Mock Answers

Question 1

Financial services act 2012

Answer 1

Twin peaks approach to regulation

3 regulatory bodie:, FPC, PRA, FCA

Question 2

ESIS

Answer 2

Customer must be supplied with this before mortgage application can be submitted

Question 3

Professional indemnity insurance unless

Answer 3

Can rely on guarantee of another authorised person with net tangible assets of over £10m

Are a subsidiary of a bank, building society, insurance company or friendly society

Question 4

Client money

Answer 4

Must be held in a separate account and banked within one day of receipt

Question 5

Architect cost as a percentage of self build project

Answer 5

10-15%

Question 6

Lenders most advantageous method of dealing with a defect

Answer 6

Retention

Question 7

Not part of a property description

Answer 7

Price

Question 8

Property valuation, responsibilities of building societies

Answer 8

A physical survey is not always required

Question 9

Which section of an offer of advance would details of fees and charges apply?

Answer 9

The mortgage

Question 10

Unit linked policies

Answer 10

Reversionary bonuses apply

Question 11

Standard deferred periods for income protection insurance

Answer 11

13 weeks
52
104

Question 12

In leasehold properties, buildings insurance is usually held by the…..

Answer 12

Freeholder

Question 13

How do insurers area the problem of changes to outstanding mortgage balances as a result of fluctuating interest rates?

Answer 13

By guaranteeing that premiums will not rise unless a high rate of interest becomes chargeable

Question 14

What best describes a stepped rate?

Answer 14

The rate applied to the account may move during an initial borrowing period

Question 15

The certification regime applies to….

Answer 15

Not senior managers, but whose role could cause harm to the firm or its customers

Question 16

Under tenancy in common, on the death of one owner, their share….

Answer 16

Can pass according to their will

Question 17

When will a claim be paid under a mortgage indemnity guarantee policy?

Answer 17

When a repossessed property is sold and the lender suffers a loss

Question 18

Credit reference agencies generally keep records for how long,?

Answer 18

6 years

Question 19

Which type of endowment policy will most readily facilitate repaying an interest only mortgage early

Answer 19

Unit linked

Question 20

When a buy to let property is sold, at what rate would any gains be taxed

Answer 20

18-28%

Question 21

A sole borrower dies without leaving a will. The personal representatives can sell the property to redeem the mortgage when

Answer 21

Letters of administration have been issued

Question 22

For what type of reference might a borrower be most likely to be charged a fee?

Answer 22

Existing/previous lenders reference

Question 23

Who prepares the contracts which will be exchanged during the house purchase process?

Answer 23

The vendors solicitor

Question 24

Three plus one in income multiples means….

Answer 24

3 x main income plus one times secondary

Question 25

Buildings insurance should be based on the…..

Answer 25

Rebuilding/Reinstatement cost

Question 26

For many borrowers the main reason for remortgaging is to……

Answer 26

Obtain a better interest rate deal

Question 27

Benefits under a mortgage payment protection plan are usually to protect

Answer 27

Mortgage payments plus associated bills

Question 28

Mortgage rescue schemes are operated by….

Answer 28

Local housing authorities

Question 29

A higher rate taxpayer can potentially recieve tax relief on his pension mortgage contribution at what rate…..

Answer 29

40%

Question 30

How long must the original lease have been granted to enable someone to buy a freehold?

Answer 30

21 years

Question 31

Bankruptcy normally lasts for one year but can be extended up to how long?

Answer 31

15 years

Question 32

Home reversion schemes can provide….

Answer 32

Either an income or lump sum

Question 33

What is the maximum amount by which the cap on discount for council tenants in England buying their homes could increase each year?

Answer 33

In line with inflation

Question 34

Three NHBC is best described as….

Answer 34

A regulator and standard setter

Question 35

What type of valuation figure does a basic valuation report provide?

Answer 35

An open market valuation

Question 36

Under MCOB how long must a lender keep records of dealing with customer arrears?

Answer 36

Three years

Question 37

A lender may only reposess a property of a borrower in arrears if…….

Answer 37

A court order has been granted

Question 38

If a property is sold with negative equity after using a higher lending charge….

Answer 38

They will be potentially liable to repay the balance outstanding to the higher lending charge insurer

Question 39

After what period can the owner sell a right to buy property without penalty?

Answer 39

5 years

Question 40

Under SMI when would payments commence?

Answer 40

After 39 weeks

Question 41

Maximum time period for IVA

Answer 41

Five years

Question 42

First payment upon claiming SMI support for mortgage interest

Answer 42

39 weeks

Question 43

Under the financial services act 2012, the back of England had overall responsibility for…..

Answer 43

Financial policy committee and Prudential regulation authority

Question 44

Discounts on discount mortgages are…..

Answer 44

Not repaid

Waived in entirety

Question 45

How many types of mortgage advice are available?

Answer 45

3

Question 46

What does “the average clause’ apply to?

Answer 46

Buildings insurance claims is a property is under insured

Question 47

What percentage of building society funds must be raised by deposits of its members?

Answer 47

50%

Question 48

What is not commonly reported in a basic valuation for mortgage purposes?

Answer 48

Details of all serious and potential defects

Question 49

Tenants in council houses have had the right to buy since…..

Answer 49

1980