QFA Loans - Sample Paper 1 2
EXAM (2026/2027) QUESTIONS
AND CORRECT ANSWERS
Acvlendercvgenerallycvchargescvacvlowercvinterestcvratecvoncvacvhousingcvloancvbecause:
Acvthecvloancviscvsecuredcvagainstcvthecvproperty.
BcvtheycvarecvrequiredcvtocvdocvsocvbycvthecvConsumer
CreditcvAct,cv1995.
Ccvthecvloancviscvunsecured.
DcvtheycvarecvrequiredcvtocvdocvsocvbycvthecvConsumercvProtectioncvCode.cv-cvANSWERS-
A
1.2cv-cvIndividualcvLoancvNeeds
FinncvbuyscvacvcarcvbycvtakingcvoutcvacvPersonalcvPaymentcvPlancv(PPP).cvWhencvwillcvFinn
cvbecvthecvlegalcvownercvofcvthecvcar?
AcvAscvsooncvascvthecvcontractcviscvsigned.
BcvAftercvhecvpayscvancvinitialcvdeposit.
CcvWhencvthecvfinalcvpaymentcvhascvbeencvmade.
DcvWhencv50%cvofcvallcvpaymentscvhavecvbeencvmade.cv-cvANSWERS-C
1.2.1cvDifferentcvformscvofcvLoans
TocvwhichcvofcvthecvfollowingcvconsumerscvdocvthecvprovisionscvofcvthecvConsumercvProtec
tioncvCode,cv2012cvNOTcvapply?
AcvJanet,cvwhocvhascvborrowedcv€10,000cvascvacvpersonalcvloancvfromcvClearcvBank.
BcvJennifer,cvwhocvhascvengagedcvthecvservicescvofcvacvDebtcvManagementcvfirmcvtocvactcv
oncvhercvbehalfcvwithcvhercvcreditors.
CcvRoss,cvwhocvhascvtakencvoutcvacvlifecvassurancecvpolicycvwithcvhiscvlocalcvCreditcvUnion.
DcvJames,cvwhocvhascvreceivedcvfinancecvundercvacvhire-purchasecvagreement.cv-
cvANSWERS-D
1.6.2cvConsumercvProtectioncvCode,cv2012
MarycvreferredcvacvcomplaintcvshecvhadcvmadecvaboutcvDeltacvBankcvtocvthecvFinancialcvSe
rvicescvandcvPensionscvOmbudsmancv(FSPO)cvascvshecvwascvunhappycvwithcvtheircvfinalcv
response.cvThecvFSPOcvupheldcvMary'scvcomplaintcvandcvawardedcvhercvcompensationcv
ofcv€50,000.cvDeltacvBankcvwishcvtocvappealcvthecvFSPO'scvdecision.
WithincvhowcvmanycvdayscvofcvthecvFSPO'scvdecisioncvmustcvDeltacvBankcvsubmitcvtheircva
ppealcvtocvthecvHighcvCourt?
Acv15cvdays
Bcv20cvdays
Ccv30cvdays
Dcv35cvdayscv-cvANSWERS-D
,1.5.3.1cvFinancialcvServicescvandcvPensionscvComplaintscvProcess
Whichcvofcvthecvfollowingcviscvnotcvancvelementcvofcvacvvalidcvcontract?
AcvConsideration
BcvAcceptance
CcvVerification
DcvCapacitycv-cvANSWERS-C
1.7.1cvEssentialcvElementscvofcvacvValidcvContract
PhilipcvagreescvtocvoffercvWestcvBankcvcollateralcvsecuritycvagainstcvacvhousingcvloan.cvThi
scvmostcvlikelycvmeanscvthatcvPhilipcviscvproviding:
Acvacvthirdcvparty,cvwhocvwillcvagreecvtocvmakecvthecvloancvrepaymentscvifcvhecvdefaultscvoncv
hiscvloan.
Bcvacvlegalcvmortgagecvovercvthecvfreeholdcvproperty.
Ccvacvpersonalcvcovenantcvtocvrepaycvthecvloan.
Dcvancvassignmentcvofcvacvhomecvcontentscvinsurancecvpolicy.cv-cvANSWERS-A
2.4cv-cvSecuritycvforcvHousingcvLoans
Incvthecvearlycvyearscvofcvacvloancvwhichcviscvarrangedcvoncvacvcapitalcvandcvinterestcvbasis,cv
the:
Acvlargestcvpartcvofcvthecvmonthlycvpaymentcviscvusedcvtocvpaycvthecvinterestcvcharge.
Bcvcapitalcvportioncvreducescvquickly.
Ccvinterestcvportioncviscvsuspended.
Dcvlargestcvpartcvofcvthecvmonthlycvpaymentcviscvusedcvtocvpaycvoffcvthecvcapitalcvsumcvborro
wed.cv-cvANSWERS-A
2.10.1cv-cvCapitalcvandcvinterest
RitacvholdscvacvvariablecvratecvmortgagecvwithcvBetacvBank.cvBetacvBankcvmustcvprovidecvR
itacvwithcvacvnotificationcvadvisingcvhercvofcvanycvchangecvincvthecvinterestcvrate:
Acvascvsooncvascvthecvbankcvbecomescvawarecvthatcvtheycvarecvchangingcvthecvinterestcvrat
e.
Bcvnocvlatercvthancv10cvbusinesscvdayscvfollowingcvacvchangecvincvthecvECBcvreficvrate.
Ccvatcvleastcv20cvbusinesscvdayscvincvadvancecvofcvanycvinterestcvratecvchange.
Dcvatcvleastcv30cvdayscvincvadvancecvofcvanycvinterestcvratecvchange.cv-cvANSWERS-D
2.12cvHousingcvLoancvInterestcvRates
Whatcvfactor(s)cvdeterminecvhowcvacvmortgagecvlendercvcalculatescvtheircvvariablecvmortg
agecvinterestcvrates?
(i)cvCostcvofcvfunds.(ii)cvCompetitioncvincvthecvmarketcvplace.cv(iii)cvProfitcvmargin.
Acv(i)cvonly.
Bcv(i)cvandcv(ii)cvonly.
Ccv(i)cvandcv(iii)cvonly.
Dcv(i),cv(ii)cvandcv(iii)cv-cvANSWERS-D
2.11.1cv-cvStandardcvVariablecvRate
, WhycvmightcvacvfixedcvratecvmortgagecvbecvthecvMOSTcvsuitablecvmortgagecvforcvacvfirstcvti
mecvbuyer?
AcvLenderscvoffercvhighercvLoanscvtocvValuecv(LTV)cvforcvfixedcvratecvmortgagescvthancvforcv
variablecvratecvmortgages.
BcvFixedcvratecvborrowerscvarecvnotcvusuallycvrequiredcvtocvtakecvoutcvmortgagecvprotectio
ncvcover.
CcvThecvborrowercvcancvgetcvacvhighercvratecvofcvmortgagecvinterestcvtaxcvrelief.
DcvThecvrepaymentscvarecvguaranteedcvnotcvtocvincreasecvduringcvthecvfixcvperiod,cvofferin
gcvthecvborrowercvstability.cv-cvANSWERS-D
2.11.3cv-cvFixedcvRate
Wherecvacvlendercvintendscvtocvchargecvacvredemptioncvfee,cvitcviscvrequiredcvtocvprovidecvto
cvthecvborrowercvwith:
(i)cvacvcopycvofcvthecvloancvoffer.
(ii)cvacvworkedcvexamplecvofcvthecvredemptioncvchargecvspecificcvtocvtheircvcircumstances.
(iii)cvdetailscvoncvhowcvthecvchargecviscvcalculated.
Acv(i)cvonly.
Bcv(i)cvandcv(ii)cvonly.
Ccv(ii)cvandcv(iii)cvonly.
Dcv(i),cv(ii)cvandcv(iii).cv-cvANSWERS-C
2.11.3cv-cvFixedcvRate
Acvwayleavecvis:
Acvacvcovenantcvprohibitingcvacvbusinesscvtocvbecvcarriedcvoutcvwithincvacvpremises.
Bcvhuntingcvandcvfishingcvrightscvoncvthecvlandcvofcvanother.
Ccvacvrightcvofcvwaycvacrosscvlandcvtocvcarrycvincvgascvpipescvandcvlaycvcables.
Dcvacvrightcvofcvwaycvenjoyedcvbycvacvpropertycvownercvovercvthecvlandscvofcvanother.cv-
cvANSWERS-C
2.5.3cv-cvRightscvandcvInterestscvovercvLand
DavidcvandcvMargaretcvowncvancvinvestmentcvpropertycvoncvacv60:40cvbasiscvascvtenantscvi
ncvcommoncvandcvhavecvacvmortgagecvofcv€500,000cvoutstandingcvoncvthecvproperty.cvThe
ycvdocvnotcvhavecvanycvmortgagecvprotectioncvcover.
IfcvDavidcvdies,cvMargaretcviscvlegallycvliablecvfor:
Acvnonecvofcvthecvoutstandingcvmortgagecvascvthecvbankcvwillcvautomaticallycvwrite-
offcvthecvbalance.
Bcv40%cvofcvmortgagecvoutstanding.
Ccv60%cvofcvmortgagecvoutstanding.
Dcv100%cvofcvmortgagecvoutstanding.cv-cvANSWERS-D
2.7.3cv-cvTenantscvincvcommon
CompoundcvInterestcviscvwherecvinterestcvcharged:
Acviscvdeductedcvfromcvthecvoriginalcvloancvamountcvoncvancvannualcvbasis.
Bcvonlycvrelatescvtocvrepaymentscvoncvoutstandingcvarrears.
Ccviscvaddedcvtocvthecvloancvamountcvandcvfromcvthencvoncvthecvnewcvloancvamountcvequalsc
vthecvoriginalcvcapitalcvandcvthecvinterestcvcharge.
EXAM (2026/2027) QUESTIONS
AND CORRECT ANSWERS
Acvlendercvgenerallycvchargescvacvlowercvinterestcvratecvoncvacvhousingcvloancvbecause:
Acvthecvloancviscvsecuredcvagainstcvthecvproperty.
BcvtheycvarecvrequiredcvtocvdocvsocvbycvthecvConsumer
CreditcvAct,cv1995.
Ccvthecvloancviscvunsecured.
DcvtheycvarecvrequiredcvtocvdocvsocvbycvthecvConsumercvProtectioncvCode.cv-cvANSWERS-
A
1.2cv-cvIndividualcvLoancvNeeds
FinncvbuyscvacvcarcvbycvtakingcvoutcvacvPersonalcvPaymentcvPlancv(PPP).cvWhencvwillcvFinn
cvbecvthecvlegalcvownercvofcvthecvcar?
AcvAscvsooncvascvthecvcontractcviscvsigned.
BcvAftercvhecvpayscvancvinitialcvdeposit.
CcvWhencvthecvfinalcvpaymentcvhascvbeencvmade.
DcvWhencv50%cvofcvallcvpaymentscvhavecvbeencvmade.cv-cvANSWERS-C
1.2.1cvDifferentcvformscvofcvLoans
TocvwhichcvofcvthecvfollowingcvconsumerscvdocvthecvprovisionscvofcvthecvConsumercvProtec
tioncvCode,cv2012cvNOTcvapply?
AcvJanet,cvwhocvhascvborrowedcv€10,000cvascvacvpersonalcvloancvfromcvClearcvBank.
BcvJennifer,cvwhocvhascvengagedcvthecvservicescvofcvacvDebtcvManagementcvfirmcvtocvactcv
oncvhercvbehalfcvwithcvhercvcreditors.
CcvRoss,cvwhocvhascvtakencvoutcvacvlifecvassurancecvpolicycvwithcvhiscvlocalcvCreditcvUnion.
DcvJames,cvwhocvhascvreceivedcvfinancecvundercvacvhire-purchasecvagreement.cv-
cvANSWERS-D
1.6.2cvConsumercvProtectioncvCode,cv2012
MarycvreferredcvacvcomplaintcvshecvhadcvmadecvaboutcvDeltacvBankcvtocvthecvFinancialcvSe
rvicescvandcvPensionscvOmbudsmancv(FSPO)cvascvshecvwascvunhappycvwithcvtheircvfinalcv
response.cvThecvFSPOcvupheldcvMary'scvcomplaintcvandcvawardedcvhercvcompensationcv
ofcv€50,000.cvDeltacvBankcvwishcvtocvappealcvthecvFSPO'scvdecision.
WithincvhowcvmanycvdayscvofcvthecvFSPO'scvdecisioncvmustcvDeltacvBankcvsubmitcvtheircva
ppealcvtocvthecvHighcvCourt?
Acv15cvdays
Bcv20cvdays
Ccv30cvdays
Dcv35cvdayscv-cvANSWERS-D
,1.5.3.1cvFinancialcvServicescvandcvPensionscvComplaintscvProcess
Whichcvofcvthecvfollowingcviscvnotcvancvelementcvofcvacvvalidcvcontract?
AcvConsideration
BcvAcceptance
CcvVerification
DcvCapacitycv-cvANSWERS-C
1.7.1cvEssentialcvElementscvofcvacvValidcvContract
PhilipcvagreescvtocvoffercvWestcvBankcvcollateralcvsecuritycvagainstcvacvhousingcvloan.cvThi
scvmostcvlikelycvmeanscvthatcvPhilipcviscvproviding:
Acvacvthirdcvparty,cvwhocvwillcvagreecvtocvmakecvthecvloancvrepaymentscvifcvhecvdefaultscvoncv
hiscvloan.
Bcvacvlegalcvmortgagecvovercvthecvfreeholdcvproperty.
Ccvacvpersonalcvcovenantcvtocvrepaycvthecvloan.
Dcvancvassignmentcvofcvacvhomecvcontentscvinsurancecvpolicy.cv-cvANSWERS-A
2.4cv-cvSecuritycvforcvHousingcvLoans
Incvthecvearlycvyearscvofcvacvloancvwhichcviscvarrangedcvoncvacvcapitalcvandcvinterestcvbasis,cv
the:
Acvlargestcvpartcvofcvthecvmonthlycvpaymentcviscvusedcvtocvpaycvthecvinterestcvcharge.
Bcvcapitalcvportioncvreducescvquickly.
Ccvinterestcvportioncviscvsuspended.
Dcvlargestcvpartcvofcvthecvmonthlycvpaymentcviscvusedcvtocvpaycvoffcvthecvcapitalcvsumcvborro
wed.cv-cvANSWERS-A
2.10.1cv-cvCapitalcvandcvinterest
RitacvholdscvacvvariablecvratecvmortgagecvwithcvBetacvBank.cvBetacvBankcvmustcvprovidecvR
itacvwithcvacvnotificationcvadvisingcvhercvofcvanycvchangecvincvthecvinterestcvrate:
Acvascvsooncvascvthecvbankcvbecomescvawarecvthatcvtheycvarecvchangingcvthecvinterestcvrat
e.
Bcvnocvlatercvthancv10cvbusinesscvdayscvfollowingcvacvchangecvincvthecvECBcvreficvrate.
Ccvatcvleastcv20cvbusinesscvdayscvincvadvancecvofcvanycvinterestcvratecvchange.
Dcvatcvleastcv30cvdayscvincvadvancecvofcvanycvinterestcvratecvchange.cv-cvANSWERS-D
2.12cvHousingcvLoancvInterestcvRates
Whatcvfactor(s)cvdeterminecvhowcvacvmortgagecvlendercvcalculatescvtheircvvariablecvmortg
agecvinterestcvrates?
(i)cvCostcvofcvfunds.(ii)cvCompetitioncvincvthecvmarketcvplace.cv(iii)cvProfitcvmargin.
Acv(i)cvonly.
Bcv(i)cvandcv(ii)cvonly.
Ccv(i)cvandcv(iii)cvonly.
Dcv(i),cv(ii)cvandcv(iii)cv-cvANSWERS-D
2.11.1cv-cvStandardcvVariablecvRate
, WhycvmightcvacvfixedcvratecvmortgagecvbecvthecvMOSTcvsuitablecvmortgagecvforcvacvfirstcvti
mecvbuyer?
AcvLenderscvoffercvhighercvLoanscvtocvValuecv(LTV)cvforcvfixedcvratecvmortgagescvthancvforcv
variablecvratecvmortgages.
BcvFixedcvratecvborrowerscvarecvnotcvusuallycvrequiredcvtocvtakecvoutcvmortgagecvprotectio
ncvcover.
CcvThecvborrowercvcancvgetcvacvhighercvratecvofcvmortgagecvinterestcvtaxcvrelief.
DcvThecvrepaymentscvarecvguaranteedcvnotcvtocvincreasecvduringcvthecvfixcvperiod,cvofferin
gcvthecvborrowercvstability.cv-cvANSWERS-D
2.11.3cv-cvFixedcvRate
Wherecvacvlendercvintendscvtocvchargecvacvredemptioncvfee,cvitcviscvrequiredcvtocvprovidecvto
cvthecvborrowercvwith:
(i)cvacvcopycvofcvthecvloancvoffer.
(ii)cvacvworkedcvexamplecvofcvthecvredemptioncvchargecvspecificcvtocvtheircvcircumstances.
(iii)cvdetailscvoncvhowcvthecvchargecviscvcalculated.
Acv(i)cvonly.
Bcv(i)cvandcv(ii)cvonly.
Ccv(ii)cvandcv(iii)cvonly.
Dcv(i),cv(ii)cvandcv(iii).cv-cvANSWERS-C
2.11.3cv-cvFixedcvRate
Acvwayleavecvis:
Acvacvcovenantcvprohibitingcvacvbusinesscvtocvbecvcarriedcvoutcvwithincvacvpremises.
Bcvhuntingcvandcvfishingcvrightscvoncvthecvlandcvofcvanother.
Ccvacvrightcvofcvwaycvacrosscvlandcvtocvcarrycvincvgascvpipescvandcvlaycvcables.
Dcvacvrightcvofcvwaycvenjoyedcvbycvacvpropertycvownercvovercvthecvlandscvofcvanother.cv-
cvANSWERS-C
2.5.3cv-cvRightscvandcvInterestscvovercvLand
DavidcvandcvMargaretcvowncvancvinvestmentcvpropertycvoncvacv60:40cvbasiscvascvtenantscvi
ncvcommoncvandcvhavecvacvmortgagecvofcv€500,000cvoutstandingcvoncvthecvproperty.cvThe
ycvdocvnotcvhavecvanycvmortgagecvprotectioncvcover.
IfcvDavidcvdies,cvMargaretcviscvlegallycvliablecvfor:
Acvnonecvofcvthecvoutstandingcvmortgagecvascvthecvbankcvwillcvautomaticallycvwrite-
offcvthecvbalance.
Bcv40%cvofcvmortgagecvoutstanding.
Ccv60%cvofcvmortgagecvoutstanding.
Dcv100%cvofcvmortgagecvoutstanding.cv-cvANSWERS-D
2.7.3cv-cvTenantscvincvcommon
CompoundcvInterestcviscvwherecvinterestcvcharged:
Acviscvdeductedcvfromcvthecvoriginalcvloancvamountcvoncvancvannualcvbasis.
Bcvonlycvrelatescvtocvrepaymentscvoncvoutstandingcvarrears.
Ccviscvaddedcvtocvthecvloancvamountcvandcvfromcvthencvoncvthecvnewcvloancvamountcvequalsc
vthecvoriginalcvcapitalcvandcvthecvinterestcvcharge.