QFA LOANS - SAMPLE PAPER 1
QUESTIONS WITH COMPLETE
SOLUTIONS
A nnlender nngenerally nncharges nna nnlower nninterest nnrate nnon nna nnhousing nnloan
nnbecause:
A nnthe nnloan nnis nnsecured nnagainst nnthe nnproperty.
B nnthey nnare nnrequired nnto nndo nnso nnby nnthe nnConsumer
Credit nnAct, nn1995.
C nnthe nnloan nnis nnunsecured.
D nnthey nnare nnrequired nnto nndo nnso nnby nnthe nnConsumer nnProtection nnCode. nn-
nnAnswerA
1.2 nn- nnIndividual nnLoan nnNeeds
Finn nnbuys nna nncar nnby nntaking nnout nna nnPersonal nnPayment nnPlan nn(PPP). nnWhen
nnwill nnFinn nnbe nnthe nnlegal nnowner nnof nnthe nncar?
A nnAs nnsoon nnas nnthe nncontract nnis nnsigned.
B nnAfter nnhe nnpays nnan nninitial nndeposit.
C nnWhen nnthe nnfinal nnpayment nnhas nnbeen nnmade.
D nnWhen nn50% nnof nnall nnpayments nnhave nnbeen nnmade. nn- nnAnswerC
1.2.1 nnDifferent nnforms nnof nnLoans
To nnwhich nnof nnthe nnfollowing nnconsumers nndo nnthe nnprovisions nnof nnthe nnConsumer
nnProtection nnCode, nn2012 nnNOT nnapply?
A nnJanet, nnwho nnhas nnborrowed nn€10,000 nnas nna nnpersonal nnloan nnfrom nnClear
nnBank.
B nnJennifer, nnwho nnhas nnengaged nnthe nnservices nnof nna nnDebt nnManagement nnfirm
nnto nnact nnon nnher nnbehalf nnwith nnher nncreditors.
C nnRoss, nnwho nnhas nntaken nnout nna nnlife nnassurance nnpolicy nnwith nnhis nnlocal
nnCredit nnUnion.
D nnJames, nnwho nnhas nnreceived nnfinance nnunder nna nnhire-purchase nnagreement. nn-
nnAnswerD
,1.6.2 nnConsumer nnProtection nnCode, nn2012
Mary nnreferred nna nncomplaint nnshe nnhad nnmade nnabout nnDelta nnBank nnto nnthe
nnFinancial nnServices nnand nnPensions nnOmbudsman nn(FSPO) nnas nnshe nnwas
nnunhappy nnwith nntheir nnfinal nnresponse. nnThe nnFSPO nnupheld nnMary's nncomplaint
nnand nnawarded nnher nncompensation nnof nn€50,000. nnDelta nnBank nnwish nnto nnappeal
nnthe nnFSPO's nndecision.
Within nnhow nnmany nndays nnof nnthe nnFSPO's nndecision nnmust nnDelta nnBank nnsubmit
nntheir nnappeal nnto nnthe nnHigh nnCourt?
A nn15 nndays
B nn20 nndays
C nn30 nndays
D nn35 nndays nn- nnAnswerD
1.5.3.1 nnFinancial nnServices nnand nnPensions nnComplaints nnProcess
Which nnof nnthe nnfollowing nnis nnnot nnan nnelement nnof nna nnvalid nncontract?
A nnConsideration
B nnAcceptance
C nnVerification
D nnCapacity nn- nnAnswerC
1.7.1 nnEssential nnElements nnof nna nnValid nnContract
Philip nnagrees nnto nnoffer nnWest nnBank nncollateral nnsecurity nnagainst nna nnhousing
nnloan. nnThis nnmost nnlikely nnmeans nnthat nnPhilip nnis nnproviding:
A nna nnthird nnparty, nnwho nnwill nnagree nnto nnmake nnthe nnloan nnrepayments nnif nnhe
nndefaults nnon nnhis nnloan.
B nna nnlegal nnmortgage nnover nnthe nnfreehold nnproperty.
C nna nnpersonal nncovenant nnto nnrepay nnthe nnloan.
D nnan nnassignment nnof nna nnhome nncontents nninsurance nnpolicy. nn- nnAnswerA
2.4 nn- nnSecurity nnfor nnHousing nnLoans
In nnthe nnearly nnyears nnof nna nnloan nnwhich nnis nnarranged nnon nna nncapital nnand
nninterest nnbasis, nnthe:
A nnlargest nnpart nnof nnthe nnmonthly nnpayment nnis nnused nnto nnpay nnthe nninterest
nncharge.
B nncapital nnportion nnreduces nnquickly.
C nninterest nnportion nnis nnsuspended.
D nnlargest nnpart nnof nnthe nnmonthly nnpayment nnis nnused nnto nnpay nnoff nnthe nncapital
nnsum nnborrowed. nn- nnAnswerA
2.10.1 nn- nnCapital nnand nninterest
, Rita nnholds nna nnvariable nnrate nnmortgage nnwith nnBeta nnBank. nnBeta nnBank nnmust
nnprovide nnRita nnwith nna nnnotification nnadvising nnher nnof nnany nnchange nnin nnthe
nninterest nnrate:
A nnas nnsoon nnas nnthe nnbank nnbecomes nnaware nnthat nnthey nnare nnchanging nnthe
nninterest nnrate.
B nnno nnlater nnthan nn10 nnbusiness nndays nnfollowing nna nnchange nnin nnthe nnECB nnrefi
nnrate.
C nnat nnleast nn20 nnbusiness nndays nnin nnadvance nnof nnany nninterest nnrate nnchange.
D nnat nnleast nn30 nndays nnin nnadvance nnof nnany nninterest nnrate nnchange. nn- nnAnswerD
2.12 nnHousing nnLoan nnInterest nnRates
What nnfactor(s) nndetermine nnhow nna nnmortgage nnlender nncalculates nntheir nnvariable
nnmortgage nninterest nnrates?
(i) nnCost nnof nnfunds.(ii) nnCompetition nnin nnthe nnmarket nnplace. nn(iii) nnProfit nnmargin.
A nn(i) nnonly.
B nn(i) nnand nn(ii) nnonly.
C nn(i) nnand nn(iii) nnonly.
D nn(i), nn(ii) nnand nn(iii) nn- nnAnswerD
2.11.1 nn- nnStandard nnVariable nnRate
Why nnmight nna nnfixed nnrate nnmortgage nnbe nnthe nnMOST nnsuitable nnmortgage nnfor
nna nnfirst nntime nnbuyer?
A nnLenders nnoffer nnhigher nnLoans nnto nnValue nn(LTV) nnfor nnfixed nnrate nnmortgages
nnthan nnfor nnvariable nnrate nnmortgages.
B nnFixed nnrate nnborrowers nnare nnnot nnusually nnrequired nnto nntake nnout nnmortgage
nnprotection nncover.
C nnThe nnborrower nncan nnget nna nnhigher nnrate nnof nnmortgage nninterest nntax nnrelief.
D nnThe nnrepayments nnare nnguaranteed nnnot nnto nnincrease nnduring nnthe nnfix nnperiod,
nnoffering nnthe nnborrower nnstability. nn- nnAnswerD
2.11.3 nn- nnFixed nnRate
Where nna nnlender nnintends nnto nncharge nna nnredemption nnfee, nnit nnis nnrequired nnto
nnprovide nnto nnthe nnborrower nnwith:
(i) nna nncopy nnof nnthe nnloan nnoffer.
(ii) nna nnworked nnexample nnof nnthe nnredemption nncharge nnspecific nnto nntheir
nncircumstances.
(iii) nndetails nnon nnhow nnthe nncharge nnis nncalculated.
A nn(i) nnonly.
B nn(i) nnand nn(ii) nnonly.
C nn(ii) nnand nn(iii) nnonly.
D nn(i), nn(ii) nnand nn(iii). nn- nnAnswerC
2.11.3 nn- nnFixed nnRate
QUESTIONS WITH COMPLETE
SOLUTIONS
A nnlender nngenerally nncharges nna nnlower nninterest nnrate nnon nna nnhousing nnloan
nnbecause:
A nnthe nnloan nnis nnsecured nnagainst nnthe nnproperty.
B nnthey nnare nnrequired nnto nndo nnso nnby nnthe nnConsumer
Credit nnAct, nn1995.
C nnthe nnloan nnis nnunsecured.
D nnthey nnare nnrequired nnto nndo nnso nnby nnthe nnConsumer nnProtection nnCode. nn-
nnAnswerA
1.2 nn- nnIndividual nnLoan nnNeeds
Finn nnbuys nna nncar nnby nntaking nnout nna nnPersonal nnPayment nnPlan nn(PPP). nnWhen
nnwill nnFinn nnbe nnthe nnlegal nnowner nnof nnthe nncar?
A nnAs nnsoon nnas nnthe nncontract nnis nnsigned.
B nnAfter nnhe nnpays nnan nninitial nndeposit.
C nnWhen nnthe nnfinal nnpayment nnhas nnbeen nnmade.
D nnWhen nn50% nnof nnall nnpayments nnhave nnbeen nnmade. nn- nnAnswerC
1.2.1 nnDifferent nnforms nnof nnLoans
To nnwhich nnof nnthe nnfollowing nnconsumers nndo nnthe nnprovisions nnof nnthe nnConsumer
nnProtection nnCode, nn2012 nnNOT nnapply?
A nnJanet, nnwho nnhas nnborrowed nn€10,000 nnas nna nnpersonal nnloan nnfrom nnClear
nnBank.
B nnJennifer, nnwho nnhas nnengaged nnthe nnservices nnof nna nnDebt nnManagement nnfirm
nnto nnact nnon nnher nnbehalf nnwith nnher nncreditors.
C nnRoss, nnwho nnhas nntaken nnout nna nnlife nnassurance nnpolicy nnwith nnhis nnlocal
nnCredit nnUnion.
D nnJames, nnwho nnhas nnreceived nnfinance nnunder nna nnhire-purchase nnagreement. nn-
nnAnswerD
,1.6.2 nnConsumer nnProtection nnCode, nn2012
Mary nnreferred nna nncomplaint nnshe nnhad nnmade nnabout nnDelta nnBank nnto nnthe
nnFinancial nnServices nnand nnPensions nnOmbudsman nn(FSPO) nnas nnshe nnwas
nnunhappy nnwith nntheir nnfinal nnresponse. nnThe nnFSPO nnupheld nnMary's nncomplaint
nnand nnawarded nnher nncompensation nnof nn€50,000. nnDelta nnBank nnwish nnto nnappeal
nnthe nnFSPO's nndecision.
Within nnhow nnmany nndays nnof nnthe nnFSPO's nndecision nnmust nnDelta nnBank nnsubmit
nntheir nnappeal nnto nnthe nnHigh nnCourt?
A nn15 nndays
B nn20 nndays
C nn30 nndays
D nn35 nndays nn- nnAnswerD
1.5.3.1 nnFinancial nnServices nnand nnPensions nnComplaints nnProcess
Which nnof nnthe nnfollowing nnis nnnot nnan nnelement nnof nna nnvalid nncontract?
A nnConsideration
B nnAcceptance
C nnVerification
D nnCapacity nn- nnAnswerC
1.7.1 nnEssential nnElements nnof nna nnValid nnContract
Philip nnagrees nnto nnoffer nnWest nnBank nncollateral nnsecurity nnagainst nna nnhousing
nnloan. nnThis nnmost nnlikely nnmeans nnthat nnPhilip nnis nnproviding:
A nna nnthird nnparty, nnwho nnwill nnagree nnto nnmake nnthe nnloan nnrepayments nnif nnhe
nndefaults nnon nnhis nnloan.
B nna nnlegal nnmortgage nnover nnthe nnfreehold nnproperty.
C nna nnpersonal nncovenant nnto nnrepay nnthe nnloan.
D nnan nnassignment nnof nna nnhome nncontents nninsurance nnpolicy. nn- nnAnswerA
2.4 nn- nnSecurity nnfor nnHousing nnLoans
In nnthe nnearly nnyears nnof nna nnloan nnwhich nnis nnarranged nnon nna nncapital nnand
nninterest nnbasis, nnthe:
A nnlargest nnpart nnof nnthe nnmonthly nnpayment nnis nnused nnto nnpay nnthe nninterest
nncharge.
B nncapital nnportion nnreduces nnquickly.
C nninterest nnportion nnis nnsuspended.
D nnlargest nnpart nnof nnthe nnmonthly nnpayment nnis nnused nnto nnpay nnoff nnthe nncapital
nnsum nnborrowed. nn- nnAnswerA
2.10.1 nn- nnCapital nnand nninterest
, Rita nnholds nna nnvariable nnrate nnmortgage nnwith nnBeta nnBank. nnBeta nnBank nnmust
nnprovide nnRita nnwith nna nnnotification nnadvising nnher nnof nnany nnchange nnin nnthe
nninterest nnrate:
A nnas nnsoon nnas nnthe nnbank nnbecomes nnaware nnthat nnthey nnare nnchanging nnthe
nninterest nnrate.
B nnno nnlater nnthan nn10 nnbusiness nndays nnfollowing nna nnchange nnin nnthe nnECB nnrefi
nnrate.
C nnat nnleast nn20 nnbusiness nndays nnin nnadvance nnof nnany nninterest nnrate nnchange.
D nnat nnleast nn30 nndays nnin nnadvance nnof nnany nninterest nnrate nnchange. nn- nnAnswerD
2.12 nnHousing nnLoan nnInterest nnRates
What nnfactor(s) nndetermine nnhow nna nnmortgage nnlender nncalculates nntheir nnvariable
nnmortgage nninterest nnrates?
(i) nnCost nnof nnfunds.(ii) nnCompetition nnin nnthe nnmarket nnplace. nn(iii) nnProfit nnmargin.
A nn(i) nnonly.
B nn(i) nnand nn(ii) nnonly.
C nn(i) nnand nn(iii) nnonly.
D nn(i), nn(ii) nnand nn(iii) nn- nnAnswerD
2.11.1 nn- nnStandard nnVariable nnRate
Why nnmight nna nnfixed nnrate nnmortgage nnbe nnthe nnMOST nnsuitable nnmortgage nnfor
nna nnfirst nntime nnbuyer?
A nnLenders nnoffer nnhigher nnLoans nnto nnValue nn(LTV) nnfor nnfixed nnrate nnmortgages
nnthan nnfor nnvariable nnrate nnmortgages.
B nnFixed nnrate nnborrowers nnare nnnot nnusually nnrequired nnto nntake nnout nnmortgage
nnprotection nncover.
C nnThe nnborrower nncan nnget nna nnhigher nnrate nnof nnmortgage nninterest nntax nnrelief.
D nnThe nnrepayments nnare nnguaranteed nnnot nnto nnincrease nnduring nnthe nnfix nnperiod,
nnoffering nnthe nnborrower nnstability. nn- nnAnswerD
2.11.3 nn- nnFixed nnRate
Where nna nnlender nnintends nnto nncharge nna nnredemption nnfee, nnit nnis nnrequired nnto
nnprovide nnto nnthe nnborrower nnwith:
(i) nna nncopy nnof nnthe nnloan nnoffer.
(ii) nna nnworked nnexample nnof nnthe nnredemption nncharge nnspecific nnto nntheir
nncircumstances.
(iii) nndetails nnon nnhow nnthe nncharge nnis nncalculated.
A nn(i) nnonly.
B nn(i) nnand nn(ii) nnonly.
C nn(ii) nnand nn(iii) nnonly.
D nn(i), nn(ii) nnand nn(iii). nn- nnAnswerC
2.11.3 nn- nnFixed nnRate
