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Questions and Answers
What percentage of funds is released after the plumbing, electrical, heating, and drywall are completed?
What percentage of funds is released after the plumbing, electrical, heating, and drywall are completed?
How much can first-time homebuyers withdraw from their RRSPs without tax implications under the Home Buyer’s Program?
How much can first-time homebuyers withdraw from their RRSPs without tax implications under the Home Buyer’s Program?
Which government program offers a non-refundable tax credit based on a $5,000 amount?
Which government program offers a non-refundable tax credit based on a $5,000 amount?
What is the final percentage released when the building is fully complete?
What is the final percentage released when the building is fully complete?
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What is the maximum amount a couple can withdraw from their RRSPs under the Home Buyer’s Program?
What is the maximum amount a couple can withdraw from their RRSPs under the Home Buyer’s Program?
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What is the most common amortization period for a mortgage?
What is the most common amortization period for a mortgage?
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Who can receive a rebate of the GST/HST paid on their new house purchase?
Who can receive a rebate of the GST/HST paid on their new house purchase?
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Which program allows homeowners to receive $5,600 for energy-efficient retrofits?
Which program allows homeowners to receive $5,600 for energy-efficient retrofits?
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What does the term 'term' in a mortgage refer to?
What does the term 'term' in a mortgage refer to?
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What does the Land Transfer Tax Refund provide to eligible first-time homebuyers in Ontario?
What does the Land Transfer Tax Refund provide to eligible first-time homebuyers in Ontario?
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Which type of payment combines both principal and interest in a mortgage?
Which type of payment combines both principal and interest in a mortgage?
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What is a key advantage of a fixed-rate mortgage?
What is a key advantage of a fixed-rate mortgage?
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One disadvantage of a variable rate mortgage is:
One disadvantage of a variable rate mortgage is:
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What distinguishes the 'partially amortized, blended variable payment mortgage - fixed rate'?
What distinguishes the 'partially amortized, blended variable payment mortgage - fixed rate'?
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What is a potential pro of a variable rate mortgage compared to a fixed rate mortgage?
What is a potential pro of a variable rate mortgage compared to a fixed rate mortgage?
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What could be a result of payment fluctuation in a blended variable payment mortgage?
What could be a result of payment fluctuation in a blended variable payment mortgage?
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What happens to the owner's right to occupy a unit once the ground lease expires?
What happens to the owner's right to occupy a unit once the ground lease expires?
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What is the primary purpose of registering a condo?
What is the primary purpose of registering a condo?
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Which statement accurately describes an easement?
Which statement accurately describes an easement?
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What defines a restrictive covenant?
What defines a restrictive covenant?
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Which of the following is true about joint tenancy?
Which of the following is true about joint tenancy?
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How long does the process of registering a condo typically take?
How long does the process of registering a condo typically take?
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In the context of property surveys, what is a Real Property Report?
In the context of property surveys, what is a Real Property Report?
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What distinguishes a mortgage broker from a mortgage agent in Ontario?
What distinguishes a mortgage broker from a mortgage agent in Ontario?
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What characterizes tenancy in common?
What characterizes tenancy in common?
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Which of the following is a responsibility of the principal broker at a mortgage brokerage?
Which of the following is a responsibility of the principal broker at a mortgage brokerage?
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Which of the following licenses is required for someone to act as a mortgage agent in Ontario?
Which of the following licenses is required for someone to act as a mortgage agent in Ontario?
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What is one of the typical activities performed by a mortgage agent?
What is one of the typical activities performed by a mortgage agent?
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Who is responsible for the conduct of the mortgage brokerage and its agents?
Who is responsible for the conduct of the mortgage brokerage and its agents?
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What does 'effective supervision' by a principal broker include?
What does 'effective supervision' by a principal broker include?
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What is the primary role of a mortgage agent when working with borrowers?
What is the primary role of a mortgage agent when working with borrowers?
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Which of the following statements about mortgage agents and brokers in Ontario is true?
Which of the following statements about mortgage agents and brokers in Ontario is true?
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What activity is explicitly prohibited under the MBLAA?
What activity is explicitly prohibited under the MBLAA?
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What is the maximum administrative penalty for a broker or agent?
What is the maximum administrative penalty for a broker or agent?
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What consequence can a corporation face under MBLAA for certain offenses?
What consequence can a corporation face under MBLAA for certain offenses?
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Which of the following is NOT a criterion mentioned in the MBRCC Code of Conduct?
Which of the following is NOT a criterion mentioned in the MBRCC Code of Conduct?
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What must happen if a licensee wishes to appeal an administrative penalty decision?
What must happen if a licensee wishes to appeal an administrative penalty decision?
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What is the time frame to pay an administrative penalty after being assessed?
What is the time frame to pay an administrative penalty after being assessed?
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Under the MBLAA, what does obstructing FSRA from performing its duties entail?
Under the MBLAA, what does obstructing FSRA from performing its duties entail?
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What action constitutes an adverse employment action under the MBLAA?
What action constitutes an adverse employment action under the MBLAA?
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What is one of the eligibility criteria for claiming a refund?
What is one of the eligibility criteria for claiming a refund?
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Which of the following types of properties are eligible for the first-time home purchase rebate?
Which of the following types of properties are eligible for the first-time home purchase rebate?
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What is the amount of the Municipal Land Transfer Tax (MLTT) rebate?
What is the amount of the Municipal Land Transfer Tax (MLTT) rebate?
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What does the term 'amortization' refer to in a mortgage context?
What does the term 'amortization' refer to in a mortgage context?
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Which of the following best describes 'Face Value' in a mortgage?
Which of the following best describes 'Face Value' in a mortgage?
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What does 'buying down an interest rate' involve?
What does 'buying down an interest rate' involve?
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Which statement about compounding frequency in mortgages is correct?
Which statement about compounding frequency in mortgages is correct?
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What document contains the standard charge terms for borrowing against real property?
What document contains the standard charge terms for borrowing against real property?
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Study Notes
Mortgage Broker/Agent Overview
- Two licenses exist for mortgages in Ontario: agent and broker.
- FSRA (Financial Services Regulatory Authority Ontario) is the governing body, replacing FSCO (Financial Services Commission of Ontario) as of June 8, 2019.
- A mortgage agent works under supervision of a licensed broker, dealing in mortgages for a brokerage.
- A mortgage broker is responsible for mortgages and managing agents for a licensed brokerage.
Roles and responsibilities
- Brokers can supervise agents and act as the principal broker for the brokerage.
- A principal broker is accountable for the conduct of the brokerage, its agents, and brokers.
- Effective supervision involves meeting regulatory requirements and addressing any violations.
- Agents assess borrower goals, finding appropriate financing solutions.
- Typical agent duties include brokering new or existing mortgages/loans, refinancing and providing advice on mortgages.
- Specialized brokering includes private mortgages, involving private investors and other investment entities (like MICs).
Benefits of using agents
- Access to various lenders (banks, credit unions, monoline lenders, MICs, private lenders).
- Expert advice and competitive rates.
- Problem-solving regarding loan options.
- Lender pays the agent for the deal, meaning the client receives free advice.
Industry Regulation
- FSRA is a self-funded Crown corporation accountable to the Ontario Legislature.
- A review of the Mortgage Brokers Act was conducted in 2004, to improve customer protection and encourage industry growth.
Key participants
- Mortgage Brokerage: The licensed company entity that brokers mortgages.
- Principal Broker: The designated officer responsible for compliance and supervision within the brokerage.
- Institutional Lender: Chartered banks, credit unions, loan companies, etc.
- Private Lender: An individual or entity providing investment for mortgages..
- Borrower: The individual seeking the mortgage (the mortgagor).
- Lender: The entity providing the mortgage (the mortgagee).
Mortgage Types and Purposes
- Collateral Mortgages: Used for secure lines of credit, re-advancing funds, increasing loan amounts.
- Commercial Mortgages: For industrial, commercial, or investment properties.
- Purchase Mortgages: Obtaining mortgages for the acquisition of property.
- Refinance Mortgages: Changing or modifying existing mortgages to better terms.
- Equity Take Outs (ETO): Borrowing against equity in the property for other expenses.
- Bridge Financing: Temporary financing utilized during the transition between selling one property and purchasing another.
- Construction Mortgages (Builder's Mortgages): Draw-based loans released during the development stages of a new home.
Mortgage Concepts
- Mortgage A charge on property securing money or value.
- Collateral Mortgage: Secured by property with potential for increased/revolving amounts.
- Pre-approval: Initial credit check, outlining loan eligibility.
- Pre-qualification: Assessment of eligibility based on income/interest rates, no guarantee of approval.
- Amortization: The period for paying back a loan by making regular payments of principal and interest.
- Face Value: The total loan amount owed by the borrower.
- Interest rates: Varying rates or fixed rates.
- Compound Frequency: Regular increments of accrued interest for mortgages (e.g. Annual, semi-annual).
###Mortgage Repayment Options and Plans
- Fully Open Mortgages: Can be repaid anytime without penalty.
- Partially Open Mortgages: Has a penalty for early repayment.
- Closed Mortgages: No option to prepay before the agreed term ends.
- Periodic Increase Payments: Allowing a larger payment.
- Lump Sum Payments: To directly reduce the principal by a lump sum payment.
- Interest-Only Payments: Payments made towards only the interest.
- Other mortgage types: such as a variable payment mortgage (payment changes with interest), an accelerated mortgage repayment (a rate is set on payment amounts), and a cash back mortgage (the borrower receives funds at closing).
###Property Ownership Types
- Fee Simple Estate: The widest-ranging ownership with inheritance rights.
- Leasehold Estate: Limited ownership period, often with a lease agreement.
- Life Estate: Ownership rights for the duration of the owner's life.
- Condominium: Ownership of a unit with shared ownership of common areas.
- Co-operative: Ownership in a corporation with a lease interest, not ownership of the complete building, like a freehold condominium.
Other important aspects
- Land Surveyor: A licensed surveyor to create maps of land.
- Lawyer: For legal documentation and negotiations.
- Mortgage Default Insurer: Protects the lender against default or loss (e.g., CMHC, private insurers).
- Mortgage Administrators: Process mortgage payments.
- Judgements, Writs, Liens, and Claims: Court orders or claims related to repayment or ownership issues.
- Licensing and Regulatory Bodies (FSRA): Governing the mortgage industry including the required permissions for brokers, agents and administrators.
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Description
This quiz covers the roles and responsibilities of mortgage brokers and agents in Ontario. You'll learn about the regulatory framework, including the functions of the Financial Services Regulatory Authority and the differences between agents and brokers. Test your knowledge on supervising agents and providing effective mortgage solutions.
