MIp40-41_0210:MI 12 Jan 21/01/2010 15:53 Page 2
40
Training
CeMAP
revision
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 A - £20. result in the lowest amount of interest
B - £180. payable over the term?
1.With a 25-year capital and interest mortgage,
C - £600. A - The annual basis.
assuming interest rates remain unchanged,
D - It would be more expensive. B - The daily basis.
which of the following statements regarding
C - The monthly basis.
the monthly payments is true?
4. George is considering remortgaging to reduce D - There would be no difference between the
A - More capital will be repaid each month if
his outgoings. He currently has an £80,000 three methods.
interest rates rise.
interest only mortgage on a variable rate of
B - Payments in the early years will be more
6.2%. Which of the following packages would 7. An advantage of a LIBOR mortgage is that
capital than interest.
cost the least overall over the next three years, the:
C - Payments in the last few years will be more
assuming variable rates remain the same and a A - borrower is protected against arbitrary
capital than interest.
lock in to the variable rate after the deal ends? interest rate increases imposed by the
D - Payments throughout the term will be
A - A 1 year fixed rate of 3.5% with no lender.
evenly balanced between interest and
arrangement fee. B - borrower knows that the interest rate
capital.
B - A 2 year fixed rate of 4.5% with an charged will not exceed a pre-determined
arrangement fee of £399. level.
2.Which of the following might be considered
C - A 3 year fixed rate of 5.15% with an C - interest rate charged is reviewed annually
as a disadvantage of an interest-only
arrangement fee of £199. to reflect changes in the Bank of England
mortgage? The:
D - A stepped discount of 1% in year 1 and base rate.
A - interest rate charged is usually higher than
2% in year 2, with a £50 arrangement fee. D - interest rate charged will always be less
for a repayment mortgage.
than the lender's standard variable rate.
B - mortgage cannot be arranged on a
5.Which of the following statements in relation
monthly or daily rest basis.
to bridging finance is true? 8.Nicky pays an arrangement fee of £150 when
C - mortgage must have a repayment vehicle.
A - Closed bridging finance is less risky than applying for a five year fixed rate mortgage,
D - outstanding capital remains constant
open bridging finance. with a one year 'overhang'. Which of the
throughout the mortgage term.
B - Closed bridging finance is more expensive following statements is true?
than open bridging finance. A - Early repayment charges will not usually
3.Ryan and Laura are buying a new house and
C - Open bridging finance is no more risky apply.
have been offered a £120,000 25 year
than closed bridging finance. B - Monthly payments will only increase when
repayment mortgage at 6%, giving a monthly
D - Open bridging finance is only appropriate the Bank of England rate changes.
payment of £6.52 per £1,000 borrowed. How
if a client has exchanged contracts on his C - The early repayment charge will last for
much would they save each month if
existing property. the fixed period only.
anything, to the nearest £5, by opting for a
D - The fee is not usually refundable if the
pure interest only mortgage at the same rate
6. Which method of calculating the interest on a application is subsequently cancelled.
instead?
variable rate repayment mortgage would
February 2010 Mortgage Introducer www.mortgageintroducer.com
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