10 nulle nullrtgage nullnduct of nullsiness nullles require D A remortgage would not be regulated under the and usually a guarantee that the mortgage will be
a lender to make a record of its dealings with a nullnsumer nulledit legislation, it would fall under the repaid on death. If the policy is surrendered this life
borrower whose regulated mortgage contract is in nullnull nullnull. cover will be cancelled and need to be replaced.
arrears. nullr how long must this record be retained? q4 cnullrenull nullsnullrnull a c The terms of the new replacement are subnullct to
a nulle year from the date on which the arrears a As the second debt has increased the mortgage agreement between lender and borrower. There is no
were cleared. this will increase payments and thereby potentially necessity to extend the term.
B nulle year from the date the account nullst fell increase the chance of the borrower defaulting and D The main advantage of a repayment mortgage is
into arrears. repossession occurring. that provided payments are made when due, the
c nullve years from the date an initial arrangement B The borrowing risk arguably increases because scheduled last payment will repay the last element of
to clear the arrears was made. the chances of defaulting exist with subsequent outstanding capital.
D nullve years from the date on which the arrears repossession a possibility. q8 cnullrenull nullsnullrnull c
were cleared. c The interest rate effectively renullcts the lendernulls a nullanne will only be entitled to any surplus over the
risk. nullrrowing to consolidate, in itself, is not a forced sale price after all other costs, expenses, other
ansnullrs anD nullstinull ications particular risk and will not necessarily result in a higher secured loans and arrears have been cleared.
q1 cnullrenull nullsnullrnull c rate. The lender however will not lend if the risk is B nullce the possession order is granted repayment
a A nulllog on the equity of redemptionnullis a legal term disproportionate. of arrears is not legally sufnullient. All the mortgage
used by a court if it considers that a condition has D A higher lending charge is a function of the loan-to- account must be cleared.
been imposed by the lender to prevent the borrower value percentage. nullbt consolidation will increase the c nullen after the date that possession has been
from paying back a loan. This can often relate to amount to be borrowed which could therefore lead to granted to the lender the borrower can still return to
redemption penalties. such a charge being required. the lender to settle the mortgage account right up until
B A nulllog on the equity of redemptionnullis a legal term q5 cnullrenull nullsnullrnull a the disposal of the property.
used by a court if it considers that a condition has a nullnsolidating debts into a mortgage increases the D The lender has no obligation to cover nullannenulls loan
been imposed by the lender to prevent the borrower capital outstanding within the mortgage. If house from the sale but is obliged to seek the best price.
from paying back a loan. This can often relate to prices should fall, a negative equity situation can be q9 cnullrenull nullsnullrnull D
redemption penalties. triggered more quickly if the loan-to-value ratio has a nullder nullnull rules nullhapter null.null the lender must
c A nulllog on the equity of redemptionnullis a legal term been increased. write to the borrower within null business days of
used by a court if it considers that a condition has B nullcause unsecured debts are by their nature riskier becoming aware that the account is in arrears.
been imposed by the lender to prevent the borrower to the lender than secured debts, they will carry a B nullder nullnull rules nullhapter null.null the lender must
from paying back a loan. This can often relate to higher interest rate. write to the borrower within null business days of
redemption penalties. c nullither unsecured debts nor repayment mortgages becoming aware that the account is in arrears.
D A nulllog on the equity of redemptionnullis a legal term are linked to repayment by use of an investment c nullder nullnull rules nullhapter null.null the lender must
used by a court if it considers that a condition has vehicle. write to the borrower within null business days of
been imposed by the lender to prevent the borrower D nullnsolidating unsecured debts within a second becoming aware that the account is in arrears.
from paying back a loan. This can often relate to mortgage can increase the risk of subsequent default D nullder nullnull rules nullhapter null.null the lender must
redemption penalties. if payments are increased and cannot be met. nullfault write to the borrower within null business days of
q2 cnullrenull nullsnullrnull D can lead to repossession. becoming aware that the account is in arrears.
a nullere a partial repayment represents part of a q6 cnullrenull nullsnullrnull a q10 cnullrenull nullsnullrnull a
special deal mortgage, a proportional penalty may a A cash back can release funds to repay some of the a nullder nullnull null the lender must keep records of
apply. debt and as cashbacks do not increase the mortgage its dealings with borrowers who are in arrears or have
B null a partial repayment, the monthly payment can be debt they are clearly a very useful tool in these a shortfall debt. The record must be kept for one year
maintained, with the mortgage term shortened. circumstances. from when the borrower cleared the debt or arrears.
c null a partial repayment, the monthly payment can B A variable interest rate can leave individuals exposed B nullder nullnull null the lender must keep records of
be reduced, with the mortgage ending on the original to the impact of rising interest rates. its dealings with borrowers who are in arrears or have
contract date. c An interest only mortgage will require a supporting a shortfall debt. The record must be kept for one year
D nullnders can, and do, commonly set down a investment vehicle. The total monthly payments will from when the borrower cleared the debt or arrears.
minimum amount that can be accepted as a partial be higher than a repayment mortgage and there will c nullder nullnull null the lender must keep records of
repayment. be uncertainties as to whether the investment vehicle its dealings with borrowers who are in arrears or have
q3 cnullrenull nullsnullrnull B will repay the loan. a shortfall debt. The record must be kept for one year
a nullpayment of credit card debts is likely to be D The longer the term the greater the amount of from when the borrower cleared the debt or arrears.
positive for her personal credit rating as long as she interest will be paid to service the loan. nullher methods D nullder nullnull null the lender must keep records of
maintains mortgage payments. of minimising expenditure should be considered nullst. its dealings with borrowers who are in arrears or have
B nullilst credit card interest is high, the mortgage will q7 cnullrenull nullsnullrnull B a shortfall debt. The record must be kept for one year
last much longer, probably meaning that, overall, more a An early repayment charge could, not will, be from when the borrower cleared the debt or arrears.
interest will be paid. charged depending on the terms of the original nullr more help with revision, lessons and how
c There is no reason for the lender to impose punitive mortgage contract. to get your own nullnullcertinullate visit
interest rates on debt consolidation. B The low-cost endowment will have built-in life cover
www.mortgageintroducer.com
mortgage introducer march 2010
39
MI p38-39_0310.indd 3 23/02/2010 11:06
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