Question

If Amir obtained a $250,000 1st mortgage using a mortgage broker, and paid $500 as a brokerage fee to obtain it, the $250,000 amount would be registered on title and would represent:

Answer 1

Amir's $250,000 registered on title is the principal amount of the mortgage loan he secured for buying a home. This does not include the $500 brokerage fee. The registered amount represents the lender's financial interest in the property, secured by the home as collateral.

Step-by-step explanation:

If Amir obtained a $250,000 1st mortgage using a mortgage broker, and paid $500 as a brokerage fee to obtain it, the $250,000 amount would be registered on title and would represent the principal amount of the loan that is secured by a lien on the property. This <$strong>mortgage$> is a line of credit Amir can use for purchasing the home, and the amount registered reflects the total loan amount rather than the home's value or the costs associated with obtaining the mortgage, such as the brokerage fee. The home itself serves as collateral to secure the loan, ensuring the lender can reclaim the property if Amir fails to make the agreed-upon mortgage payments.

For further illustration, consider related scenarios: Freda bought a house in cash and now possesses full equity of $250,000, while Ben contributed a 20% down payment and obtained a mortgage for the remainder when he bought his house. As Ben pays off the loan, his equity in the property increases.