Mortgage IQ What is your mortgage I.Q.? Mortgage I.Q. 1 2 3 4 5 6 7 8 When you're looking to buy a home and require a mortgage, it really helps to have a ... *Pre-Approval LetterPre-Qualification CertificateHigh Credit ScoreBig Down PaymentWell Done! The correct answer is: Pre-Approval Letter Having a Pre-Approval letter shows sellers and realtors that a lender has reviewed your income and credit history, determined you’re ready for a mortgage and reserved an interest rate for you. All you need to do now is find the right home.Oops, better luck next time! The correct answer is: Pre-Approval Letter Having a Pre-Approval letter shows sellers and realtors that a lender has reviewed your income and credit history, determined you’re ready for a mortgage and reserved an interest rate for you. All you need to do now is find the right home. Mortgage fees and closing costs (legal and administrative costs) are standard on all mortgage loans. *TrueFalseOops, better luck next time! The correct answer is: False Mortgage fees such as default insurance premiums and property appraisal fees vary greatly depending on what percentage of the home's value you are financing. Closing costs also vary according to the province you live in and other local taxes.Well Done! The correct answer is: False Mortgage fees such as default insurance premiums and property appraisal fees vary greatly depending on what percentage of the home's value you are financing. Closing costs also vary according to the province you live in and other local taxes. Which of the following is the lender least concerned about?*Proof of IncomeLoan to Value Ratio (LTV)Debt to income Ratio Loan PurposeCredit ScoreNumber of DependantsWell Done! The correct answer is: Number of Dependants Lenders consider all the factors from the question, but have little concern about the number of dependants applicants have when assessing their ability to pay their mortgage.Oops, better luck next time! The correct answer is: Number of Dependants Lenders consider all the factors from the question, but have little concern about the number of dependants applicants have when assessing their ability to pay their mortgage. Mortgage default insurance is*Insurance to protect you in case of default on your mortgageInsurance you buy if your down payment is less than 20%A required closing costOops, better luck next time! The correct answer is: Insurance you buy if your down payment is less than 20% This is referred to as high-ratio financing, and is required by The National Housing Act (NHA). The premiums, which vary based on the size of down payment, are added to the mortgage and financed over the life of the mortgage.Well Done! The correct answer is: Insurance you buy if your down payment is less than 20% This is referred to as high-ratio financing, and is required by The National Housing Act (NHA). The premiums, which vary based on the size of down payment, are added to the mortgage and financed over the life of the mortgage. If you choose a variable rate mortgage (VRM), your qualifying rate is*The variable rate in effect at the time of applicationThe Bank Prime RateThe Government of Canada qualifying rateWell Done! The correct answer is: The Government of Canada qualifying rate In Canada it's now required that you qualify at an interest rate higher than your actual variable rate offered to ensure you're prepared for potential rate increases. This may impact your maximum purchasing power.Oops, better luck next time! The correct answer is: The Government of Canada qualifying rate In Canada it's now required that you qualify at an interest rate higher than your actual variable rate offered to ensure you're prepared for potential rate increases. This may impact your maximum purchasing power. A Home Equity Loan and a Home Equity Line of Credit are the same thing.*TrueFalseOops, better luck next time! The correct answer: is False Home equity loans are when a lender gives you a set amount of money and you pay it back over a fixed repayment schedule. A Home Equity Line of Credit (HELOC) is the right to borrow a certain amount of money that is guaranteed by your home. To obtain a HELOC, you must have a minimum of 20% equity in your home.Well Done! The correct answer is: False Home equity loans are when a lender gives you a set amount of money and you pay it back over a fixed repayment schedule. A Home Equity Line of Credit (HELOC) is the right to borrow a certain amount of money that is guaranteed by your home. To obtain a HELOC, you must have a minimum of 20% equity in your home. Canada Mortgage and Housing Corporation (CMHC) mortgages are only given to first time buyers.*TrueFalseWell Done! The correct answer is: False CMHC mortgages otherwise are provided to any home owner that requires a mortgage amount greater than 80% of their home value. You can be a tenth-time buyer and still qualify for a high ratio mortgage provided you are comfortable with the default insurance premiums.Oops, better luck next time! The correct answer is: False CMHC mortgages otherwise are provided to any home owner that requires a mortgage amount greater than 80% of their home value. You can be a tenth-time buyer and still qualify for a high ratio mortgage provided you are comfortable with the default insurance premiums. Home buyers can access their Retirement Savings Plans (RSPs) for a down payment on a home provided*They withdraw a maximum of $25,000 per mortgage applicantThey repay the withdrawn funds over the next 15 yearsThey haven’t previously accessed RSP funds for a home purchaseAll of the aboveOops, better luck next time! The correct answer is: All of the Above With the government's Home Buyer's Plan, buyers can withdraw up to $25,000 for each mortgage applicant from their RSP without any holdback for taxes. Committing to repay the RSP funds interest free over the following 15 tax years will avoid any future taxes against the withdrawal.Well Done! The correct answer is: All of the Above With the government's Home Buyer's Plan, buyers can withdraw up to $25,000 for each mortgage applicant from their RSP without any holdback for taxes. Committing to repay the RSP funds interest free over the following 15 tax years will avoid any future taxes against the withdrawal.
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