Practice Test GeeksCeMAP - Certificate in Mortgage Advice and Practice Practice Test
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Module I 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 Module I flashcards as text

  1. Under the Financial Services and Markets Act 2000, what is a 'regulated activity' in the context of mortgage advice?

    Answer: Advising on, arranging, or administering regulated mortgage contracts as specified in the RAO

    The FSMA 2000 and the Regulated Activities Order define specific activities including advising on, arranging, entering into, and administering regulated mortgage contracts.

  2. What is the role of the Monetary Policy Committee (MPC) and how do its decisions affect mortgage borrowers?

    Answer: The MPC sets the Bank of England base rate, which directly influences tracker mortgage rates and indirectly affects other mortgage products

    The MPC sets the Bank of England base rate, which directly determines tracker mortgage rates and influences the rates lenders offer on other products.

  3. What is the difference between a building society and a bank in terms of mortgage lending?

    Answer: Building societies are mutual organisations owned by members, with at least 75% of lending secured on residential property, while banks are shareholder-owned with no such restriction

    Building societies are mutually owned by their members and must lend at least 75% of their funds on residential property under the Building Societies Act 1986.

  4. What is the purpose of the Money Laundering Regulations 2017 in the mortgage process?

    Answer: To prevent criminals from laundering money through property transactions by requiring identity verification and source of funds checks

    The Money Laundering Regulations 2017 require firms to conduct customer due diligence, verify identity, and check the source of funds to prevent property being used for laundering criminal proceeds.

  5. What is the significance of the Consumer Duty (PS22/9) for mortgage firms?

    Answer: It requires firms to deliver good outcomes for retail customers across products, price, understanding, and support

    The Consumer Duty requires firms to act to deliver good outcomes for retail customers, focusing on four outcome areas: products, price and value, consumer understanding, and consumer support.

  6. How does the Financial Policy Committee (FPC) influence the mortgage market?

    Answer: The FPC uses macroprudential tools such as LTV limits, stress testing requirements, and affordability caps to manage systemic risks in the housing and mortgage markets

    The FPC uses macroprudential tools to address systemic risks in the financial system, including measures that directly affect mortgage lending standards.