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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

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20
Q

What does IO mean

A

Interest only mortgage

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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

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22
Q

Balloon payment

A

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

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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

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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

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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

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26
Q

Who are the three default mortgage insurers

A

CMHC,Segan,Canada guaranty

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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

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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

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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)

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30
Q

Annuity Loan?

A

Contract to pay back a loan with payments and interest

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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)

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32
Q

Trailer fees on a mortgage

A

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

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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%

47
Q

Macro economics-

A

How inflation and unemployment affect society

48
Q

Microeconomics

A

How individuals households and firms make decisions to allocate scarce resources

49
Q

GDP and GNP

A

Gross domestic product- output of economy
Gross national product- above but including abroad of all citizens and company’s

50
Q

GDP and GNP

A

Gross domestic product- output of economy
Gross national product- above but including abroad of all citizens and company’s

51
Q

Capital market

A

Transfers funds from savers to borrowers

52
Q

Fair trading act

A

Protects consumers from unfair business practices

53
Q

Law of property act

A

Provides legal principles regarding property rights- contracts, conveyances and mortgages

54
Q

Fee simple

A

After right of the crown, the individual owns the property as long as taxes and mortgage is paid

55
Q

In foreclosure proceedings, what happens after granting of an order nisi

A

A redemption period may be set depending on the nature of the property

56
Q

In foreclosure proceedings, what happens after granting of an order nisi

A

A redemption period may be set depending on the nature of the property

57
Q

What is Chattel

A

Personal property

58
Q

What best describes property

A

Rights inherent in the ownership of a commodity

59
Q

Precedent vs subsequent

A

Pre- before condition
Sub - opposite

60
Q

Eminent domain

A

Right of government to take land for the common good, but must be paid out

61
Q

Eminent domain

A

Right of government to take land for the common good, but must be paid out

62
Q

Escheat

A

If property taxes are not paid or owner dies without will no heir government can take ownership

63
Q

Lis pendens

A

Litigation is on progress

64
Q

Torren system

A

Where government has titles for all originals

65
Q

Order Nisi

A

Court order Allows borrower 6 month redemption period to pay up

66
Q

Steps of a foreclosure

A

Borrower defaults
Lender initiated demand letter
Lender files statement of claim-cert of lis pendens
Lender applies for order nisi -6 month redemption period
Lender applies for judicial sale
Lender applies for rice order
Lender applies for order of foreclosure
Lender applies for order of possession
Lender applies for order for appointment of receiver

67
Q

Incentive vs inducement

A

Incentive brokerage offer tickets, trips etc
Inducement brokerage ok ,paying for Maby clients lawyer fee, appraisal etc

68
Q

Incentive vs inducement

A

Incentive brokerage offer tickets, trips etc
Inducement brokerage ok ,paying for Maby clients lawyer fee, appraisal etc

69
Q

4 D’s

A

Decide,disclose,document,do

70
Q

4 D’s

A

Decide,disclose,document,do

71
Q

Tort law

A

Civil law suit, did something wrong in commission or omission
Duty of care to client

72
Q

Commodity

A

Raw material or product sold on the open market

73
Q

Addendum

A

After purchase contract is done, add on can be done for terms of contract (ex. Seller will get furnace cleaned, carpets cleaned extra)

74
Q

Addendum

A

After purchase contract is done, add on can be done for terms of contract (ex. Seller will get furnace cleaned, carpets cleaned extra)

75
Q

Addendum vs amendment

A

Addendum to add to contract
Amendment to change contract

76
Q

Addendum vs amendment

A

Addendum to add to contract
Amendment to change contract

77
Q

6-15-82-5w6

A

Legal subdivision section, section,township,range,meridian

78
Q

6-15-82-5w6

A

Legal subdivision section, section,township,range,meridian

79
Q

Market bubble

A

Temp situation in business cycle where prices become inflated beyond their reasonable value

80
Q

Market bubble

A

Temp situation in business cycle where prices become inflated beyond their reasonable value

Mortgage Broker (2 decks)

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