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RECA RESIDENTIAL EXAM UNIT 6 ACTUAL EXAM REAL 100 QUESTIONS AND DETAILED ANSWERS
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RECA RESIDENTIAL EXAM UNIT 6 ACTUAL EXAM REAL 100 QUESTIONS AND DETAILED ANSWERS
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RECA RESIDENTIAL EXAM UNIT 6 ACTUALEXAM REAL 100 QUESTIONS AND DETAILED
ANSWERS AGRADE LATEST 2024 VERIFIED.
"Equity" meaning - ANSWER >>>>The market value of the
property, less the outstanding balance of the mortgage and
any other financial obligation registered against the property
Definition of "Mortgage" - ANSWER >>>>The pledging of real
property to a loender as security for a debt. In other words, a
mortgage represents the security over property given to a
lender for repayment of a loan.
Meaning of redemption (as related to mortgages) - ANSWER
>>>>The act of performing the borrowers obligations and
consequential discharge of the mortgage on the property.
When the borrower or another on their behalf, pays off the
debt as promised, the mortgage is redeemed.
Meaning of "underwriter" as related to mortgage - ANSWER
>>>>An individual employed by a lender or insurer who is
responsible for verifying the mortgage application information
and supporting documentation, making a risk assessment of
the applicant(s) and the subject property, and approving or
declining the mortgage based on this assessment.
What is the capital market (in relation to financing)? -
ANSWER >>>>market of transferring funds from savers to
borrowers
,What is the secondary mortgage market - ANSWER >>>>the
bundling and reselling of mortgages as financial investments.
Definition of Mortgage-backed securities - ANSWER >>>>A
financial investment backed by pools of mortgages.
Historically, mortgage-backed securities have consisted of
insured residential mortgages. Investors receive monthly
payments from the cash flow generated by the underlying
mortgages.
2 ways to calculate interest (related to interest rates) -
ANSWER >>>>simple interest and compound interest
When is compound interest generally used? - ANSWER
>>>>charged on long-term loans (ie. greater than 1 year).
Simply interest is generally charged on short-term loans (ie.
less than 1 year)
What does the Interest Act of Canada do? - ANSWER >>>>a
federal legislation that imposes requirements on how interest
is described and calculated for mortgages.
Does the Interest Act of Canada impose a limit on the rate
that can be charged? - ANSWER >>>>No, it does not, but it
does stipulate that when the interest rate is not indicated in
the mortgage agreement, the applicable annual interest rate
to be charged by the lender is 5%.
True or false - The interest Act of Canada legislation prevents
a lender from charging a higher interest rate following a
default on a mortgage of real property than that charged
during the term of the mortgage. - ANSWER >>>>True
, According to the criminal code of Canada, from what
percentage is an effective annual interest rate a criminal rate
of interest? - ANSWER >>>>above 60%
Mortgage lenders can be categorized into these 4 groups -
ANSWER >>>>1. Institutional lenders 2. Canadian Mortgage
and Housing Corporation 3. Non-Institutional lenders 4.
Private lenders
Is there a difference between Institutional lenders and
conventional lenders? - ANSWER >>>>No
What are the 3 main goals of the Bank Act? - ANSWER
>>>>1. To protect depositors' funds 2. To ensure the
maintenance of cash reserves 3. To promote efficiency of the
financial system through competition
What is the Bank Act? - ANSWER >>>>Federal legislation
that regulates Canada's chartered banks
What is the difference between a loan company and a trust
company? - ANSWER >>>>A loan company cannot provide
trustee functions. By law, only trust companies are allowed to
perform these activities. Secondly, a loan company must
obtain funds through the use of debentures as opposed to
short-term certificates and saving deposits.
Definition of Debenture - ANSWER >>>>A debt obligation that
is not secured by physical assets or collateral, but secured by
the general creditworthiness and reputation of the issuer. Both
corporations and governments frequently issue this type of
investment in order to secure capital.
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