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So you think you know your stuff –but do you? Test yourself with
specimen CeMAP exam revision questions courtesy of ifs School of
Finance – don’t worry, we tell you the answers as well! For more help
with revision, lessons and to get your own personal CPD certificate don’t
forget to visit the CPD section on our website mortgageintroducer.com
QUESTIONS C - £9,375. A - the associated repayment vehicle is paid
D - £9,750. for with company funds.
1. Jennie has taken out a lifetime mortgage,
3. In relation to CAT standard mortgages, B - the borrower is a corporate entity.
which meets the SHIP Code of Practice
some conditions apply to all loans and some C - the lender makes a loan to a group of
requirements. If she takes advantage of the
to certain loans. Which of the following is a borrowers.
scheme's mortgage interest 'roll up' facility,
specific requirement for a fixed rate D - the security for the loan is non-
what are the implications?
mortgage to meet CAT standards? residential property.
A - Her interest payments will gradually
A - Interest must be calculated on a daily
decrease year on year.
basis. 6. Aggie is remortgaging her home using a
B - Her repayment vehicle may not be
B - The arrangement fee cannot exceed £150. lifetime mortgage. Will the loan be
sufficient to repay the mortgage at the
C - There can be no separate charge for a regulated by the Financial Services
end of the term.
mortgage indemnity guarantee. Authority?
C - It increases the debt which needs to be
D - There must be no early repayment A - No, irrespective of her age.
repaid on death.
charge levied at any time. B - Only if she is over the age of 65.
D - The arrangement might result in a
C - Only if she is under the age of 75.
negative equity situation if interest rates
4. Apart from the need to budget, what other D - Yes, irrespective of her age.
key factor can influence the attractiveness of
a fixed rate mortgage compared to a variable 7. Which of the following statements in respect
2. Sandra is considering a £150,000 interest
rate mortgage? of a low-start mortgage is correct?
only offset mortgage with a variable interest
A - A desire to avoid early repayment A - Additional forms of security are usually
rate of 6.5%. After meeting the costs of the
mortgage she will have £15,000 in a deposit
B - A desire to keep the mortgage term as B - The borrower may be allowed to select
account, earning 4% interest. Assuming no
short as possible. an initial rate of interest within certain
changes to interest rates, how much interest
C - The ability to avoid future interest rate limits.
will she be charged each year if she offsets
volatility. C - The outstanding debt at the end of the
D - The borrower's state of health. low-start period will always be more
A - £8,775.
than the original loan.
B - £9,270.
5. A commercial mortgage is best described as D - They are structured on an interest-only
a mortgage where: basis for the initial period.
October 2009 Mortgage Introducer
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