Humber/Ontario Real Estate Course 4 Exam Practice

What role does a credit union in Ontario play in mortgage lending?

1. It can provide mortgages only to its members.

2. It can provide mortgages to anyone residing in Ontario.

3. Federal regulations prevent credit unions from issuing mortgages.

4. It primarily offers private mortgage arrangements.

5. It does not provide any mortgage-related services.

6. It regulates mortgage brokers in the province.

The correct answer is: It can provide mortgages only to its members.

A credit union in Ontario primarily functions as a member-owned financial institution, which means it can only provide mortgages to its members. This membership requirement is a foundational aspect of how credit unions operate, as they prioritize serving the financial needs of their members. Membership often requires a nominal fee or meeting certain criteria, such as living in a particular area or working for a designated employer. This structure allows credit unions to focus on personalized service and competitive mortgage products tailored to their members' needs. While credit unions can be flexible and may offer various mortgage products, the key element is that eligibility is typically limited to their members rather than the general public. This distinguishes credit unions from traditional banks, which can offer services to anyone regardless of membership. Therefore, understanding the membership model is essential when discussing the role of credit unions in mortgage lending in Ontario.