Chapter 11: The Initial Consultation

July 17, 2023

1. What is a file worksheet?

A file worksheet is a key component used for recording notes and more importantly providing a quick summary of the file.

2. Why should you ask if a client is dealing with someone else?

To find out if the client has already applied elsewhere

3. Describe the documentation that must be obtained by a Mortgage Agent in every mortgage transaction.

Employment Verification
PIPEDA Consent
Photo Identification
Divorce/Separation Agreement (if applicable)
Child Support Order/Agreement (if applicable)

4. What documentation is typically required for a self-employed individual?

Financial Statements
Business License
Business Cheque

5. What documentation is typically required for a purchase transaction?

Purchase and Sale Agreement
MLS Listing
Proof of Downpayment
Rental Letter (if applicable)
Realtor Information.

6. What documentation is typically required for a refinance, equity take-out or switch transaction?

Current Mortgage Statement
Charge/Mortgage
Transfer/Deed
Property Tax Statement
Property Insurance Policy
Mortgage Repayment History (if applicable).

7. Discuss the importance of the file checklist.

A file checklist is a key component for ensuring that the required documentation is obtained on every transaction. This prevents the embarrassment of having to go back to a client for additional documentation in the future and provides a quick summary of what is in the file.

8. Where are the different places that a client may be met and what are the pros and cons of each?

The client’s home
The Mortgage Agent’s office
Another outside location
Pros and cons are found in chapter 11

9. Why is it important to verify an applicant’s identity?

In today’s mortgage market, identity theft and impersonation are a significant concern, making it necessary for the Mortgage Agent to verify the identity of his or her client at the initial consultation.

10. What should you do if you cannot verify a client’s identity?

As per FSRA, “Each Mortgage Brokerage has a duty to take reasonable steps to verify the identities of its clients/borrowers and other parties in mortgage transactions. If a Mortgage Brokerage is not able to identify the identity of another party, it must advise the client/borrower.

11. Discuss the difference between a co-applicant and a guarantor.

A co-applicant will go on title with the primary borrower and is equally responsible for the debt. A guarantor, while equally responsible for the debt, is not registered on title.

12. Why is it important to have the mortgage application signed by the applicant(s)?

By having the client’s signature on the application, the Mortgage Agent has consent to complete the necessary investigations to obtain a commitment from a Lender. Although verbal authorization is acceptable, some applicants may dispute providing authorization at some point in the future.

13. How can a Mortgage Agent determine the applicant’s needs?

To determine the applicant’s needs, specific questions must be asked. Refer to the Needs Assessment form.

14. If a borrower is doing a refinance, is the value of their house listed as an asset? Why or why not?

Yes, because it is owned by the borrower and is therefore an asset

15. What does “to remain?” mean?

Is the debt going to be present after the new mortgage is advanced. Typically no if the debt is being paid off from the proceeds.