Question 1

Which of the following is True about the Home Buyers' Plan?

Accepted Answer

A) It's a government program which enables first time home owners with less than five percent down payment to purchase a home using CMHC insurance. 
B) It's a government program exempting Canadian first time home buyers in certain provinces from land transfer tax. 
C) It's a government program allowing first time home buyers to withdraw $20 000 from their RRSPs tax free as long as paid back within ten years. 
D) It's a government program allowing first time home buyers to withdraw $25 000 from their RRSPs tax free as long as paid back within fifteen years. 
A) It's a government program which enables first time home owners with less than five percent down payment to purchase a home using CMHC insurance. 
B) It's a government program exempting Canadian first time home buyers in certain provinces from land transfer tax. 
C) It's a government program allowing first time home buyers to withdraw $20 000 from their RRSPs tax free as long as paid back within ten years. 
D) It's a government program allowing first time home buyers to withdraw $25 000 from their RRSPs tax free as long as paid back within fifteen years.

Question 2

Which of the following payment options would result in the lowest amount of interest paid on a mortgage?

Accepted Answer

A) Accelerated biweekly 
B) Biweekly 
C) Weekly 
D) Semi-monthly 
A) Accelerated biweekly 
B) Biweekly 
C) Weekly 
D) Semi-monthly

Question 3

Sharaz has gross household income of $3800 and wants to qualify for total monthly mortgage financing of $1330.Based on the gross debt service ratio,she should be approved.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following would be the best advice in a decision to buy or rent a house?

Accepted Answer

A) You should objectively perform the financial assessment. 
B) If mortgage payments are more than renting,then you should rent. 
C) Buying is always better because of the equity you get in the long term. 
D) If interest costs are less than renting,then you should buy. 
A) You should objectively perform the financial assessment. 
B) If mortgage payments are more than renting,then you should rent. 
C) Buying is always better because of the equity you get in the long term. 
D) If interest costs are less than renting,then you should buy.

Question 5

Which of the following is True regarding conventional mortgages?

Accepted Answer

A) They require a down payment of at least twenty-five percent. 
B) They require a down payment of at least twenty percent. 
C) They receive more favourable interest rates for the buyer. 
D) They are a form of closed mortgage. 
A) They require a down payment of at least twenty-five percent. 
B) They require a down payment of at least twenty percent. 
C) They receive more favourable interest rates for the buyer. 
D) They are a form of closed mortgage.

Question 6

An amortization schedule shows all except the

Accepted Answer

A) principal portion of the payment. 
B) interest portion of the payment. 
C) increase in equity. 
D) beginning and ending balances. 
A) principal portion of the payment. 
B) interest portion of the payment. 
C) increase in equity. 
D) beginning and ending balances.

Question 7

Why is a conventional mortgage a good idea for a buyer?

Accepted Answer

A) You will not need to purchase CMHC insurance. 
B) You will not need to purchase life insurance. 
C) You will get a better interest rate. 
D) You will not need to purchase life insurance or CMHC insurance. 
A) You will not need to purchase CMHC insurance. 
B) You will not need to purchase life insurance. 
C) You will get a better interest rate. 
D) You will not need to purchase life insurance or CMHC insurance.

Question 8

A house is sold for $300 000 and appraised for $285 000.What down payment will be needed to qualify for a conventional mortgage?

Accepted Answer

A) $60 000 
B) $57 000 
C) $71 250 
D) $72 000 
A) $60 000 
B) $57 000 
C) $71 250 
D) $72 000

Question 9

The total household income available is $3963.Mortgage payments including taxes,principal,and interest are $1189.In addition,there are condo fees of $126 and heating costs of $56 monthly and a car lease of $241.What is the gross debt service ratio?

Accepted Answer

A) 40.7 percent 
B) 33.0 percent 
C) 39.1 percent 
D) 34.6 percent 
A) 40.7 percent 
B) 33.0 percent 
C) 39.1 percent 
D) 34.6 percent

Question 10

A house for sale is listed at $310 000 and you manage to win the competitive bid with an offer of $312 000.The appraisal indicates the value at $295 000.What will be the conventional mortgage loan amount approved by the bank?

Accepted Answer

A) $248 000 
B) $221 250 
C) $249 600 
D) $236 000 
A) $248 000 
B) $221 250 
C) $249 600 
D) $236 000

Question 11

What is the best advice regarding mortgage financing?

Accepted Answer

A) Get a pre-approval certificate to guarantee your mortgage approval. 
B) Let an expert choose the type and length of mortgage you will need. 
C) Ensure the mortgage payments do not absorb all your excess income. 
D) Select the maximum payments you can afford based on your cash flow. 
A) Get a pre-approval certificate to guarantee your mortgage approval. 
B) Let an expert choose the type and length of mortgage you will need. 
C) Ensure the mortgage payments do not absorb all your excess income. 
D) Select the maximum payments you can afford based on your cash flow.

Question 12

What is the most significant cause for concern in selecting a variable-rate mortgage?

Accepted Answer

A) Interest rate increases 
B) Lack of convertibility 
C) The locked in term 
D) Lack of security 
A) Interest rate increases 
B) Lack of convertibility 
C) The locked in term 
D) Lack of security

Question 13

Jane's monthly gross income is $4000 and her debt payments are $400 per month.Given GDS of 30 percent and TDS of 40 percent,she will be able to qualify for mortgage-related debt payments of $1200 per month.

Accepted Answer

A) True 
 B)False

Question 14

Gross debt service ratio refers to a calculation of all mortgage-related financing and must not exceed 32 percent of total household income.

Accepted Answer

A) True 
 B)False

Question 15

The total household income available is $4032.Mortgage payments including taxes,principal,and interest are $1174.In addition,there are condo fees of $150,heating costs of $65 monthly,a student loan payment of $100 and a car lease of $141.What is the total debt service ratio?

Accepted Answer

A) 38.6 percent 
B) 35.1 percent 
C) 36.1 percent 
D) 40.4 percent 
A) 38.6 percent 
B) 35.1 percent 
C) 36.1 percent 
D) 40.4 percent

Question 16

Which of the following costs associated with home ownership is hardest to budget for?

Accepted Answer

A) Insurance 
B) Taxes 
C) Repairs 
D) Mortgage payments 
A) Insurance 
B) Taxes 
C) Repairs 
D) Mortgage payments

Question 17

Ianna has found a fixed rate mortgage for $300 000 at four percent interest amortized over 30 years.Her payment will be $1426 per month.How much would her payment be if she wanted to amortize the mortgage over 15 years?

Accepted Answer

A) $2219. 
B) $1733. 
C) $2214. 
D) $1711. 
A) $2219. 
B) $1733. 
C) $2214. 
D) $1711.

Question 18

In addition to closing costs,realtor fees of three to seven percent are charged when you buy a home.

Accepted Answer

A) True 
 B)False

Question 19

The lawyer normally will look after services for you when purchasing a home except for the

Accepted Answer

A) legal fees and disbursements. 
B) home inspection fee. 
C) interest adjustment. 
D) title insurance. 
A) legal fees and disbursements. 
B) home inspection fee. 
C) interest adjustment. 
D) title insurance.

Question 20

Illustrate how GDS and TDS ratios as well as cash flow are important in calculating what size mortgage a person can afford.Use the following example to illustrate your conclusion.
Hannah earns an annual salary of $72 000 and has following monthly expenses.
   
Hannah has $31 000 saved in her RRSP.There is a new condo development going up in her area and she hopes to be able to purchase her own place.The unit she has her heart set on costs $310 000 and they advertise a mortgage rate of 3.5%,compounded semi-annually,for this development.The property taxes will be $170 per month,heating costs $80,and condo fees $300.

Accepted Answer

Many options are possible,but look for t

Which of the following is True about the Home Buyers' Plan?

Which of the following payment options would result in the lowest amount of interest paid on a mortgage?

Sharaz has gross household income of $3800 and wants to qualify for total monthly mortgage financing of $1330.Based on the gross debt service ratio,she should be approved.

Which of the following would be the best advice in a decision to buy or rent a house?

Which of the following is True regarding conventional mortgages?

An amortization schedule shows all except the

Why is a conventional mortgage a good idea for a buyer?

A house is sold for $300 000 and appraised for $285 000.What down payment will be needed to qualify for a conventional mortgage?

The total household income available is $3963.Mortgage payments including taxes,principal,and interest are $1189.In addition,there are condo fees of $126 and heating costs of $56 monthly and a car lease of $241.What is the gross debt service ratio?

A house for sale is listed at $310 000 and you manage to win the competitive bid with an offer of $312 000.The appraisal indicates the value at $295 000.What will be the conventional mortgage loan amount approved by the bank?

What is the best advice regarding mortgage financing?

What is the most significant cause for concern in selecting a variable-rate mortgage?

Jane's monthly gross income is $4000 and her debt payments are $400 per month.Given GDS of 30 percent and TDS of 40 percent,she will be able to qualify for mortgage-related debt payments of $1200 per month.

Gross debt service ratio refers to a calculation of all mortgage-related financing and must not exceed 32 percent of total household income.

The total household income available is $4032.Mortgage payments including taxes,principal,and interest are $1174.In addition,there are condo fees of $150,heating costs of $65 monthly,a student loan payment of $100 and a car lease of $141.What is the total debt service ratio?

Which of the following costs associated with home ownership is hardest to budget for?

Ianna has found a fixed rate mortgage for $300 000 at four percent interest amortized over 30 years.Her payment will be $1426 per month.How much would her payment be if she wanted to amortize the mortgage over 15 years?

In addition to closing costs,realtor fees of three to seven percent are charged when you buy a home.

The lawyer normally will look after services for you when purchasing a home except for the

Overview of a Financial Plan

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning with Personal Financial Statements

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Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing, Managing, and Securing Your Credit

Protecting Your Wealth - Auto and Homeowner's Insurance

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Personal Investing - Investing Fundamentals

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Exam 7: Managing Your Financial Resources - Purchasing and Financing a Home

Which of the following is True about the Home Buyers' Plan?

Which of the following payment options would result in the lowest amount of interest paid on a mortgage?

Sharaz has gross household income of $3800 and wants to qualify for total monthly mortgage financing of $1330.Based on the gross debt service ratio,she should be approved.

Which of the following would be the best advice in a decision to buy or rent a house?

Which of the following is True regarding conventional mortgages?

An amortization schedule shows all except the

Why is a conventional mortgage a good idea for a buyer?

A house is sold for $300 000 and appraised for $285 000.What down payment will be needed to qualify for a conventional mortgage?

The total household income available is $3963.Mortgage payments including taxes,principal,and interest are $1189.In addition,there are condo fees of $126 and heating costs of $56 monthly and a car lease of $241.What is the gross debt service ratio?

A house for sale is listed at $310 000 and you manage to win the competitive bid with an offer of $312 000.The appraisal indicates the value at $295 000.What will be the conventional mortgage loan amount approved by the bank?

What is the best advice regarding mortgage financing?

What is the most significant cause for concern in selecting a variable-rate mortgage?

Jane's monthly gross income is $4000 and her debt payments are $400 per month.Given GDS of 30 percent and TDS of 40 percent,she will be able to qualify for mortgage-related debt payments of $1200 per month.

Gross debt service ratio refers to a calculation of all mortgage-related financing and must not exceed 32 percent of total household income.

The total household income available is $4032.Mortgage payments including taxes,principal,and interest are $1174.In addition,there are condo fees of $150,heating costs of $65 monthly,a student loan payment of $100 and a car lease of $141.What is the total debt service ratio?

Which of the following costs associated with home ownership is hardest to budget for?

Ianna has found a fixed rate mortgage for $300 000 at four percent interest amortized over 30 years.Her payment will be $1426 per month.How much would her payment be if she wanted to amortize the mortgage over 15 years?

In addition to closing costs,realtor fees of three to seven percent are charged when you buy a home.

The lawyer normally will look after services for you when purchasing a home except for the

Overview of a Financial Plan

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning with Personal Financial Statements

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing, Managing, and Securing Your Credit

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

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