Mortgage Agent Final Exam prep 2024/2025

Mortgage Agent Final Exam prep 2024/2025 1. Briefly describe when a Mortgage Agent would be required to obtain the following documents from an applicant. - answera) 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? - answerThis 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? - answerIt 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? - answerThis 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? - answerOn 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? - answerOn 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? - answerIn 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? - answerIn 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? - answerA tax bill is required in a switch or refinance. This is to ensure prop taxes are up to date. Define the term trade line - answerInformation 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 - answerPayment History, Amounts Owed, Length of Cred