CeMAP Applying Mortgage Advice Knowledge 2

Question 1

Under FCA rules, what is the maximum period for a mortgage illustration to remain valid after issue?

Accepted Answer

28 days

Answer

14 days

Answer

30 days

Answer

60 days

Question 2

A client has a joint mortgage but is going through a divorce. What is the adviser's primary obligation?

Accepted Answer

Ensure both parties receive independent legal advice

Answer

Advise the client to sell the property immediately

Answer

Transfer the mortgage to the higher earner

Answer

Recommend a remortgage to release equity

Question 3

What does the abbreviation TCF stand for in the context of UK mortgage regulation?

Accepted Answer

Treating Customers Fairly

Answer

Total Cost of Finance

Answer

Terms and Conditions Framework

Answer

Transaction Compliance Framework

Question 4

A borrower wants to port their existing mortgage to a new property. Which condition must typically be met?

Accepted Answer

The borrower must pass a new affordability assessment

Answer

The new property must be of equal or lesser value

Answer

The original mortgage must have been held for at least 5 years

Answer

Porting is only available on fixed-rate products

Question 5

What is the purpose of a Decision in Principle (DIP) in the mortgage process?

Accepted Answer

It provides an indication of how much the lender may be willing to lend

Answer

It legally commits the lender to providing a mortgage

Answer

It confirms the property valuation has been completed

Answer

It replaces the need for a full mortgage application

Question 6

Under MCOB rules, when must an adviser provide a suitability report?

Accepted Answer

Before the mortgage application is submitted

Answer

Only when the client requests one

Answer

After the mortgage offer has been issued

Answer

Only for buy-to-let mortgages