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Mortgage Broker > Mortgage Defintions > Flashcards

Mortgage Defintions Flashcards

1
Q

CMHC

A

Canada mortgage housing Corp.
Mortgage loan insurance
LTV 80% or more to be insured under them

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2
Q

Real estate act

A

The legislation governing residential real estate, commercial ,property management,condominium management,& mortgage broker licenses

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3
Q

APR

A

Annual percentage rate

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4
Q

LTV

A

Loan to Value
Ex. Borrowed $400000 vs $500000
Appraised or asking whichever is lower

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5
Q

DTI

A

Debt(all debts)to Income

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6
Q

HELOC

A

Home Equity line of credit

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7
Q

HVAC

A

Heating,ventilation, air conditioning

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8
Q

RECA

A

Real estate council of Alberta

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9
Q

AMBA

A

Alberta mortgage brokers association
Voice of mortgage brokers, information, pre-licensing education, services

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10
Q

NOA

A

Notice of assessment
Tax line 150 for net income

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11
Q

TDS

A

Total debt service

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12
Q

FinTrac

A

Financial transactions and reports analysis center of Canada
Prevents money laundering and terrorist financing activities

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13
Q

Fixed rate mortgage

A

Interest rate stays the same over the term of the mortgage

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14
Q

Which act governs the practices of mortgage brokers in Alberta

A

Alberta real estate act

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15
Q

Key components of code of ethics for mortgage broker

A

Acting in best interest of clients

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16
Q

Main advantage of a variable rate mortgage

A

Potential for lower interest rates over time

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17
Q

How is mortgage insurance typically paid in Canada

A

Added to the mortgage principal and paid over the mortgage term

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18
Q

Which type of mortgage product allows the borrower to change from a variable rate to a fixed rate without penalty

A

Convertible mortgage

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19
Q

How often must a mortgage broker renew their license

A

Annually

20
Q

What does IO mean

A

Interest only mortgage

21
Q

Assumable mortgage

A

Process of acquiring a property that has an existing mortgage registered. Lender typically requires buyer to qualify under terms of existing mortgage

22
Q

Balloon payment

A

Final payment of the mortgage made on maturity date to retire the debt in full.

23
Q

Caveat

A

Legal notice registered against the property warning that a claim or an interest has been made against the property by a third party
Means :let him beware

24
Q

Index rate

A

Rate used by a lender to measure the difference between the current interest rate charged on an adjustable rate mortgage

25
Q

Interest only mortgage

A

A mortgage in which the borrower pays only the interest portion, with the principal balance unchanged. The principal is repaid in full at the end of the mortgage term

26
Q

Who are the three default mortgage insurers

A

CMHC,Segan,Canada guaranty

27
Q

What are the two types of title insurance?

A

Owners policy, protects person who owns the property(home owner,and lenders policy only protects lender

28
Q

What does time value of money mean?

A

Concept that sum of money is worth more now, then the same sum in the future

29
Q

5 variables of time value of money?

A

Present value(PV),future value(FV),number of periods(N),interest rate(I),payment amount(PMT)

30
Q

Annuity Loan?

A

Contract to pay back a loan with payments and interest

31
Q

What is capital stack ?

A

Different sources of financing that are used to fund a development property project(equity, debt, types of financing)

32
Q

Trailer fees on a mortgage

A

A small fee is paid out to mortgage broker every year buyer stays with that lender

33
Q

What is an underwriter ?

A

Where the lender gauges the credit worthiness of the borrower

34
Q

List of documents required to fulfill the conditions of approval

A

Verification of income-NOA
Verification of down payment/equity-money in bank or equity
Property type-
Property value-appraisal
Credit history-equifax or transunion

35
Q

As a mortgage broker if you suspect fraud report to:

A

RECA

36
Q

What are closing costs to getting a mortgage?

A

Land transfer taxes,legal fees,appraisal fees,title insurance

37
Q

What 4 components make up the Alberta real estate act?

A

The act, the rules,the bylaws, the regulations

38
Q

GDS(gross debt service)

A

Amount of principal, interest,property taxes, heating costs,if condominium 1/2 there fees(strata)

39
Q

CRM

A

Client relationship management

40
Q

What are the 5 C’s?

A

Character(credit history),Capacity(DTI, NOA, employment history),Capital(borrower net worth, and assets, money in bank),Collateral(LTV,assessment value),Conditions(loan terms,market conditions,purpose of loan)

41
Q

What is the purpose of the real estate assurance fund?

A

Provides financial compensation to those those that suffered fraudulent act or loss due to dishonest people(real estate agents, mortgage brokers, property managers. A safe guard for the consumer, and also to keep reputation up in the industry

42
Q

Which of the following has the authority to create bylaws governing the council?

A

Council

43
Q

The regulation as established by cabinet and lieutenant governor in council cover:

A

The administration of the Alberta Real Estate Foundation and the real estate assurance fund

44
Q

Which of the following may RECA amend?

A

The rules

45
Q

Which of the following may RECA amend?

A

The rules

46
Q

GDS. and TDS

A

Gds is PITH over gross income and TDS is PITH plus other debts over gross income
Cmhc only all gds-39% and tds-44%

Mortgage Broker (1 decks)

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