Unit 1, Topic 13

Question 1

Which of the following is not true in relation to a repayment mortgage?
A) The higher the interest rate, the higher the monthly repayment to the lender
B) Life cover is built in
C) The loan is guaranteed to be fully repaid at the end of the term, providing monthly repayments are maintained
D) At the beginning of the term most of the monthly repayment is paying interest on the loan

Answer 1

B) Life cover is built in

Question 2

It is not the responsibility of the lender to ensure that a borrower has a repayment vehicle in place for an interest-only mortgage. True or False?

Answer 2

False

Question 3

An advantage to a flexible mortgage is the ability to take further advances up to the lender’s prearranged limit. True or False

Answer 3

True

Question 4

What is the main advantage of a capped-rate mortgage?
A) If the interest rates go up, the mortgage interest rate will not exceed a prearranged limit
B) The mortgage interest rate will never exceed Bank rate
C) The amount payable is fixed for the duration of the capped period
D) There is a discount off the normal variable mortgage interest rate

Answer 4

A) If the interest rates go up, the mortgage interest rate will not exceed a prearranged limit