Manitoba Mortgage Salesperson Practice Exam 2025 – All-in-One Guide to Exam Success!

The aspect of the mortgage process that describes the borrower's ability to repay the mortgage is referred to as capacity. This term specifically focuses on the financial ability of the borrower to meet their mortgage payment obligations based on their income, debt levels, expenses, and other financial commitments. Lenders assess a borrower's capacity to determine if they can sustainably handle the monthly mortgage payments along with other living expenses and debts.

Evaluating capacity includes a thorough analysis of the borrower's credit history, current income sources, employment stability, and overall financial health. This assessment helps lenders mitigate the risk of default by ensuring that borrowers are not overloaded with debt relative to their income.

While capital refers to the financial resources available to the borrower, such as savings or the down payment amount, and credibility pertains to the borrower's trustworthiness or reputation, neither of these directly assesses repayment ability like capacity does. Collaboration, on the other hand, is more about the interactions and relationships between different parties during the mortgage process, rather than individual borrower attributes related to repayment.