MI34-35_CeMap.qxd 22/1/09 15:31 Page 2
34 | Training
CeMAP
revision
So you think you know your stuff – but do you? Test yourself with
specimen CeMAP exam revision questions courtesy of The ifs School
of Finance. Don't worry – we give you the answers as well! This
month's questions look at more mortgage arrears and post-
completion issues
Questions C - She will be charged an interest rate above A - A 6% cashback mortgage.
the standard variable rate. B - A variable rate tracker mortgage.
1. What is meant by the term 'a clog on the D - Which of the following is true where a C - An interest only mortgage.
equity of redemption'? When: remortgage is arranged as part of a debt D - Extending the term to 30 years to min-
A - a borrower defaults on payments. consolidation programme? imise monthly repayments.
B - a borrower refuses a request from the
lender to repay the mortgage. 4. A second mortgagee: 7. A borrower with a low-cost endowment
C - a lender includes a clause in the mort- A - It is likely to increase the risk of the mortgage is in financial difficulties and con-
gage deed that deliberately prevents a property being repossessed. sidering surrendering his policy and switch-
borrower from repaying a mortgage B - The homeowner's overall borrowing risk ing to a repayment mortgage. One of the
early. will be reduced by securing the loans in disadvantages of this approach is that:
D - the lender delays providing the borrower this way. A - an early repayment charge will be
with a redemption statement. C - The interest rate will be higher to reflect payable.
the reason for the additional borrowing. B -replacement life cover is needed.
2. Paul wishes to make a part redemption pay- D - The lender will not impose a higher C - the mortgage term must be extended.
ment on his mortgage. Which of the follow- lending charge. D - there will be repayment shortfall at the
ing statements is correct? end of the mortgage term
A - An early repayment charge must not be 5. What risk is a borrower taking by consolidat-
applied. ing unsecured debts into a repayment mort- 8. Joanne's property has recently been
B - If the payment is made, Paul must reduce gage? taken into possession by her mortgage
his monthly payment. A - The increased risk of negative equity at lender. What are the implications for
C - If the payment is made, the existing some point in the future. Joanne?
mortgage term must be maintained. B - The risk that mortgage interest rates A - If the lender sells the property for
D - The lender may stipulate a minimum might be higher than for unsecured bor- more than the original loan taken out
amount. rowing. by Joanne, then any difference
C - The risk that the associated investment between the original loan and the sale
3. Penelope wishes to remortgage in order to vehicle will fail to repay the capital at the price must always be immediately
raise finance to repay her credit card debts. end of the term. passed to Joanne.
Of which particular issue should she be D - There is no particular risk to this B - Joanne can only stop the lender selling
made aware if she follows this route? arrangement. the property by clearing the outstand-
A - It is likely that her credit rating will be 6. Amy is planning to remortgage her property ing arrears.
severely affected. to consolidate a number of unsecured C - Joanne can reclaim her property by
B - It is likely that the overall long-term costs debts. Which of the following might be a redeeming her loan in full before the
will be higher. sensible option? property is sold.
February 2009 Mortgage Introducer
www.mortgageintroducer.com
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57