Unit 6

Question 1

WHICH OF THE FOLLOWING WOULD BE MOST LIKELY TO APPLY IN RESPECT OF A REMORTGAGE BUT NOT A FURTHER ADVANCE?

• Administration fee.
• Affordability assessment.
• Legal fees.
• Valuation fee.

Answer 1

Legal Fees

Question 2

A MORTGAGE LENDER OR ADVISER MUST INFORM THE CUSTOMER OF ALTERNATIVE FINANCE OPTIONS WHEN THEY ARE CONSIDERING A:

• mortgage to buy a buy-to-let property.
• mortgage to buy their first property.
• remortgage to reduce their interest rate.
• second charge to pay for a conservatory.

Answer 2

Second charge to pay for a conservatory

Question 3

KATHERINE HAS CHANGED JOBS AND IS NOW ON A LOWER SALARY. SHE WISHES TO REDUCE THE MONTHLY COSTS OF HER REPAYMENT MORTGAGE BY INCREASING THE TERM. WHICH OF THE FOLLOWING IS TRUE?

HER LENDER:

• can refuse the request only if Katherine has been in arrears in the past.
• has no obligation to agree to the request.
• is obliged to agree to the request under MCOB rules unless it is deemed unreasonable.
• must agree to her request if she can provide evidence of her changed income.

Answer 3

Has no obligation to agree to the request

Question 4

GAVIN’S APPLICATION FOR A SUPPORT FOR MORTGAGE INTEREST (SMI) LOAN WAS DECLINED BECAUSE HE RECEIVED:

• contribution-based Jobseeker’s Allowance.
• income-related Employment and Support Allowance.
• Pension Credit.
• Universal Credit.

Answer 4

Contribution-based Jobseeker’s Allowance

Question 5

WHICH OF THE FOLLOWING IS NOT AN OPTION AVAILABLE TO THE COURT WHEN CONSIDERING AN APPLICATION FOR POSSESSION?

TO:
• adjourn the case.

• grant a suspended possession order.
• grant an outright possession order.
• order the borrower to repay the debt within a specified period.

Answer 5

Order the borrower to repay the debt within a specified period

Question 6

CHRIS’S LENDER HAS CONFIRMED THAT HER MORTGAGE PAYMENTS ARE IN ARREARS AND, IN LINE WITH THE RULES CONTAINED IN MCOB, IS WRITING TO HER. WHICH OF THE FOLLOWING IS TRUE OF THAT COMMUNICATION?

IT MUST:

• be sent within 15 calendar days of the lender becoming aware of the arrears.
• include a list of all payments made in the past 12 months.
• include full details of all charges incurred as a result of the payment shortfall.
• state the total mortgage debt, including redemption charges.

Answer 6

Include full details of all charges incurred as a result of the payment shortfall

Question 7

THE MORTGAGE CONDUCT OF BUSINESS (MCOB) RULES REQUIRE A LENDER TO MAKE A RECORD OF ITS DEALINGS WITH A BORROWER WHOSE REGULATED MORTGAGE CONTRACT IS IN ARREARS. FOR HOW LONG MUST THIS RECORD BE RETAINED?

• One year from the date of the dealings with the borrower.
• Three years from the date of the dealings with the borrower.
• Five years from the date of the dealings with the borrower.
• Records of dealings with arrears must be kept indefinitely.

Answer 7

Three years from the date of the dealings with the borrower

Question 8

WHICH OF THE FOLLOWING IS TRUE IN RELATION TO SUPPORT FOR MORTGAGE INTEREST (SMI)?

• It is a loan secured by a first charge on the applicant’s home.
• Payments from the scheme can be received for a maximum of 104 months.
• The interest rate charged is reviewed every six months.
• The minimum voluntary repayment is £50.

Answer 8

The interest rate charged is reviewed every 6 months