judgment in the land title office and apply to the court for a judicial sale of Clive’s property.
Which of the following statements regarding the comparative method of appraisal is TRUE?
The comparative method of appraisal should be used for a property which possesses latent value
To apply the comparative method of appraisal, the appraiser estimates the market value of the subject property using as evidence the sale prices of similar properties which were sold at any time prior to the appraisal
The comparative method of appraisal is the most inexact approach for finding market value since cost and market value are not necessarily equal at any particular time
The comparative method reflects market behavior and requires a minimum of subjective opinion from the appraiser
The comparative method reflects market behavior and requires a minimum of subjective opinion from the appraiser
The principle of substitution in the comparative method of appraisal states that:
“market value” equals “value to owner”.
similar properties which have recently sold are comparable.
properties have to be identical in order to be comparable.
the market value of land plus the cost of a newly constructed building equals the market value of a property.
similar properties which have recently sold are comparable.
Which of the following statements made during a recent discussion about ownership is TRUE?
A. A corporation is subject to income tax, unlike a partnership.
B. Only shareholders are entitled to manage a corporation in accordance with the Consumer Protection Act.
C. A corporation whose shares are traded on a stock exchange is referred to as a private company.
D. Individuals who acquire shares in a company do not own the assets of the company.
Only statements A and D are true
Only statements A, B and C are true
Only statements B and D are true.
A, B C and D are true.
Only statements A and D are true
You have a partially completed appraisal report that you need to fill in. The subject property has 4 bedrooms and 5 bathrooms. The house next door is similar in all respects except for the number of bedrooms and bathrooms. It sold for $321,000 and has 3 bedrooms and 4 bathrooms. If the market value of a bedroom is $3,200 and the market value of a bathroom is $5,700, this comparable will have to be adjusted for bedrooms and bathrooms by:
+$3,200 and –$5,700 respectively.
+$3,200 and +$5,700 respectively.
$0 and –$6,400 respectively.
–$3,200 and +$6,400 respectively.
+$3,200 and +$5,700 respectively.
Which of the following statements about the principle of indefeasibility is FALSE?
In British Columbia, there are a number of exceptions to the principle of indefeasibility.
The principle of indefeasibility is inconsistent with the common law doctrine of the void deed.
Legal mortgages, but not equitable mortgages, are guaranteed by the principle of indefeasibility in British Columbia.
The guarantee of title is the key feature of Torrens system.
Legal mortgages, but not equitable mortgages, are guaranteed by the principle of indefeasibility in British Columbia.
An acquaintance of yours has approached you and wants to know why the bank, which may finance his purchase of a house, requires an appraisal. He claims that since an appraisal is not required for an investment in stocks, an appraisal should not be required for an investment in real property. Which one of the following statements provides the BEST reasoning for your support of the bank’s requirement?
The high turnover of real estate relative to stocks means that only an expert can keep up with changing values.
The local nature of the real estate market implies that the flow of information will be unlimited and easy to assemble.
It is difficult to find real properties that are very much alike.
All of the above statements are true.
It is difficult to find real properties that are very much alike.
The promotional Mix is a blend of:
publicity, sales promotion, public relations, advertising and personal selling
product, price, personal appearance, public relations and sales promotions
product, niche marketing, public relations, pricing and personal marketing
product, price, place and personal appearance
publicity, sales promotion, public relations, advertising and personal selling
“Reproduction cost” is best defined as:
the current construction cost of a building which would provide the same utility as the subject property.
the current cost of moving the building to a site where the building would represent the highest and best use of that site.
the current cost of constructing an exact replica of the subject property.
the original cost of construction, adjusted for inflation.
the current cost of constructing an exact replica of the subject property.
Which of the following is an offence under the Competition Act?
Failure to disclose a conflict of interest
Charging an excessive rate of interest
Agreements in restraint of trade
Committing mortgage fraud
Agreements in restraint of trade
A borrower has arranged a loan of $285,000 at an interest rate of 5% per annum, compounded semi-annually with payments set as $2,157 per month. What is the period necessary to amortize the loan?
Exactly 191.280574401 years
Exactly 240 months
Approximately 13 years
Approximately 16 years
Approximately 16 years
A young administrative assistant has applied to her bank for a mortgage loan to enable her to purchase a house. Her income is $35,000 per year. The bank informs her that they will apply a 30% gross debt service ratio when calculating her maximum loan, and that current mortgage rates are 20% per annum, compounded monthly for 20 year term mortgages. Given that annual property taxes are $975.00, and mortgage payments are to be made monthly, what is the maximum mortgage loan the bank will grant?
$51,384.30
$50,308.24
$46,723.48
$45,346.54
$46,723.48
Where a borrower feels that the amount of interest being charged is excessive, under which statute might relief be granted?
The Interest Act
The Business Practices and Consumer Protection Act
The Land Title Act
All of the above
The Business Practices and Consumer Protection Act
A monthly payment is divided in half, and, instead of paying once a month, is paid every two weeks. This way the borrower makes one extra monthly payment per year, thus paying down the principal faster and paying less interest. This is:
Monthly payment
Accelerated bi-weekly payment
Interest only payment
Interest accruing payment
Accelerated bi-weekly payment
Mickey recently entered the real estate market and is in the process of setting up his office. He is currently looking for client management software that can provide functions specifically aimed towards the real estate industry. Which of the following criteria should Mickey consider before choosing real estate client management software for his office?
Software that can maintain client contact history for future reference.
Software that is able to record client information, such as birthdays.
Software that allows for varied searching functions for targeted marketing.
All of the above.
All of the above.
ich of the following statements are FALSE?
A. The BC Supreme Court acts as a trial court only
B. An appeal from Small Claims Court is to the BC Court of Appeal.
C. The Supreme Court of Canada is the highest appellate court in Canada.
D. The BC Supreme Court is the highest trial level court in this province.
Only A and B
Only C and D
Only A and C
Only B and D
Only A and B
Which of the following scenarios would result in he termination of an agency relationship?
An oral revocation of the agency relationship by the principal.
An oral revocation of the agency relationship by the agent.
The death, insanity or bankruptcy of the principal or the agent.
All of the above.
All of the above.