Mortgage 101

As part of the exchange a mortgage contract involves, which right are lenders given on the real estate property?

• Right to ownership

• Right to lend

• Right to sell

• Right to default

Answer explanation

Lenders are given the right to ownership on a real estate property. Such right can be exercised only in case the borrower fails to repay his debt.

What is the role of a mortgage broker?

• Provide advisory services to borrowers
• Distribute financial products
• Suggest the product that would pay the highest commission
• Facilitate the borrower's interaction with different stakeholders

Answer explanation

In the EU, brokers are prohibited by law to maximise their profit in spite of the borrower's benefit.

Hence, they always have to favour the borrower's interest.

A mortgage is

• A financial contract
• A financing operation

• An asset
• A financial product

Answer explanation

Rewatch session Mortgage 101 😉

What is the role of insurers in the mortgage ecosystem?

• To facilitate the interaction between borrowers and lenders
• To take the risk of default on the mortgage away from borrowers and lenders

• To make sure borrowers pay back their mortgage
• To provide guarantees about the creditworthiness of the borrower

Answer explanation

Insurers, behind the payment of a premium, carry the risk of default on the mortgage. Hence, if for some reason (unemployment, death, etc) the borrower cannot repay his debit, the insurer will take over the mortgage and pay back the lender.

In the context of mortgages, notaries are needed to ______ the mortgage contract through a public act

Answer explanation

Notaries are public official. Their role is to guarantee no illicit actions

Hence, their role is to "validate" the correctness of the contract.