Ontario Mortgage Agent Practice Exam 2025 - Free Mortgage Agent Practice Questions and Study Guide

The choice highlighting insufficient creditworthiness, a high debt-to-income ratio, and inadequate documentation is a common reason for mortgage application denial because lenders assess these factors to determine the borrower’s ability to repay the loan.

Insufficient creditworthiness indicates that the applicant may have a history of missed payments or defaults, which raises red flags for lenders about the risk associated with lending to that individual. A high debt-to-income ratio suggests that the applicant may already be stretched thin financially, with too much of their income going toward existing debts, making it risky for lenders to extend additional credit. Inadequate documentation can also lead to denial, as lenders require specific paperwork to verify income, employment, and other financial factors. Without sufficient documentation, lenders cannot properly assess the applicant’s financial stability or eligibility for a mortgage, leading to a denial.

This choice encompasses multiple critical reasons that lenders need to evaluate an applicant's financial health comprehensively, thus making it the most likely scenario for application denial.