Manitoba Mortgage Salesperson Practice Exam

The mortgage default insurance premium payment is typically made at the time of closing. This is because the insurance is required to protect the lender in case of borrower default, especially in transactions where the down payment is less than 20%. Making the payment at closing ensures that the premium is part of the final loan costs and can also be included in the mortgage amount financed by the borrower. This timing aligns the payment with the transaction's completion and allows for seamless integration into the overall financing structure of the mortgage.

In terms of the other options, monthly payments and annual payments are not the standard practices for default insurance premiums, which are generally paid up front during the closing process. Payment at the time of application is also not typical since the closing is when final figures are settled and all necessary insurance requirements are reviewed and addressed.