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The Role of The Mortgage Adviser Quiz
1. What is the primary purpose of the factfind interview?
A. To gather relevant financial and personal information from the customer
B. To sell the most expensive mortgage
C. To bypass regulatory requirements
D. To finalize the mortgage application
2. Which of the following is not typically covered in a factfind interview?
A. The lender's interest rates
B. Employment history
C. Deposit amount
D. Customer's attitude to risk
3. What must an adviser prioritize when recommending a mortgage?
A. The lender's criteria
B. The customer's best interests and suitability
C. Their commission structure
D. Speed of processing
4. What is the purpose of the European Standardised Information Sheet?
A. To finalize completion
B. To approve the property survey
C. To provide key mortgage details before application
D. To transfer the mortgage deed
5. Which FCA Principle directly requires firms to "deliver good outcomes for retail customers"?
A. Principle 3
B. Principle 7
C. Principle 12
D. Principle 6
6. Which Consumer Duty outcome ensures products are designed to meet consumer needs?
A. Consumer understanding
B. Price and value
C. Products and services
D. Consumer support
7. How long must records of mortgage advice be retained?
A. 1 year from the date of advice
B. Indefinitely from the date of advice
C. 3 years from the date of advice
D. 5 years from the date of advice
8. What does the Consumer Duty's cross-cutting obligation to avoid foreseeable harm mean?
A. Customers assume all risks
B. Firms must proactively prevent practices that could harm customers
C. Only applies to high-net-worth clients
D. Always advocate eliminating all risks
9. What is the key difference between ESIS and KFI?
A. ESIS is optional
B. ESIS for MCD-regulated mortgages; KFI for pre-2016 mortgages
C. ESIS is for insurance, KFI is for mortgages
D. ESIS applies to pre-2016 mortgages; KFI for MCD-regulated
10. Which FCA Principle requires firms to communicate information "clearly, fairly, and not misleadingly"?
A. Principle 9
B. Principle 6
C. Principle 7
D. Principle 12
11. What must an adviser do if a cheaper suitable mortgage exists but isn't recommended?
A. Lower their commission
B. Demonstrate tracker eligibility
C. Requirement for arly repayment charge free product
D. Explain why the more expensive product is suitable
12. What is the Consumer Duty's requirement for "price and value"?
A. Products must be the cheapest available
B. Prices are regulated by the FCA
C. Products must provide fair value relative to benefits
D. Only applies to high-risk products
13. Which is a key component of the factfind's "attitude to risk" assessment?
A. Developer risk
B. Lender's risk appetite
C. Willingness to handle interest rate fluctuations
D. To act as a full proeprty risk assessment
14. Which principle does not apply for retail clients under the Consumer Duty?
A. Principle 12
B. Principle 3
C. Principles 6 and 7
D. Principle 1
15. What is the purpose of the "adequate explanation" in advice?
A. To meet lender criteria
B. To bw able to soruce an appropriate mortgage
C. To ensure the customer understands the product's features and risks
D. To meet compliance standards
16. What must an adviser do if a customer prefers a risky mortgage unsuitable for their profile?
A. Offer an execution-only service
B. Have them sign an advice waiver
C. Explain risks and recommend a suitable alternative
D. Detail the reasons the customer wants the product on submission
17. Which factor is not part of the factfind's "management of finances" assessment?
A. Customer's preffered lender
B. Bank account typically in credit
C. Overdraft usage frequency
D. Budgeting habits
18. What is the Consumer Duty's "good faith" obligation?
A. Removal of risks
B. Acting honestly and fairly toward customers
C. Transparent and honest marketing
D. Disclosure of all product fee options
19. When must the Consumer Duty be applied to closed-book products?
A. Immediately
B. 31 July 2023
C. 31 July 2024
D. 1 January 2025
20. What is a key requirement of the "products and services" outcome?
A. Only offer the cheapest options
B. No product testing needed
C. Products must meet the needs of their target market
D. Products must be sold to anyone who meets criteria
21. Which is not a cross-cutting obligation under the Consumer Duty?
A. Support customers' financial objectives
B. Priotize protection products to overcome underinsurance
C. Avoid foreseeable harm
D. Act in good faith
22. What is the main risk of not conducting a thorough factfind?
A. Customer confusion
B. Inadequate customer protection
C. Recommending unsuitable products
D. Regulatory scrutiny
23. Which document must be provided for a MCD-regulated mortgage?
A. A property deed
B. KFI
C. Mortgage deed
D. ESIS
24. What does Principle 12 of the FCA require?
A. Compliance with internal policies
B. Good outcomes for retail customers
C. Fair and not misleading marketing
D. Complaint liability
25. Which action violates ethical advice principles?
A. Disclosing all fees
B. Recommending a prouct based on commission
C. Explaining risks clearly
D. Aligning recommendations with customer needs
26. What is the purpose of the "attitude to risk" assessment?
A. To calculate stamp duty
B. To stress test mortgage payments
C. To determine credit score
D. To gauge comfort with financial uncertainty
27. Which FCA Principle focuses on conflict management?
A. Principle 8
B. Principle 3
C. Principle 6
D. Principle 12
28. What is a key element of "fair value" under the Consumer Duty?
A. Commission disclosure
B. Price matches competitor rates
C. Benefits justify the cost
D. No fee advice
29. Which is not part of the mortgage advice process?
A. Research
B. Implementation
C. Down valuation
D. Factfind
30. What is the adviser's duty regarding "foreseeable harm"?
A. Ensure extensive staff training
B. Prevent practices likely to cause harm
C. Transfer risk to the firm
D. Ensure updated IT systems
31. What is a key requirement of the "consumer support" outcome?
A. Extensive complaints handling process
B. Assistance for customers to realize product benefits
C. Automation for workflow efficiency
D. Maximized customer service hours
32. Which factor is critical in assessing mortgage affordability?
A. Decision in Principle assessment
B. Solicitor costs
C. Customer's ability to handle potential rate rises
D. Adviser's commission
33. What is the adviser's role in "implementing the recommendation"?
A. Submit the application and liaise with the lender
B. Ensure smooth operation of the property chain
C. Fully underwrite the loan
D. Seeking BDM approval
34. What is the consequence of unethical advice?
A. Short term gain for long term pain
B. Customer harm and regulatory action
C. Litigation and imprisonment
D. Higher commissions
35. What must an adviser avoid when presenting recommendations?
A. Closed questions
B. Utilisation of persuasion
C. Unnecessary jargon
D. Only presenting one product
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Assessing The Applicant’s Financial Status Quiz
1. What must lenders establish under MCOB 11?
A. A written policy for assessing borrower repayment ability
B. Guidelines for property valuation
C. Rules for interest rate adjustments
D. Criteria for mortgage insurance
2. Which income type requires averaging over 3 years for affordability checks?
A. Guaranteed overtime
B. Basic salary
C. Sales-related bonuses
D. Pension income
3. What is required to validate maintenance payments in mortgage applications?
A. Bank statements showing 6 months of deposits
B. A court order with a remaining term
C. A letter from the payer's employer
D. Proof of child's birth certificate
4. Which document is not acceptable for verifying self-employed income?
A. HMRC tax calculations
B. Accountant's certificate
C. Last 3 monthly payslips
D. Full business accounts
5. What triggers the need for a previous employer's details?
A. Applicant's income below £30,000
B. Current employment duration less than 3 years
C. Self-employed status
D. Applicant aged under 25
6. How are company directors owning 25% of shares typically treated?
A. As salaried employees
B. As self-employed applicants
C. As dividend recievers
D. As employees if they have an employment contract
7. Which item reduces gross profit in a self-employed business?
A. Raw material costs
B. Personal drawings
C. Mortgage payments
D. Corporation tax
8. What does a balance sheet show?
A. Annual revenue trends
B. Assets/liabilities on a specific date
C. Monthly expenditure breakdown
D. Credit score history
9. Why do lenders ask about dependents aged 17+ in England/Wales?
A. To calculate household expenses
B. To avoid overriding interests under Land Registration Act
C. To verify immigration status
D. To assess life insurance needs
10. Which factor is not part of the "three Ps" of mortgage assessment?
A. Person
B. Property
C. Purpose
D. Payment
11. What replaces self-certification mortgages under current rules?
A. Full affordability assessments
B. Higher income multiples
C. Guarantor requirements
D. Shorter loan terms
12. How is net profit calculated for a sole trader?
A. Turnover - raw material costs
B. Gross profit – routine business expenses
C. Total income – personal drawings
D. Revenue + capital injections
13. What is a key difference between sole traders and company directors?
A. Directors pay corporation tax on profits
B. Sole traders must file VAT returns
C. Directors cannot receive payslips
D. Sole traders are always UK residents
14. Which income is most likely to be excluded from affordability checks?
A. Dividend payments
B. Regular shift allowance
C. One-time inheritance
D. Quarterly bonuses with a several year history
15. What must a self-employed applicant provide if turnover exceeds VAT thresholds?
A. Short tax return only
B. Detailed expense categories in tax returns
C. Consent from business partners
D. Proof of equipment leases
16. Why do lenders review personal drawings vs net profit?
A. To assess lifestyle inflation
B. To ensure the applicant isn't overdrawing from the business
C. To calculate tax liabilities
D. To verify business registration
17. Which scenario would raise lender concerns in self-employed accounts?
A. Consistent net profit over 3 years
B. Drawings exceeding net profit for 3 consecutive years
C. A new bank loan in the balance sheet
D. High turnover but low raw material costs
18. What is required for non-resident mortgage applicants?
A. Strong English language ability
B. Specific lending conditions attached
C. Proof of UK citizenship connection
D. Guarantor from the UK
19. Which document confirms taxable profit for self-employed applicants?
A. Bank statements
B. HMRC tax calculations
C. Employer reference letter
D. Balance sheet
20. What is the primary purpose of a mortgage application declaration?
A. To authorize credit checks and confirm information accuracy
B. To waive the applicant's right to legal recourse
C. To lock in interest rates
D. To approve property insurance
21. Which income requires an employer's reference if documents are unavailable?
A. Basic salary
B. Commission
C. Pension income
D. Pension drawdown
22. What is a "consent to mortgage" form used for?
A. To allow dependents over 17 to co-sign
B. To prevent overriding interests in England/Wales
C. To verify marital status
D. To allow for legal charge registration
23. Which factor do lenders ignore in income multiples?
A. Joint applicant incomes
B. Projected future earnings
C. Gross annual income
D. Current debt obligations
24. What must an accountant's certificate confirm?
A. Business turnover for 1 year
B. Personal debt of the applicant
C. Income for past 2–3 years
D. Property valuation accuracy
25. Which item appears on a profit/loss account but not a balance sheet?
A. Annual net profit
B. Outstanding loans
C. Business premises value
D. Bank overdrafts
26. Why might lenders be flexible with a professional's borrowing capacity?
A. Lower risk of unemployment
B. Expected income growth
C. Higher credit score
D. Shorter loan terms
27. Which applicant detail helps lenders assess family unit stability?
A. Nationality
B. Number/Ages of dependents
C. Number of previous addresses
D. Marital status history
28. What is the consequence of fraudulent mortgage applications?
A. Higher interest rates
B. Mandatory financial counseling
C. Potential prison sentences
D. Automatic loan denial
29. Which regulation prohibits self-certification mortgages?
A. Proceeds of Crime Act 2002
B. MCOB rules
C. Land Registration Act 1925
D. Consumer Credit Act 1974
30. What is verified by a P60 document?
A. Self-employed net profit
B. Annual salary and tax paid
C. Monthly commission earnings
D. Business turnover
31. Which factor is not part of expenditure assessment?
A. Utility bills
B. Grocery expenses
C. Existing loan repayments
D. Projected inheritance
32. What is the minimum period most lenders review for self-employed income?
A. 1 year
B. 2–3 years
C. 5 years
D. 6 months
33. Which item is a liability on a balance sheet?
A. Company vehicles
B. Outstanding invoices to suppliers
C. Office equipment
D. Cash reserves
34. What is the purpose of corroborating income?
A. To reduce interest rates
B. To comply with MCOB reliability requirements
C. To expedite application processing
D. To waive credit checks
35. Which applicant would need a previous address listed?
A. Moved within the last 3 years
B. Self-employed for 5 years
C. Non-resident status
D. Fixed-term contract employee
36. What does a short tax return include for sole traders?
A. Detailed expense categories
B. Total turnover and net profit
C. Balance sheet summary
D. Capital account changes
37. Which income type is most stable for lenders?
A. Commission
B. Basic salary
C. Quarterly bonuses
D. Overtime
38. What does the capital account in a business include?
A. Monthly utility bills
B. Surplus profits from prior years
C. Raw material inventory
D. Employee salaries
39. Which document proves identity under anti-money laundering rules?
A. Utility bill
B. Employer reference
C. Credit card statement
D. Two forms of ID
40. What is the lender's priority in assessing expenditure?
A. Discretionary spending habits
B. Total debt-to-income ratio
C. Current rent payments
D. Childcare costs
41. Which applicant would trigger non-resident lending conditions?
A. UK citizen working abroad
B. Self-employed in the UK
C. Recent immigrant with residency
D. Retired with UK pension
42. What is the primary risk if personal drawings exceed net profit?
A. Higher tax liability
B. Business insolvency risk
C. Lower credit score
D. Reduced loan-to-value ratio
43. Which item is not part of a mortgage application form?
A. Dependents' ages
B. Employer's address
C. Preferred property location
D. Repayment method
44. What does MCOB 11A require intermediaries to submit?
A. Accurate customer information for affordability checks
B. Property valuation reports
C. Credit score recommendations
D. Insurance policy options
45. What does a profit/loss account exclude?
A. Gross turnover
B. Business expenses
C. Personal tax liabilities
D. Net profit
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Checking The Applicant's Credit Status Quiz
1. Which regulation implements the Mortgage Credit Directive?
A. Financial Services and Markets Act 2000
B. Companies Act 2006
C. Consumer Rights Act 2015
D. Data Protection Act 2018
2. What is the primary purpose of checking bank statements in mortgage applications?
A. To identify all bank accounts held by the applicant
B. To verify the applicant's regular income and expenditure patterns
C. To assess the applicant's investment portfolio
D. To determine the applicant's credit score
3. Which of the following would not appear on a standard credit reference search?
A. County Court Judgments
B. Payday loans taken within the last month
C. Transactions with family members
D. Electoral roll registration
4. How long does a default typically remain on a credit file?
A. 3 years
B. 10 years
C. Indefinitely
D. 6 years
5. What is a key limitation of the electoral roll for address verification?
A. It only includes homeowners
B. It excludes non-UK citizens
C. It is updated annually with a 1 October cutoff
D. It requires manual submission by lenders
6. Which factor is least likely to improve a credit score?
A. Long-term employment
B. Timely bill payments
C. Low credit utilization
D. Multiple recent credit applications
7. What does a "cut-off score" represent in credit scoring?
A. The maximum loan amount a lender will offer
B. The minimum needed for mortgage approval
C. The interest rate threshold for high-risk borrowers
D. The point at which a guarantor is required
8. Which organization is not a major UK credit reference agency?
A. Experian
B. Equifax
C. FICO
D. Credit Karma
9. Why might lenders view payday loans negatively?
A. They suggest potential budgeting difficulties
B. They indicate short-term financial risk
C. They are often fraudulent
D. They reduce credit utilization ratios
10. What is the primary advantage of credit scoring systems for lenders?
A. They eliminate all human bias
B. They significantly reduce default rates
C. They bypass affordability checks
D. They allow rapid processing of high-volume applications
11. Which information would not be visible on a bank statement review?
A. Regular salary deposits
B. Pending court judgement
C. Overdraft usage
D. Direct debit failures
12. What is the main risk of "thin file" applicants?
A. They often have hidden debts
B. They automatically qualify for higher interest rates
C. They cannot be credit scored accurately
D. They are statistically more likely to default
13. Which practice could indicate potential money laundering?
A. Large cash deposits without explanation
B. Inconsistent salary payments
C. Regular mortgage payments
D. Use of overdraft facilities
14. Under data protection laws, applicants have the right to:
A. Opt out of credit reporting
B. Remove negative credit history
C. Opt out of all credit checks
D. Access their credit reference files
15. What is a key weakness of credit scoring models?
A. They only work for unsecured lending
B. They cannot predict individual behavior with certainty
C. They ignore income verification
D. They are prohibitively expensive to implement
16. Which factor would most likely trigger a manual review of a mortgage application?
A. A late mortgage payment
B. Employment in the public sector
C. A score just below the cut-off threshold
D. Use of a mortgage broker
17. What does a returned cheque on a bank statement suggest?
A. Potential cash flow issues
B. A monetary refund
C. High credit utilization
D. Fraudulent activity
18. Why do lenders use multiple data sources for credit checks?
A. To get an aggregated credit score
B. To exempt data protection laws
C. To cross-verify information completeness
D. To identify guarantor candidates
19. Which legislation primarily governs credit reference agencies?
A. Data Protection Act 2018
B. Consumer Credit Act 1974
C. Financial Services and Markets Act 2000
D. Statute of Frauds 1677
20. What is the primary purpose of anti-money laundering checks?
A. To reduce interest rates for low-risk borrowers
B. To accelerate mortgage approvals
C. To secure solicitor approval
D. To identify illegitimate sources of funds
21. Which factor is most likely to improve an applicant's credit score over time?
A. Closing all credit accounts
B. Maintaining stable, well-managed credit
C. Frequently changing addresses
D. Going without a mortgage
22. What is a key requirement for a valid guarantee under the Statute of Frauds 1677?
A. Verbal agreement between parties
B. Witnessed by a solicitor
C. Written documentation
D. Registration with Land Registry
23. In a "limited liability" guarantee, the guarantor is typically responsible for:
A. The full mortgage debt
B. The shortfall beyond normal lending criteria
C. Just the interest payments
D. Only the deposit amount
24. Which relationship is most likely to raise concerns about undue influence?
A. Employer and employee
B. Neighbors
C. Business partners
D. Parent and adult child
25. What must lenders ensure before accepting a guarantor?
A. The guarantor understands the obligations
B. The guarantor owns multiple properties
C. The borrower has no other debts
D. The guarantee is on unsecured lending
26. Which case established the need for independent legal advice for guarantors?
A. Lloyds Bank v Waterhouse [1991]
B. National Westminster Bank v Morgan [1985]
C. Barclays Bank plc v O'Brien [1994]
D. Royal Bank of Scotland v Etridge [2001]
27. What is a key difference between a guarantor and a joint borrower?
A. Guarantors have property ownership rights
B. Joint borrowers need lower income verification
C. Guarantors can be released more easily
D. Joint borrowers share legal ownership
28. Under MCOB 11.6, lenders must assess a guarantor's:
A. Political affiliations
B. Affordability as if they were the borrower
C. Inheritance prospects
D. Existing property
29. What typically happens to guarantor savings accounts if the borrower defaults?
A. The lender can access the funds
B. They earn less interest
C. They are transferred to the borrower
D. They become tax-free
30. Which scenario would likely invalidate a guarantee?
A. The guarantor received independent advice
B. The borrower had poor credit history
C. The lender changed policy
D. The guarantor was misled about the terms
31. What is a key risk for joint borrower/sole proprietor arrangements?
A. They avoid all SDLT liabilities
B. They require higher deposit percentages
C. The non-owner borrower has liability without property rights
D. They are exempt from credit checks
32. Which document would not be required for a guarantor?
A. Proof of identity
B. Credit report
C. Income verification
D. Mortgage deed
33. What is the primary advantage of a guarantor mortgage for first-time buyers?
A. It may enable higher borrowing
B. It eliminates affordability checks
C. It guarantees fixed interest rates
D. It removes credit history requirements
34. In Lloyds Bank v Waterhouse [1991], why was the guarantee invalid?
A. The loan amount was too small
B. The guarantor was illiterate and misinformed
C. The borrower had excellent credit
D. The lender used outdated forms
35. What must happen if a borrower requests a further advance with an existing guarantor?
A. The guarantor must automatically consent
B. The original guarantee becomes void
C. A new credit score is unnecessary
D. The guarantor must be informed and may refuse
36. Which type of guarantee is now prohibited?
A. Limited liability
B. Property-secured
C. Unlimited liability
D. Income-contingent
37. What is a key duty of lenders regarding guarantors?
A. To ensure guarantors understand their exposure
B. To maximize guarantee amounts
C. To access guarantors via their panel
D. To prioritize family members as guarantors
38. Which factor is least relevant when assessing a guarantor?
A. Their understanding of the commitment
B. Their relationship to the borrower
C. Their financial stability
D. Their political views
39. What happens if a guarantor requests release from their obligations?
A. The mortgage automatically defaults
B. Lenders typically assess borrower's independent affordability
C. The borrower must find a replacement
D. Lenders must always agree
40. In joint borrower/sole proprietor arrangements, what SDLT advantage exists?
A. Complete SDLT exemption
B. Reduced rates for all parties
C. Avoidance of second-home surcharge for non-owner
D. Deferred payment options
41. What is a critical weakness of guarantor arrangements for the guarantor?
A. They do not receive regular account statements
B. Their credit score decreases automatically
C. They can veto property sales
D. They may be liable without early warning of borrower default
42. What defines insolvency?
A. Liabilities exceeding assets
B. Temporary cash flow issues
C. High credit utilization
D. 3 missed mortgage payments
43. Which debt solution involves freezing interest and making fixed payments?
A. Administration order
B. Individual Voluntary Arrangement (IVA)
C. Debt Relief Order
D. Bankruptcy
44. How long does bankruptcy typically remain on a credit file?
A. 3 years
B. 12 years
C. 6 years
D. Until debts are repaid
45. Which debt solution is available for debts under £30,000 and minimal assets?
A. Debt Relief Order
B. Bankruptcy
C. Debt Management Plan
D. Consolidation loan
46. What is the primary risk of debt consolidation mortgages?
A. They always reduce monthly payments
B. They convert unsecured debt to secured status
C. They significantly reduce credit scores
D. They capitulate interest charges
47. Which court order enforces child maintenance payments?
A. CCJ
B. Bankruptcy Order
C. Administration Order
D. Attachment of Earnings
48. What is the primary purpose of a Debt Management Plan?
A. To legally bind creditors
B. To negotiate reduced payments informally
C. To protect assets from seizure
D. To remove negative credit entries
49. How long does a Debt Relief Order typically last?
A. 6 months
B. 3 years
C. 1 year
D. 5 years
50. Which insolvency solution always involves court proceedings?
A. IVA
B. DMP
C. DRO
D. Bankruptcy
51. What is a key advantage of an IVA over bankruptcy?
A. It may allow retention of property
B. It's always shorter in duration
C. It doesn't appear on credit files
D. It requires no creditor agreement
52. Which debt solution freezes all creditor actions for a temporary period?
A. Administration Order
B. Breathing Space Scheme
C. Consolidation Loan
D. Trust Deed
53. What is the minimum debt threshold for bankruptcy in England/Wales?
A. £1,000
B. £10,000
C. £5,000
D. No minimum
54. Which credit file entry would be most concerning to lenders?
A. Unsatisfied CCJ from 2 years ago
B. Multiple late payments in the last 6 months
C. Electoral roll discrepancy
D. Active bankruptcy
55. What happens to unpaid CCJs after 6 years?
A. They are automatically removed from credit files
B. They double in value
C. They convert to bankruptcy
D. They become secured debts
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Suitability Quiz
1. What does APRC stand for in mortgage terms?
A) Annual Percentage Rate of Credit
B) Annual Percentage Rate of Charge
C) Annual Payment Rate of Credit
D) Annual Payment Rate of Charge
2. Which body regulates mortgage advice in the UK?
A) Bank of England
B) Prudential Regulation Authority
C) Financial Conduct Authority
D) HM Treasury
3. What is the main risk of an interest-only mortgage?
A) No capital is repaid during the term
B) Higher monthly payments
C) Early repayment charges
D) Limited product choice
4. Which is a typical feature of a fixed-rate mortgage?
A) Payments vary monthly
B) Interest rate follows the base rate
C) No early repayment charges
D) Interest rate stays the same for a set period
5. What does LTV stand for?
A) Loan to Variable
B) Loan to Value
C) Liability to Value
D) Liability to Variable
6. Which fee is paid to secure a mortgage product?
A) Valuation fee
B) Legal fee
C) Arrangement fee
D) Broker fee
7. What is the main benefit of overpaying a mortgage?
A) Reduces total interest paid
B) Increases LTV
C) Extends mortgage term
D) Avoids arrangement fees
8. Which is a common early repayment charge period?
A) 1 month
B) 3 months
C) 6 months
D) 2–5 years
9. What is a mortgage term?
A) The fixed-rate period
B) The total length of the loan
C) The time between payments
D) The lender’s offer validity
10. Which type of mortgage adjusts with the base rate?
A) Fixed-rate
B) Capped-rate
C) Tracker
D) Discounted
11. What is the purpose of a mortgage illustration?
A) To outline key features and costs
B) To confirm legal title
C) To arrange property insurance
D) To set the completion date
12. Which is a typical repayment strategy for interest-only?
A) Credit card balance
B) Personal loan
C) Overdraft
D) Investment plan
13. What is the main advantage of a capped-rate mortgage?
A) Payments always decrease
B) Interest rate won’t rise above a set level
C) No early repayment charges
D) Guaranteed lowest rate
14. What is the main drawback of a variable-rate mortgage?
A) Fixed payments
B) Limited product choice
C) Payments can increase
D) Higher arrangement fees
15. Which cost is typically paid on completion?
A) Legal fees
B) Booking fee
C) Valuation fee
D) Arrangement fee
16. What is the purpose of a mortgage valuation?
A) To check structural integrity
B) To provide a detailed survey
C) To set the completion date
D) To confirm the property value for the lender
17. Which mortgage type offers both capital and interest repayment?
A) Interest-only
B) Repayment
C) Offset
D) Bridging
18. What is a key feature of an offset mortgage?
A) Fixed interest rate
B) Linked to base rate
C) Savings offset mortgage balance
D) No overpayment facility
19. Which factor most affects LTV?
A) Property value
B) Mortgage term
C) Interest rate
D) Arrangement fee
20. What is the main benefit of a portability feature?
A) Lower interest rate
B) Reduced fees
C) Shorter term
D) Transfer mortgage to new property
21. Which scenario justifies a longer mortgage term?
A) Affordability constraints
B) Low LTV ratio
C) Young age
D) High-risk tolerance
22. What is excluded from a credible repayment strategy?
A) Regular savings
B) Speculative inheritance
C) Asset sales
D) Pension income
23. Which factor affects suitability for fixed-rate mortgages?
A) Seeking best possible deal
B) Borrower's affordability
C) Borrower's need for payment stability
D) Market trends
24. What is a lender's duty in an interest-only review?
A) Ensure investment performance
B) Adjust repayment terms unilaterally
C) Waive penalties if applicable
D) Discuss remedial actions if strategy fails
25. Which borrower profile suits part-and-part mortgages?
A) Balanced risk tolerance
B) Those wanting a mixture of fixed and variable rate
C) Cautious attitude
D) Adventurous investor
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