Alberta Mortgage Associate cheat sheet

Brokerage licensing: a mortgage brokerage must hold a licence under Alberta's Mortgage Brokerage Act; individual mortgage brokers and associate brokers are licensed through that brokerage and may not deal or trade in mortgages independently.

Disclosure timing: the mortgage broker must disclose in writing, at the earliest practicable opportunity and before any fees are collected, the nature of the relationship with the lender and any potential conflict of interest.

Fee disclosure rule: all brokerage fees, lender fees, and third-party charges must be disclosed in writing before the borrower commits; undisclosed compensation is a breach of practice standards.

Suitability rule: recommended product must match documented borrower objectives, financial capacity, and risk tolerance; the file must show the rationale for the recommendation.

Documentation standard: every file should contain the application, income and down payment verification, credit authorization, disclosure forms, lender commitment, and signed client consent records.

Conflict of interest: if the brokerage receives compensation from a lender or a third party, that must be disclosed to the borrower; undisclosed third-party incentives are prohibited.

Record retention: brokerage records of dealings must be kept for the period set by the regulator and produced on request during an audit or investigation.

Mortgage broker vs. associate broker: the associate broker supervises broker conduct and file quality; the brokerage's designated broker is responsible for overall compliance with the Act and regulations.

GDS ratio formula: (principal + interest + property taxes + heating) / gross annual income; conventional guideline is 32% or less, with lender variation.

TDS ratio formula: (housing costs + all other debt payments) / gross annual income; conventional guideline is 40% or less, with lender variation.

High-ratio mortgage: loan-to-value above 80% requires default insurance; the insurance premium is typically added to the mortgage balance and increases the effective loan amount.

Maximum amortization for insured mortgages is 25 years; uninsured mortgages can have longer amortizations subject to lender policy.

Stress test: for insured mortgages the qualifying rate is the greater of the contract rate plus 2 percentage points or the posted benchmark rate; uninsured mortgages are qualified at the greater of the contract rate plus 2 points or the benchmark.

Fixed vs. variable: fixed rate locks the payment and amortization schedule; variable rate fluctuates with the lender's prime or reference rate and changes payment or amortization.

Term vs. amortization: the term is the length of the current contract (commonly 1 to 5 years); amortization is the full repayment period (commonly 25 to 30 years).

Prepayment privileges: many closed mortgages allow a percentage of the original principal annually plus an increase in payment; exceeding the privilege triggers an interest rate differential or three-month interest penalty.

Refinance and equity take-out: maximum loan-to-value is generally 80% for a refinance of an owner-occupied property, with lender-specific limits for rentals and secondary suites.

Governing statute: the Mortgage Brokerage Act and its regulations set licensing, conduct, disclosure, and record-keeping requirements for Alberta mortgage brokerages, brokers, and associate brokers.

Regulator: the Alberta Superintendent of Real Estate and the Real Estate Council of Alberta administer licensing, complaints, and discipline for the mortgage brokerage industry.

Licensing requirement: a person must not deal in mortgages or hold themselves out as a mortgage broker without a valid licence; licence renewal and continuing education are conditions of ongoing registration.

Trust accounts: money held on behalf of clients, such as deposits or fees held pending completion, must be held in a designated trust account and accounted for separately from brokerage operating funds.

Privacy: personal information collected for a mortgage application is governed by Alberta's Personal Information Protection Act, which requires consent, limited collection, and safeguards.

Anti-money-laundering: brokerages are subject to federal proceeds-of-crime and terrorist-financing rules, including client identification, record-keeping, and suspicious transaction reporting.

Advertising rule: advertising must not be false or misleading; rates and terms must be current and include required disclaimers, and the licensed brokerage name must be identified.

Discipline: the regulator can impose conditions, suspend or cancel a licence, and levy penalties for misconduct; brokers have a duty to cooperate with investigations.

Fiduciary duty: the broker must act in the client's best interest, disclose conflicts, and place the client's interest above the broker's compensation.

Confidentiality: client financial and personal information may not be disclosed to third parties without consent, except as required by law or by the regulator.

Honesty rule: brokers must not make false or misleading statements about rates, terms, approval odds, or their own qualifications.

Competence rule: a broker must decline or refer a matter that is outside their knowledge or licence scope rather than proceed without adequate expertise.

Dual agency: representing both borrower and lender in the same transaction requires full written disclosure and informed consent; the broker must not favour one party's interest.

Referral fees: any referral arrangement involving a fee or benefit must be disclosed to the client in writing before the client acts on the referral.

Discrimination: refusing service or varying terms based on protected grounds such as race, gender, family status, or disability is prohibited.

Advertising and solicitation: brokers must not solicit clients through high-pressure or deceptive tactics, and must not contact persons who have asked not to be contacted.