The Mortgage Application Process Flashcards
7 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 7 The Mortgage Application Process flashcards as text
A self-employed applicant applying for a mortgage would typically need to provide how many years of accounts or SA302s?
Answer: Two years
Most lenders require at least two years of accounts or HMRC SA302 tax calculation forms to assess a self-employed applicant's income.
What is 'portability' in the context of a mortgage product?
Answer: The ability to move the existing mortgage to a new property
Portability allows the borrower to transfer their existing mortgage deal to a new property, avoiding early repayment charges when moving home.
Which regulatory body directly supervises mortgage lenders and advisers in the UK?
Answer: The Financial Conduct Authority (FCA)
The FCA is responsible for the conduct regulation of mortgage lenders and advisers, including the rules set out in MCOB.
Under the Mortgage Credit Directive (MCD), what reflection period must lenders give borrowers after issuing a binding mortgage offer?
Answer: 7 days
The MCD requires lenders to give borrowers a minimum 7-day reflection period after issuing a binding mortgage offer before the borrower is required to accept.
What is the purpose of the Mortgage Credit Directive's 'European Standardised Information Sheet' (ESIS)?
Answer: To provide a standardised comparison document enabling borrowers to compare mortgage products across Europe
The ESIS is a standardised document that presents key mortgage information in a prescribed format to allow borrowers to compare products across different lenders and EU member states.
If a borrower wishes to repay their fixed-rate mortgage early, what charge may apply?
Answer: An Early Repayment Charge (ERC)
An Early Repayment Charge (ERC) is a penalty charged by lenders when borrowers repay or overpay beyond agreed limits during a fixed or discounted rate period.
Which of the following best describes 'adverse credit' in a mortgage context?
Answer: A borrower with a history of missed payments, CCJs, or bankruptcy
Adverse credit refers to a negative credit history including County Court Judgments, missed payments, defaults, or bankruptcy, which can restrict mortgage options.