Mortgage Agent Final Exam prep 2023 Graded A+
1. Briefly describe when a Mortgage Agent would be required to obtain the
following documents from an applicant.
a) T4: typically when a Borrower has salaried or hourly employment income
b) T4A: typically when a Borrower has commission income
c) Job Letter: typically when a Borrower's income or position information is required
d) Paystub: typically in addition to a Job Letter to confirm that the individual is still
employed and that the YTD income matches the Job Letter
e) NOA: typically to support income verification for a previous year and/or to confirm
that there are no income taxes outstanding
f) Agreement of Purchase and Sale: typically when a Borrower is purchasing a property
g) Gift Letter: if the Borrower is using funds for his or her down payment that has been
given to him or her by a family member
h) Property Assessment: can be used by the Agent to support the Borrower's value of
his or her house. It is not used to confirm the value nor will the Lender accept this, but it
can support the value.
i) Property Tax Bill: used to confirm the amount of taxes payable and if any property
taxes are outstanding
j) Mortgage Statement: typically used to confirm the outstanding balance of a Borrower's
current mortgage when refinancing
k) Status Certificate: required when financing a condominium unit
Under what circumstances must a Mortgage Agent complete a Creditor Insurance
Application?
This must be completed in every transaction, since part of the application is the waiver.
If the Borrower(s) want the insurance the full application must be completed, if they do
not they must complete the waiver section.
What information must be in a Job Letter for it to be acceptable to a Lender?
It should be on company letterhead, have the company address and contact
information, list the Borrower's position, income, how it is paid (i.e. salary or hourly), the
frequency of payment (i.e. weekly), if the person is full or part-time and/or on probation,
the start date and the writer's information and contact information.
What is a Certificate of Independent Legal Advice and under what circumstances
would it be required?
This document proves that an individual has been given advice by his or her lawyer with
regards to the proposed mortgage. It is usually required when the proceeds of a
refinance are being provided to a third party and not the Borrower or if the loan is a
reverse mortgage.
On a T4A slip in Box 61 what information should appear?
On a T4A in box 61 is where the Payer's Business Number (BN) should appear. It
SHOULD remain blank and if it is not then the agent needs to verify the slip is
legitimate.
On a T4 slips in Box 54, what would be an indicator that this is a fraudulent
document?
, On a T4 slip Box 54 is where the Business Number would be. A business number
should NOT appear on the T4 copies. This could indicate it is a fraud. Agent must then
verify information.
On a T4 slip what should appear in Box 18?
In box 18 on a T4 slip should appear the employees EI premiums. These deductions
should not exceed maximum EI taxable.
EG.
2011- 786.76
2010 - 747.36
1009 - 731.79
2008 - 711.03
If amount exceeds these numbers could mean document is a fraud
On a T4 slip what should appear in box 22?
In Box 22 on a T4 slip should indicate the employees income tax deducted.
2011 fed rates:
15% for 1st 41,544
22% on next 41,544 (taxable income between 41,544 and 83,088)
26% on next 45, 712 (taxable income between83,088 & 128,800)
29% of taxable income over 128,000
Ontario rates:
5.05% on 1st 37,774 of taxable income
9.15% on next 37,776
11.16% on amount over 75,550
When is a tax bill required?
A tax bill is required in a switch or refinance. This is to ensure prop taxes are up to date.
Define the term trade line
Information on a debt, found in a credit report, that contains the date that the credit was
granted, the balance, terms and repayment history
Discuss the items that are involved in calculating a credit score
Payment History, Amounts Owed, Length of Credit History, New Credit and Inquiries,
Types of Credit, and Number of Trades on File are all used to calculate a credit score.
If an individual has a judgment filed against him or her, in what section of a credit
bureau would this information be found?
Public Records section
If an individual has an account rated as an R3 on his or her credit bureau, what
type of credit is this rating referring to and how many months in arrears is this
account?
This is a revolving account such as a credit card and it is 2 months in arrears.
What is the relationship between a credit score and the delinquency rates of
Canadians?
The lower the credit score the higher the delinquency rate.
How long does a bankruptcy remain on an individual's credit report provided by
a) Equifax? 6 years.
b) Transunion? 7 years.
1. Briefly describe when a Mortgage Agent would be required to obtain the
following documents from an applicant.
a) T4: typically when a Borrower has salaried or hourly employment income
b) T4A: typically when a Borrower has commission income
c) Job Letter: typically when a Borrower's income or position information is required
d) Paystub: typically in addition to a Job Letter to confirm that the individual is still
employed and that the YTD income matches the Job Letter
e) NOA: typically to support income verification for a previous year and/or to confirm
that there are no income taxes outstanding
f) Agreement of Purchase and Sale: typically when a Borrower is purchasing a property
g) Gift Letter: if the Borrower is using funds for his or her down payment that has been
given to him or her by a family member
h) Property Assessment: can be used by the Agent to support the Borrower's value of
his or her house. It is not used to confirm the value nor will the Lender accept this, but it
can support the value.
i) Property Tax Bill: used to confirm the amount of taxes payable and if any property
taxes are outstanding
j) Mortgage Statement: typically used to confirm the outstanding balance of a Borrower's
current mortgage when refinancing
k) Status Certificate: required when financing a condominium unit
Under what circumstances must a Mortgage Agent complete a Creditor Insurance
Application?
This must be completed in every transaction, since part of the application is the waiver.
If the Borrower(s) want the insurance the full application must be completed, if they do
not they must complete the waiver section.
What information must be in a Job Letter for it to be acceptable to a Lender?
It should be on company letterhead, have the company address and contact
information, list the Borrower's position, income, how it is paid (i.e. salary or hourly), the
frequency of payment (i.e. weekly), if the person is full or part-time and/or on probation,
the start date and the writer's information and contact information.
What is a Certificate of Independent Legal Advice and under what circumstances
would it be required?
This document proves that an individual has been given advice by his or her lawyer with
regards to the proposed mortgage. It is usually required when the proceeds of a
refinance are being provided to a third party and not the Borrower or if the loan is a
reverse mortgage.
On a T4A slip in Box 61 what information should appear?
On a T4A in box 61 is where the Payer's Business Number (BN) should appear. It
SHOULD remain blank and if it is not then the agent needs to verify the slip is
legitimate.
On a T4 slips in Box 54, what would be an indicator that this is a fraudulent
document?
, On a T4 slip Box 54 is where the Business Number would be. A business number
should NOT appear on the T4 copies. This could indicate it is a fraud. Agent must then
verify information.
On a T4 slip what should appear in Box 18?
In box 18 on a T4 slip should appear the employees EI premiums. These deductions
should not exceed maximum EI taxable.
EG.
2011- 786.76
2010 - 747.36
1009 - 731.79
2008 - 711.03
If amount exceeds these numbers could mean document is a fraud
On a T4 slip what should appear in box 22?
In Box 22 on a T4 slip should indicate the employees income tax deducted.
2011 fed rates:
15% for 1st 41,544
22% on next 41,544 (taxable income between 41,544 and 83,088)
26% on next 45, 712 (taxable income between83,088 & 128,800)
29% of taxable income over 128,000
Ontario rates:
5.05% on 1st 37,774 of taxable income
9.15% on next 37,776
11.16% on amount over 75,550
When is a tax bill required?
A tax bill is required in a switch or refinance. This is to ensure prop taxes are up to date.
Define the term trade line
Information on a debt, found in a credit report, that contains the date that the credit was
granted, the balance, terms and repayment history
Discuss the items that are involved in calculating a credit score
Payment History, Amounts Owed, Length of Credit History, New Credit and Inquiries,
Types of Credit, and Number of Trades on File are all used to calculate a credit score.
If an individual has a judgment filed against him or her, in what section of a credit
bureau would this information be found?
Public Records section
If an individual has an account rated as an R3 on his or her credit bureau, what
type of credit is this rating referring to and how many months in arrears is this
account?
This is a revolving account such as a credit card and it is 2 months in arrears.
What is the relationship between a credit score and the delinquency rates of
Canadians?
The lower the credit score the higher the delinquency rate.
How long does a bankruptcy remain on an individual's credit report provided by
a) Equifax? 6 years.
b) Transunion? 7 years.
