Test 2 Flashcards
What are the types of homes?
Single-family detached,
Semi-detached (one wall shared),
Duplex,
Townhouse (two walls shared),
Carriage home (detached garage with home over),
Mobile home,
Condo,
Apartment.
What is a pre-approval certificate?
Does it guarantee the approval of the loan?
A pre-approval certificate is a guideline on how big of a mortgage you can afford.
It does not guarantee the approval of such mortgage.
It is free of charge.
What is the GDS?
What does it calculate?
What % GDS do you need to qualify?
The GDS is the Gross Debt Service.
It calculates the ratio between your monthly mortgage related debt payments (mortgage, half of condo fees, heating, property taxes) divided by your monthly income.
You need a 32% or lower GDS to qualify, but this is in the bank’s interest, as this is how they’ll make the most money.
What is the TDS?
How is it calculated?
What do you need to qualify?
The TDS is teh total debt service.
It’s a ratio that calculates your mortgage related debt payments + any other debt payments divided by your total montly gross household income.
You need 40% or lower to qualify, but this would mean living paycheck to paycheck afterwards most probably.
What is the HBP?
How much money does it unlock?
The home buyer’s plan allows first time home buyers to take money out of their RRSP.
Each buyer can take up to $35,000, interest free.
They get up to 15 years to pay it back.
What criteria should we use to select a home?
Price,
Location,
Maintenance,
Nearby schools,
Insurance,
Property taxes,
Resale value,
Personal preferences.
Who pays commission on the sale of a home?
Is it negotiable?
The seller.
Yes.
What can be included in a home buying offer contract?
Conditions such as inspection, move in date, approval of mortgage.
What is particular for houses that are sold because of a repossession of the bank?
They have no legal warranty, meaning you cannot sue the seller for hidden defect.
What is a conventional mortgage?
What is the opposite of a conventioanl mortgage?
A mortgage where the down payment was at least 20% of the home’s appraised value.
A high ratio mortgage is a mortgage where the down payment is less than 20% of the home’s apprased value.
What are non-traditional sources for a down payment?
Borrowed money,
Lender cash back incentives,
gifts.
What is a vendor take-back mortgage?
A mortgage where the buyer makes payments directly to the seller. The property title transfers to the buyer, but transfers back as soon as the buyer defaults on a payment.
What are the closing costs of a home?
Home inspection fee,
Appraisal Fee (get a profesional evaluation of the home’s value),
Air quality test,
Real Property report (terrain limitations),
Taxe de bienvenue (land transfer tax),
Notary fees,
GST/HST for a brand new home,
Title insurance,
Interest adjustment,
Prepaid property tax,
Homeowner’s insurance,
Loan Protection + Disability insurance.
What is the amortization period?
What is the mortgage term?
The number of years that it’s expected to take to pay back the mortgage loan. Usually 25 years.
The length of the contract for the mortgage interest rate, usually 6 months to 5 years.
What is payment frequency?
What is accelerated weekly?
The frenquency of the payments.
Instead of taking the monthly amount and doing x12/52, you take the monthly amount and divide it by 4.
It makes you pay back your loan faster.
What are the types of mortgages?
Closed mortgages: doesn’t allow you to pay off more than the agreed amount without penalty. Usually lower interest rates.
Open mortgage: allows you to pay off the mortgage balance at any time during the mortgage term.
Does a longer amortization period increase, reduce, or not change the total interst paid on a mortgage?
A longer amortization period increases the total amount of interest paid on a mortgage.
What are the two types of mortgages you can buy?
When is each to be considered?
What does it mean when a mortgage is convertible?
Fixed rate mortgages and variable rate mortgages. When the rates are low, fixed is prefered, but when the rates are so high that they can only fall, variable might be the play.
A convertible rate means that it can be changed from variable to fixed, for example when the rates are increasing.
Which is paid first? The interest or the loan?
The interest is paid first, in the first years of the amortization period, almost no principal is paid on the loan, only interest is paid.
What is mortgage refinancing?
Paying off an existing mortgage with a new mortgage that has a lower interest rate. This can be good when the prepayment penalties and closing costs are less than the savings.
What is an alternative to mortgage refinancing?
Blend and extend, which is revising the mortgage rate to reflect the current rates.
What is the maximum percentage of your gross revenue that you should ideally spend on rent?
25%
Can a future landlord ask to see your credit score before letting you rent the place?
The landlord may require a backer, what is that?
Yes, he must ask you before checking your credit though.
A backer is someone who will cosign the lease, and will pay in case of payment defaults on your part.
What does a signature of a request of apartment (conditional lease) entitle for the tenant and the landlord?
For the landlord, this guarantees that the tenant actually rents the place upon signature of said contract.
For the tenant, it does NOT guarantee that the landlord will give him or her the place.
How long does the landlord have to give you a copy of the lease?
10 days after signing it.
What is the mandatory length for a lease?
There is no mandatory length, it is usually 1 year but it can be any amount of time.
What is the landlord allowed to ask in terms of fees when signing the lease?
Only first months rent, nothing else.
What are the two types of room-mates?
Joint obligations: both room-mates are responsible for their share of the rent due. (This is the default setting)
Solidary obligations: each room-mate is responsible for the entirety of the rent, if one defaults, the other is responsible for the entire thing.
Whe subleasing an appartment, who is responsible for the lease?
How long before subletting must you send a notice to your landlord? Can he refuse?
The original tenant, not the occupant.
The landlord must be noticed 15 days in advance, and he cannot refuse unless he has serious motives.
A non-response is considered an agreement.
When is rent due?
Can the landlord require post-dated checks?
1st of every month.
No.
Can the landlord increase rent during the length of the lease?
How long in advance must the landlord notify you of a rent increase?
How long do you have to reply?
What happens if you don’t reply?
No.
3-6 months.
One month following the notice.
It is considered that you’ve accepted the rent change.
What is the deadline to tell your landlord you want to move out?
You must let the landlord know 3-6 months in advance if you do not want to renew your lease.
If you are a tenant and there are urgent repairs to do, but your landlord does not react quickly, what can you do?
Inform yourself at the Régie du Logement, they might tell you to proceed with the repairs and charge your landlord.
You cannot deduct the price of the repairs from the rent.
Does the landlord have to give you compensation if he requires you to relocate during renovations?
What repairs must be done by the tenant?
Yes.
Minor repairs, like changing a lightbulb.
Under which conditions can a landlord kick you out of the apartment and take it back?
To live there himself,
To have a direct relative live there,
To have an indirect relative live there, if the landlord is the main material for moral support, whatever the fuck that means,
To have live there a former spouse if the landlord is the main material for moral support, again, WTF.
Exclusions all have to do with being 70 years old or older.
What is an assignment of a lease?
Can the landlord refuse?
When you find a new tenant for your landlord, so that he/she can take over your lease. In this case, you are no longer the tenant and are no longer responsible for the lease.
The landlord can refuse, unless:
- you get allocated to low-rental housing,
- you are unable to live there b/c of handicap
- spousal violence or sexual agression
- you are admitted to a permanent senior’s residence.
What is the security deposit for renting a car?
What is the maximum security deposit that can be offered by a dealership? Why might someone take that?
Usually one month’s car payment, you will get it back at the end, but it must be budgeted.
10 times the monthly payment.
May give access to smaller interest rates, and can be used to buy the car when the lease is over.
Why is giving a down payment on a rental car a bad idea?
In case of an accident, the down payment is not covered by warranty, the dealer will be reimbursed to make up for their loss, but the person renting will not get back his/her down payment.
What fees can a rental company charge at the end of a car lease?
Kilometer fee (if you go over)
Tires (if in the contract you needed to give back the car with the same tires as were on when you got it (4 season tiers))
Repairs for non-normal usage (not scratches, but torn bench ex.)
What is the penalty when cancelling a rental car contract?
The difference between the value of the car and the amount left to pay. (Often the car depreciates faster than you pay it, so the car may not be worth as much as what you owe, hence a big penalty).
This is why people try to transfer leases.
What is the all-inclusive price?
The maximum price that the dealer can charge you for the advertised car.
This price includes transportation, preparation, and delivery fees, fees for air-conditioning tax, administrative fees.
The sales tax, fees for new tires, and credit fees are not included. This is the price if you pay it cash.
What must a dealership mention when selling a car by installments?
The price of the car,
Any down-payment required,
Credit fees,
Credit rate (if mentionned),
Number of installments and length of payment period,
Amount of each installment,
Total amount (including credit fees).
If you signed a financing contract, how long do you have to cancel the contract?
For a new car financed at the dealership, you have 2 days, as long as you didn’t take possession of the car yet.
For a used car, you have two days to return it.
For a car paid cash, or with a personal loan (ex. bank), you cannot return it.
You can always look for the return penalty on the contract.
What can happen if you default on the payments
The dealer can charge you late fees,
He can take the car back,
He can require that you pay the total amount left immediately. (if mentionned on contract)
If you have an active contract and you are paying for a car, can you resell it?
Not without the dealership’s permission.
Does a car purchased from a dealer come with a legal warranty?
What about a car purchased from an individual?
Yes.
No.
What is chapter A of auto insurance? What does it cover?
Chapter A is the mandatory part of auto insurance, it covers for bodily damage or property damage caused by the insured.
What are chapters B2, B3 and B4?
B2 is collision insurance, covers for damages to your car. B3 and B4 cover everything else, like fire, theft, vendalism etc.
What is the Facility Association?
It allows high risk drivers who are refused insurance to get ensured.
What is no fault and pure no fault insurance?
What provincese have pure no fault?
No fault allows the insured to receive immediate medical payments through their own insurance policy, regardless of who is at fault for the accident.
Pure no fault prevents people from sueing you for pain and suffering and economic loss.
This is in place in QC, Sask, Man.
What is the minimum you need to ensure for third party liability in most provinces? Which provinces are different and what is their minimums?
In most provinces: 200k$
QC: 50k$
Nova Scotia: 500k$
What can happen if you lie to your insurer?
They will cancel your insurance, you won’t get anything.
What is the difference between replacement-cost policy and cash value policy?
Replacement cost allows you to buy another thing new, pays more than cash value, which would pay you the amount after depreciation.
What liabilities might be covered by your home insurance?
Any event that could cause you to be sued, can occur on your property or not, covers medical payments.
Can be:
- your dog bites someone
- you injuried someone while skiing
- your water flooded the apartment beneath yours
- you broke a neighor’s window while playing hockey.
What is tenant’s insurance?
It does not cover the building, as you don’t own it, but covers any liabilities in a similar way to homeowner’s insurance.
