CeMAP 3 Misc. Flashcards

1
Q

mortgage adviser has recommended a variable-rate repayment mortgage with a 1.5% discount for the first two years. The bank uses a mortgage interest rate of 5% to calculate affordability, which works out at £5.85 per month per £1,000 borrowed

WHICH OF THE FOLLOWING IS TRUE IN RELATION TO THE MORTGAGE PRODUCT RECOMMENDED BY NORMAN’S ADVISER?

Early repayment charges do not usually apply to this sort of arrangement.

It will provide Norman with security against interest rate rises.

The lender may include a minimum interest rate in the terms and conditions of the mortgage.

There is no arrangement fee charged for this sort of arrangement.

A

The lender may include a minimum interest rate in the terms and conditions of the mortgage.

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2
Q

WHICH OF THE FOLLOWING WOULD APPLY TO SALE OF ANY PROTECTION PRODUCTS NORMAN WAS ADVISED TO TAKE OUT BY THE BANK’S ADVISER?

A 28 day cancellation period.

MCOB rules would apply to the sale.

The adviser must give Norman a statement of demand and needs.

The adviser must give Norman a suitability report.

A

The correct answer is: The adviser must give Norman a statement of demand and needs.

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3
Q

IF NATHAN AND LOUISE PROCEED WITH THEIR MORTGAGE, ISLAND BUILDING SOCIETY WILL NEED TO KEEP DETAILS OF ANY EUROPEAN STANDARDISED INFORMATION SHEET (ESIS) IT ISSUED FOR A MINIMUM PERIOD OF:

6 months.

1 year.

3 years.

25 years.

A

1 Year

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4
Q

WHICH OF THE FOLLOWING WOULD NOT BE APPLICABLE WHEN A BRIDGING LOAN IS ARRANGED?

A mortgage exit fee.

A valuation fee.

An arrangement fee.

Stamp Duty Land Tax.

A

Stamp Duty Land Tax

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5
Q

WHEN MAKING A RECOMMENDATION, MCOB RULES REQUIRE LUKE AND JESSICA’S MORTGAGE ADVISER TO PROVIDE AN ADEQUATE EXPLANATION OF THE PRODUCT. WHICH OF THE FOLLOWING IS FALSE IN RELATION TO THAT EXPLANATION?

IT MUST:

be given in writing.

include the adviser’s remuneration.

include the effect of them defaulting on payments.

include the scope of the service offered by the adviser.
Incorrect.

The correct answer is: be given in writing.

A

be given in writing

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6
Q

IF CAROL DIED DURING THE TERM OF HER UNIT-LINKED ENDOWMENT POLICY, THE AMOUNT THAT THE POLICY WOULD PAY OUT ON HER DEATH WOULD BE:

a fixed sum of £75,000, which is the amount she borrowed initially.

an amount equivalent to the projected maturity value at the time of her death.

the amount outstanding on her mortgage at the time of her death.

the sum assured under the policy, or the value of the units, whichever is greater.

A

the sum assured under the policy, or the value of the units, whichever is greater.

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