Exam (elaborations)
FUNDAMENTALS OF MORTGAGE BROKERAGE QUESTIONS AND ANSWERS WITH SOLUTIONS
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FUNDAMENTALS OF MORTGAGE BROKERAGE QUESTIONS AND ANSWERS WITH SOLUTIONS
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FUNDAMENTALS OF MORTGAGEBROKERAGE QUESTIONS AND
ANSWERS WITH SOLUTIONS 2024-2025
AACI - ANSWER Accredited Appraiser Canadian Institute - designation granted by Appraisal Institute of
Canada
Accelerated Payments - ANSWER payment options stream whereby the monthly mortgage payment is
either split in half or in quarters and is paid every two weeks (bi-weekly) or every week (weekly)
Accredited Mortgage Professional - AMP - ANSWER national designation for mortgage professionals in
Canada issued by the Canadian Association of Accredited Mortgage Professionals
Adjustable Rate Mortgage - ARM - ANSWER mortgage where the interest rate and payments are
increased or decreased at predetermined intervals based on a rate market review conducted by the
lender. The interest rate charged on the mortgage may be linked to the lender's prime rate or a pre-
selected index rate
Adjustments - ANSWER financial calculations made regarding the costs for the respective parties
associated with a mortgage or real estate transaction at the time of closing (eg. property taxes)
Affidavit - ANSWER formal written statement of fact sworn to or affirmed by the author and witnessed as
to the authenticity of the author's signature before a person such as a notary or commissioner of oaths
who is authorized to administer an oath
Affordability - ANSWER ability of an individual to carry the cost of ownership of a property in relation to
his or her available income
Agency - ANSWER consensual relationship created by contract or law where one party, the principal,
grants authority for another party, the agent, to act on behalf of and under the control of the principal to
deal with a third party and where the agent accepts responsibility for representing the principal
Agent - ANSWER industry member who is expressly or implicitly authorized to act or represent another
person
,Agreement for Sale - ANSWER A financial arrangement between a seller and buyer in which the seller
carries the financing for the buyer's purchase of the property. However, the title remains in the name of
the seller until such time as the funds are re-paid by the buyer
Appraisal Institute of Canada - AIC - ANSWER national, member-based association that offers real estate
appraiser designations in Canada
AIDA - ANSWER Attention, Interest, Desire, Action - design of advertisements
Alberta Land Surveyor's Association - ALSA - ANSWER self-governing professional association legislated
under the Land Surveyors' Act of Alberta that regulates the practice of land surveying for the protection
of the public and the administration of the profession
Alberta Mortgage Brokers Association - ANSWER Alberta's professional association of licensed mortgage
brokers and mortgage associates
Alberta Real Estate Foundation - AREF - ANSWER organization created under Alberta's Real Estate Act to
promote the development of educational initiatives for real estate industry members and consumers,
support law reform and research in respect of the real estate industry, and other projects and activities
to advance and improve the real estate industry
Alberta Securities Commission - ASC - ANSWER regulatory agency responsible for administering the
province's securities laws and ensuring that persons who sell securities in Alberta are registered and
conduct themselves according to applicable laws and professional standards
Amortization - ANSWER gradual retirement of a debt by means of installment payments which often
includes principal and interest
Amortization Period - ANSWER length of time required to repay a mortgage by equal installments of
periodic content payments. Repayments of principal and interest in "blended" amounts. Fully amortized
means complete repayment without a balloon payment at the end of the amortization period
,Amortization Schedule - ANSWER table illustrating the amount of principal and interest that comprise
each of the periodic installments and the outstanding principal balance of the loan after each level
payment is made
Annual Percentage Rate - APR - ANSWER interest rate stated on a yearly basis that represents the cost of
a mortgage
Applicant - ANSWER all borrowers, co-borrowers and guarantors on the mortgage loan
Appraisal - ANSWER formal, impartial estimate or opinion of value, usually written, of a specific and
adequately described property, as of a specific date and supported by the presentation and analysis of
relevant data
Appraiser - ANSWER accredited professional who sets a value upon real or personal property in a
manner that is independent, impartial and objective
Arrears - ANSWER past due payments
Assignee - ANSWER person to which an assignment (transfer) of property, rights or interest is made
Assignment of Mortgage - ANSWER agreement that consists of transfer (selling) of an interest and all
rights in the mortgage contract and the security in the property to a new lender or third-party in return
for payment of money
Assignor - ANSWER person who makes a transfer under an assignment
Associate - ANSWER individual who is authorized by RECA to hold that classification of associate and to
deal in mortgages on behalf of his or her mortgage
Assumption - ANSWER act of taking possession of mortgaged property whereby the buyer accepts
liability for the debt and takes responsibility of seller's existing mortgage at the interest rate and terms as
laid out in the original mortgage documents. The seller remains liable to the mortgage lender unless the
lender agrees to release the seller
, ATB Financial - ANSWER full-service financial institution established in Alberta in 1938. Formerly the
Alberta Treasury Branch (ATB), it has been a provincial Crown corporation since 1997
Audit - ANSWER independent examination of the accounting records and other evidence relating to a
business in order to support an impartial, expert opinion regarding the fairness and reliability of financial
statements
Balance - ANSWER amount of unpaid mortgage remaining after a payment has been made
Balloon Payment - ANSWER final payment of the mortgage made on the maturity date to retire the debt
in full. Such payments are most common in commercial mortgage
Bankruptcy - ANSWER legal process involving the surrender of certain assets for disposition and the
distribution of the proceeds to creditors in exchange for financial relief or forgiveness from the debts.
This process is intended to provide a debtor with relief from his or her debts, giving them a fresh start. It
also stops creditors from taking collection or legal action against the debtor
Bankruptcy Insolvency Act - ANSWER Federal legislation that governs the process of bankruptcy and
insolvency and defines the rights and obligations of debtors and creditors. It allows fro the equitable
treatment of debtors and creditors and a fair distribution of the proceeds of the debtor's disposed assets
among the creditors
Bare Land Condominium - ANSWER unit that is a two-dimensional plot on the land. Results from the
subdivision of land before construction begins. A Real Property Report is required with a bare land
condominium
Barely Blended Condominium - ANSWER unit with boundaries that are defined by reference to walls,
floors, and ceilings (three dimensions) of a building. A barely blended condominium results from the re-
division of a bare land condominium unit into conventional condominium units. May also be referred to
as a re-divided bare land condo
Basis Point - ANSWER unit of measure equal to 1/100th of one percent that is normally used in quoting
changes in interest rates or yields in debt securities including mortgages
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