QFA Loans - Sample Paper 2 Exam
Questions And Answers
A lifetime loan is where:
A a property is jointly owned by the lender and
borrower.
B the loan is repaid from the sale proceeds of the property.
C the borrower pays a notional rent for use of the property during their lifetime.
D a property is sold to the financial institution at a discounted value by a borrower in arrears. -
ANS B
1.2.1 - Different forms of loans
A hire purchase agreement is where a consumer:
A purchases goods now from a retailer with the aid of a loan provided by a finance company.
B agrees to hire goods from a finance company over a particular period by paying a monthly
fee, and must return the goods to the finance company at the end of the specified time.
C agrees to hire goods from a finance company over a particular period with the goods
transferring automatically to the consumer at the end of the period.
D agrees to hire goods from a finance company over a particular period with the option to
purchase at the end of the period. - ANS D
1.2.2 - Different forms of loan
The Financial Services and Pensions Ombudsman CANNOT in any circumstances investigate
complaints about a regulated financial services provider received from:
A an individual who has a complaint relating to a matter which occurred more than three years
ago.
B a limited company with a turnover under €3 million.
C an individual who has not gone through the internal complaints procedure of the financial
services provider.
D a charity, club or partnership. - ANS C
1.5.3 - Financial Services Ombudsman complaints process.
Under the Family Home Protection Act, 1976, whose interest is primarily protected?
A A non-owning spouse.
B The mortgage lender.
,C A registered property owner.
D The children of the registered property owner. - ANS A
1.6.5 - Family Home Protection Act,1976
John is offered a housing loan by Nore Bank whereby interest only is payable for the first three
years, after which John will have to make capital and interest payments.
John is at increased risk of negative equity during the first three years because:
A interest rates could rise during this period.
B interest rates could fall during this period.
C John's net income will fall at the end of this period.
D no capital is repaid during this period. - ANS D
2.10.2 - Interest only
Which of the following statements about Pension Mortgages are accurate?
(i) No payments are made to the pension policy throughout the term of the agreement.
(ii) Interest only repayments are made to the mortgage during the term of the agreement.
(iii) There is a risk that the value of the pension policy will not be sufficient to clear the
outstanding capital on the expiry date of the mortgage.
A (ii) only.
B (i) and (ii) only.
C (ii) and (iii) only.
D (i), (ii) and (iii). - ANS C
2.10.2 - Interest only
To be eligible for a Rebuilding Ireland Homeloan:
A it is sufficient for one party in a joint application to be a first-time buyer.
B an applicant must be in continuous employment for one year as the primary applicant.
C a self-employed applicant must submit two years certified accounts.
D a single appliacnt must earn a minimum of €75,000 per annum. - ANS C
2.3.6 - Rebuilding Ireland Home Loan
Which of the following factors will influence a lender's decision to change its variable mortgage
interest rate:
(i) EU inflation rate.
(ii) current wholesale money market rates and the cost of the lender's retail deposits.
(iii) lender's profit margin.
A (ii) only.
B (i) and (iii) only.
, C (ii) and (iii) only.
D (i), (ii) and (iii). - ANS C
2.11.1 - Standard Variable Rate (SVR)
In year three of the life of a housing loan, a mortgage lender can charge a fee on early
redemption on which one the following?
A A discounted variable rate mortgage where the discount was more than 0.75% per annum
below the standard variable for one year.
B A current variable rate loan which was previously subject to a one year fixed rate period.
C A variable rate mortgage which starts at 4.95% per annum, but where the rate cannot exceed
7% per annum for the first three years.
D A five year fixed rate of 3.9% per annum. - ANS D
2.11.3 - Fixed Rate
Properties sold at auction are sold:
A subject to loan approval.
B with a cooling off period of 30 days.
C unconditionally.
D subject to contract. - ANS C
2.9.2 Properties sold at auction
Which of the following is not typically one of the borrower's covenants that appears in a
mortgage deed?
A The property must be kept in good repair.
B The property can be let without consent.
C Any obligations imposed by local authorities must be complied with.
D The property must be kept insured as required by the lender. - ANS B
2.4.1.1 Borrowers Covenants
If interest on an annuity mortgage is said to be 'capitalised' this means the interest:
A is written off by the lender.
B has been repaid by the borrower in a cash
lump sum.
C is deducted from the loan outstanding.
D is added to the loan outstanding. - ANS D
2.13.2 - Compound Interest
Janice wants to ensure that her mortgage will be fully repaid at the end of the mortgage term
without having to pay an outstanding balance.
Questions And Answers
A lifetime loan is where:
A a property is jointly owned by the lender and
borrower.
B the loan is repaid from the sale proceeds of the property.
C the borrower pays a notional rent for use of the property during their lifetime.
D a property is sold to the financial institution at a discounted value by a borrower in arrears. -
ANS B
1.2.1 - Different forms of loans
A hire purchase agreement is where a consumer:
A purchases goods now from a retailer with the aid of a loan provided by a finance company.
B agrees to hire goods from a finance company over a particular period by paying a monthly
fee, and must return the goods to the finance company at the end of the specified time.
C agrees to hire goods from a finance company over a particular period with the goods
transferring automatically to the consumer at the end of the period.
D agrees to hire goods from a finance company over a particular period with the option to
purchase at the end of the period. - ANS D
1.2.2 - Different forms of loan
The Financial Services and Pensions Ombudsman CANNOT in any circumstances investigate
complaints about a regulated financial services provider received from:
A an individual who has a complaint relating to a matter which occurred more than three years
ago.
B a limited company with a turnover under €3 million.
C an individual who has not gone through the internal complaints procedure of the financial
services provider.
D a charity, club or partnership. - ANS C
1.5.3 - Financial Services Ombudsman complaints process.
Under the Family Home Protection Act, 1976, whose interest is primarily protected?
A A non-owning spouse.
B The mortgage lender.
,C A registered property owner.
D The children of the registered property owner. - ANS A
1.6.5 - Family Home Protection Act,1976
John is offered a housing loan by Nore Bank whereby interest only is payable for the first three
years, after which John will have to make capital and interest payments.
John is at increased risk of negative equity during the first three years because:
A interest rates could rise during this period.
B interest rates could fall during this period.
C John's net income will fall at the end of this period.
D no capital is repaid during this period. - ANS D
2.10.2 - Interest only
Which of the following statements about Pension Mortgages are accurate?
(i) No payments are made to the pension policy throughout the term of the agreement.
(ii) Interest only repayments are made to the mortgage during the term of the agreement.
(iii) There is a risk that the value of the pension policy will not be sufficient to clear the
outstanding capital on the expiry date of the mortgage.
A (ii) only.
B (i) and (ii) only.
C (ii) and (iii) only.
D (i), (ii) and (iii). - ANS C
2.10.2 - Interest only
To be eligible for a Rebuilding Ireland Homeloan:
A it is sufficient for one party in a joint application to be a first-time buyer.
B an applicant must be in continuous employment for one year as the primary applicant.
C a self-employed applicant must submit two years certified accounts.
D a single appliacnt must earn a minimum of €75,000 per annum. - ANS C
2.3.6 - Rebuilding Ireland Home Loan
Which of the following factors will influence a lender's decision to change its variable mortgage
interest rate:
(i) EU inflation rate.
(ii) current wholesale money market rates and the cost of the lender's retail deposits.
(iii) lender's profit margin.
A (ii) only.
B (i) and (iii) only.
, C (ii) and (iii) only.
D (i), (ii) and (iii). - ANS C
2.11.1 - Standard Variable Rate (SVR)
In year three of the life of a housing loan, a mortgage lender can charge a fee on early
redemption on which one the following?
A A discounted variable rate mortgage where the discount was more than 0.75% per annum
below the standard variable for one year.
B A current variable rate loan which was previously subject to a one year fixed rate period.
C A variable rate mortgage which starts at 4.95% per annum, but where the rate cannot exceed
7% per annum for the first three years.
D A five year fixed rate of 3.9% per annum. - ANS D
2.11.3 - Fixed Rate
Properties sold at auction are sold:
A subject to loan approval.
B with a cooling off period of 30 days.
C unconditionally.
D subject to contract. - ANS C
2.9.2 Properties sold at auction
Which of the following is not typically one of the borrower's covenants that appears in a
mortgage deed?
A The property must be kept in good repair.
B The property can be let without consent.
C Any obligations imposed by local authorities must be complied with.
D The property must be kept insured as required by the lender. - ANS B
2.4.1.1 Borrowers Covenants
If interest on an annuity mortgage is said to be 'capitalised' this means the interest:
A is written off by the lender.
B has been repaid by the borrower in a cash
lump sum.
C is deducted from the loan outstanding.
D is added to the loan outstanding. - ANS D
2.13.2 - Compound Interest
Janice wants to ensure that her mortgage will be fully repaid at the end of the mortgage term
without having to pay an outstanding balance.
