CeMAP - Certificate in Mortgage Advice and Practice Equity Release and Later Life Lending Flashcards
6 cards from real CEMAP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CeMAP - Certificate in Mortgage Advice and Practice Equity Release and Later Life Lending flashcards as text
What is equity release in the context of mortgage advice?
Answer: A product allowing older homeowners to access the equity tied up in their home without having to sell it
Equity release allows homeowners, typically aged 55 and over, to unlock cash from their property while continuing to live in it.
What are the two main types of equity release products available in the UK?
Answer: Lifetime mortgage and home reversion plan
The two principal equity release products are lifetime mortgages, where the home is used as security for a loan, and home reversion plans, where part or all of the property is sold to a provider.
How does a lifetime mortgage differ from a standard residential mortgage?
Answer: A lifetime mortgage is a loan secured against the home where no mandatory monthly repayments are required; the loan is repaid when the borrower dies or moves into long-term care
Unlike a standard mortgage, a lifetime mortgage does not require monthly repayments; the interest rolls up and the full balance is repaid from the property sale upon death or entry into care.
What is a home reversion plan?
Answer: A scheme where the homeowner sells part or all of their property to a provider in return for a lump sum or regular income, while retaining the right to live there
Under a home reversion plan, the homeowner transfers legal ownership of a share of the property to the provider but retains the right to live there rent-free for life.
What is the minimum age at which most equity release products become available?
Answer: 55
The minimum age for most equity release products, particularly lifetime mortgages, is 55, though some providers set a higher minimum.
Which body regulates equity release advice in the UK?
Answer: Both the Equity Release Council and the FCA
Equity release advice is regulated by the FCA, while the Equity Release Council sets voluntary product standards and consumer protections that reputable providers adopt.