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

A mortgage illustration (KFI/ESIS) remains valid for a minimum of 28 days, giving the customer adequate time to consider the offer.

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

The adviser must ensure both joint borrowers are treated fairly and recommend independent legal advice for both parties.

Question 3

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

Accepted Answer

Treating Customers Fairly

Answer

TCF stands for Treating Customers Fairly, one of the FCA's core principles for regulated firms.

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

Even when porting, lenders require a fresh affordability assessment under current criteria to ensure the borrower can still meet repayments.

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

A DIP gives an indication of lending willingness based on initial information, but is not a binding commitment.

CeMAP - Certificate in Mortgage Advice and Practice Practice Test