1 New variable rate borrowers will typically pay an interest rate of:
a) 2% below the SVR
b) 1% below the SVR
c) the SVR
d) 1% above the SVR
2 In England & Wales, which of the following groups normally handle the legal work?
a) Solicitors
b) Mortgage brokers
c) Travel agents
d) Estate agents
3 At what point is someone committed to buy a property sold at auction?
a) Only after it has been independently valued and they have paid a deposit.
b) Only after it has been surveyed and they have paid a deposit.
c) If theirs is the highest bid and exceeds any reserve set by the auctioneer.
d) From exchange of contracts after the survey has been completed.
4 Assuming that interest rates remain unchanged, what happens to the interest element of a capital and interest mortgage each year?
a) The interest element increases each year.
b) The interest element rises initially, then falls.
c) The interest element stays the same.
d) The interest element falls each year.
5 Bloggsville has one of the highest burglary rates in the country. Is that likely to affect contents insurance premiums for people who live in Bloggsville?
a) Yes, geographic location is a key price determinant.
b) No. Burglary rates do not affect contents insurance premiums.
c) Yes, but the rate will cover the whole county, not just Bloggsville.
d) No. It is illegal to discriminate against the victims of burglary in this way.
6 Peggy-Sue, a cautious investor, has a £100,000 variable rate mortgage at 6% interest. She also has £50,000 in a savings account, surplus to her needs.
How might she best reduce her monthly mortgage costs?
a) Use the interest on her savings towards her monthly mortgage payment.
b) Use part or all of her savings to repay part of her mortgage capital as the savings
are unlikely to earn her 6% a year net of taxes and charges and with no risk.
c) Remortgage and use part or all of her savings to reduce her mortgage capital.
d) Invest the savings into equities and take capital gains to pay off part of her mortgage.
7 In what area might a non-financial services employer also be a mortgage lender?
a) Offering fixed rate mortgages for 25 years
b) Offering the same mortgages as a building society
c) For specialist loans e.g. self-certified
d) For bridging finance on relocations or for directors’ homes
8 What is the normal limit after a firm’s final response for a customer to take a complaint to the FOS?
a) six weeks
b) six months
c) six years
d) 28 days
Answers
1 b) New borrowers will almost always pay less than the full rate (typically 1% below the SVR)
2 a) Solicitors usually complete the legal work.
3 c) Making a bid commits the buyer if that bid is accepted
4 d) The interest element falls as the outstanding capital falls
5 a) Contents insurance covers theft, and insurers may apply different ratings on a postcode basis.
6 b) This makes best sense, provided that she will not need to access these savings. The equity investment option is high risk and not to be recommended.
7 d) Most employers are not mortgage lenders. Bridging finance may be arranged and some firms also jointly buy property with senior directors.
8 b) Or six years after the event complained about, or three years after the complainant became aware that they had a cause of complaint, if earlier.
