QFA LOANS - SAMPLE PAPER 1
QUESTIONS WITH CORRECT ANSWERS
A wlender wgenerally wcharges wa wlower winterest wrate won wa whousing wloan wbecause:
A wthe wloan wis wsecured wagainst wthe wproperty.
B wthey ware wrequired wto wdo wso wby wthe wConsumer
Credit wAct, w1995.
C wthe wloan wis wunsecured.
D wthey ware wrequired wto wdo wso wby wthe wConsumer wProtection wCode. w- w✔✔A
1.2 w- wIndividual wLoan wNeeds
Finn wbuys wa wcar wby wtaking wout wa wPersonal wPayment wPlan w(PPP). wWhen wwill
wFinn wbe wthe wlegal wowner wof wthe wcar?
A wAs wsoon was wthe wcontract wis wsigned.
B wAfter whe wpays wan winitial wdeposit.
C wWhen wthe wfinal wpayment whas wbeen wmade.
D wWhen w50% wof wall wpayments whave wbeen wmade. w- w✔✔C
1.2.1 wDifferent wforms wof wLoans
To wwhich wof wthe wfollowing wconsumers wdo wthe wprovisions wof wthe wConsumer
wProtection wCode, w2012 wNOT wapply?
A wJanet, wwho whas wborrowed w€10,000 was wa wpersonal wloan wfrom wClear wBank.
B wJennifer, wwho whas wengaged wthe wservices wof wa wDebt wManagement wfirm wto wact
won wher wbehalf wwith wher wcreditors.
C wRoss, wwho whas wtaken wout wa wlife wassurance wpolicy wwith whis wlocal wCredit
wUnion.
D wJames, wwho whas wreceived wfinance wunder wa whire-purchase wagreement. w- w✔✔D
1.6.2 wConsumer wProtection wCode, w2012
Mary wreferred wa wcomplaint wshe whad wmade wabout wDelta wBank wto wthe wFinancial
wServices wand wPensions wOmbudsman w(FSPO) was wshe wwas wunhappy wwith wtheir
wfinal wresponse. wThe wFSPO wupheld wMary's wcomplaint wand wawarded wher
wcompensation wof w€50,000. wDelta wBank wwish wto wappeal wthe wFSPO's wdecision.
Within whow wmany wdays wof wthe wFSPO's wdecision wmust wDelta wBank wsubmit wtheir
wappeal wto wthe wHigh wCourt?
A w15 wdays
,B w20 wdays
C w30 wdays
D w35 wdays w- w✔✔D
1.5.3.1 wFinancial wServices wand wPensions wComplaints wProcess
Which wof wthe wfollowing wis wnot wan welement wof wa wvalid wcontract?
A wConsideration
B wAcceptance
C wVerification
D wCapacity w- w✔✔C
1.7.1 wEssential wElements wof wa wValid wContract
Philip wagrees wto woffer wWest wBank wcollateral wsecurity wagainst wa whousing wloan.
wThis wmost wlikely wmeans wthat wPhilip wis wproviding:
A wa wthird wparty, wwho wwill wagree wto wmake wthe wloan wrepayments wif whe wdefaults
won whis wloan.
B wa wlegal wmortgage wover wthe wfreehold wproperty.
C wa wpersonal wcovenant wto wrepay wthe wloan.
D wan wassignment wof wa whome wcontents winsurance wpolicy. w- w✔✔A
2.4 w- wSecurity wfor wHousing wLoans
In wthe wearly wyears wof wa wloan wwhich wis warranged won wa wcapital wand winterest
wbasis, wthe:
A wlargest wpart wof wthe wmonthly wpayment wis wused wto wpay wthe winterest wcharge.
B wcapital wportion wreduces wquickly.
C winterest wportion wis wsuspended.
D wlargest wpart wof wthe wmonthly wpayment wis wused wto wpay woff wthe wcapital wsum
wborrowed. w- w✔✔A
2.10.1 w- wCapital wand winterest
Rita wholds wa wvariable wrate wmortgage wwith wBeta wBank. wBeta wBank wmust wprovide
wRita wwith wa wnotification wadvising wher wof wany wchange win wthe winterest wrate:
A was wsoon was wthe wbank wbecomes waware wthat wthey ware wchanging wthe winterest
wrate.
B wno wlater wthan w10 wbusiness wdays wfollowing wa wchange win wthe wECB wrefi wrate.
C wat wleast w20 wbusiness wdays win wadvance wof wany winterest wrate wchange.
D wat wleast w30 wdays win wadvance wof wany winterest wrate wchange. w- w✔✔D
2.12 wHousing wLoan wInterest wRates
What wfactor(s) wdetermine whow wa wmortgage wlender wcalculates wtheir wvariable
wmortgage winterest wrates?
, (i) wCost wof wfunds.(ii) wCompetition win wthe wmarket wplace. w(iii) wProfit wmargin.
A w(i) wonly.
B w(i) wand w(ii) wonly.
C w(i) wand w(iii) wonly.
D w(i), w(ii) wand w(iii) w- w✔✔D
2.11.1 w- wStandard wVariable wRate
Why wmight wa wfixed wrate wmortgage wbe wthe wMOST wsuitable wmortgage wfor wa wfirst
wtime wbuyer?
A wLenders woffer whigher wLoans wto wValue w(LTV) wfor wfixed wrate wmortgages wthan
wfor wvariable wrate wmortgages.
B wFixed wrate wborrowers ware wnot wusually wrequired wto wtake wout wmortgage
wprotection wcover.
C wThe wborrower wcan wget wa whigher wrate wof wmortgage winterest wtax wrelief.
D wThe wrepayments ware wguaranteed wnot wto wincrease wduring wthe wfix wperiod,
woffering wthe wborrower wstability. w- w✔✔D
2.11.3 w- wFixed wRate
Where wa wlender wintends wto wcharge wa wredemption wfee, wit wis wrequired wto wprovide
wto wthe wborrower wwith:
(i) wa wcopy wof wthe wloan woffer.
(ii) wa wworked wexample wof wthe wredemption wcharge wspecific wto wtheir
wcircumstances.
(iii) wdetails won whow wthe wcharge wis wcalculated.
A w(i) wonly.
B w(i) wand w(ii) wonly.
C w(ii) wand w(iii) wonly.
D w(i), w(ii) wand w(iii). w- w✔✔C
2.11.3 w- wFixed wRate
A wwayleave wis:
A wa wcovenant wprohibiting wa wbusiness wto wbe wcarried wout wwithin wa wpremises.
B whunting wand wfishing wrights won wthe wland wof wanother.
C wa wright wof wway wacross wland wto wcarry win wgas wpipes wand wlay wcables.
D wa wright wof wway wenjoyed wby wa wproperty wowner wover wthe wlands wof wanother. w-
w✔✔C
2.5.3 w- wRights wand wInterests wover wLand
David wand wMargaret wown wan winvestment wproperty won wa w60:40 wbasis was wtenants
win wcommon wand whave wa wmortgage wof w€500,000 woutstanding won wthe wproperty.
wThey wdo wnot whave wany wmortgage wprotection wcover.
If wDavid wdies, wMargaret wis wlegally wliable wfor:
QUESTIONS WITH CORRECT ANSWERS
A wlender wgenerally wcharges wa wlower winterest wrate won wa whousing wloan wbecause:
A wthe wloan wis wsecured wagainst wthe wproperty.
B wthey ware wrequired wto wdo wso wby wthe wConsumer
Credit wAct, w1995.
C wthe wloan wis wunsecured.
D wthey ware wrequired wto wdo wso wby wthe wConsumer wProtection wCode. w- w✔✔A
1.2 w- wIndividual wLoan wNeeds
Finn wbuys wa wcar wby wtaking wout wa wPersonal wPayment wPlan w(PPP). wWhen wwill
wFinn wbe wthe wlegal wowner wof wthe wcar?
A wAs wsoon was wthe wcontract wis wsigned.
B wAfter whe wpays wan winitial wdeposit.
C wWhen wthe wfinal wpayment whas wbeen wmade.
D wWhen w50% wof wall wpayments whave wbeen wmade. w- w✔✔C
1.2.1 wDifferent wforms wof wLoans
To wwhich wof wthe wfollowing wconsumers wdo wthe wprovisions wof wthe wConsumer
wProtection wCode, w2012 wNOT wapply?
A wJanet, wwho whas wborrowed w€10,000 was wa wpersonal wloan wfrom wClear wBank.
B wJennifer, wwho whas wengaged wthe wservices wof wa wDebt wManagement wfirm wto wact
won wher wbehalf wwith wher wcreditors.
C wRoss, wwho whas wtaken wout wa wlife wassurance wpolicy wwith whis wlocal wCredit
wUnion.
D wJames, wwho whas wreceived wfinance wunder wa whire-purchase wagreement. w- w✔✔D
1.6.2 wConsumer wProtection wCode, w2012
Mary wreferred wa wcomplaint wshe whad wmade wabout wDelta wBank wto wthe wFinancial
wServices wand wPensions wOmbudsman w(FSPO) was wshe wwas wunhappy wwith wtheir
wfinal wresponse. wThe wFSPO wupheld wMary's wcomplaint wand wawarded wher
wcompensation wof w€50,000. wDelta wBank wwish wto wappeal wthe wFSPO's wdecision.
Within whow wmany wdays wof wthe wFSPO's wdecision wmust wDelta wBank wsubmit wtheir
wappeal wto wthe wHigh wCourt?
A w15 wdays
,B w20 wdays
C w30 wdays
D w35 wdays w- w✔✔D
1.5.3.1 wFinancial wServices wand wPensions wComplaints wProcess
Which wof wthe wfollowing wis wnot wan welement wof wa wvalid wcontract?
A wConsideration
B wAcceptance
C wVerification
D wCapacity w- w✔✔C
1.7.1 wEssential wElements wof wa wValid wContract
Philip wagrees wto woffer wWest wBank wcollateral wsecurity wagainst wa whousing wloan.
wThis wmost wlikely wmeans wthat wPhilip wis wproviding:
A wa wthird wparty, wwho wwill wagree wto wmake wthe wloan wrepayments wif whe wdefaults
won whis wloan.
B wa wlegal wmortgage wover wthe wfreehold wproperty.
C wa wpersonal wcovenant wto wrepay wthe wloan.
D wan wassignment wof wa whome wcontents winsurance wpolicy. w- w✔✔A
2.4 w- wSecurity wfor wHousing wLoans
In wthe wearly wyears wof wa wloan wwhich wis warranged won wa wcapital wand winterest
wbasis, wthe:
A wlargest wpart wof wthe wmonthly wpayment wis wused wto wpay wthe winterest wcharge.
B wcapital wportion wreduces wquickly.
C winterest wportion wis wsuspended.
D wlargest wpart wof wthe wmonthly wpayment wis wused wto wpay woff wthe wcapital wsum
wborrowed. w- w✔✔A
2.10.1 w- wCapital wand winterest
Rita wholds wa wvariable wrate wmortgage wwith wBeta wBank. wBeta wBank wmust wprovide
wRita wwith wa wnotification wadvising wher wof wany wchange win wthe winterest wrate:
A was wsoon was wthe wbank wbecomes waware wthat wthey ware wchanging wthe winterest
wrate.
B wno wlater wthan w10 wbusiness wdays wfollowing wa wchange win wthe wECB wrefi wrate.
C wat wleast w20 wbusiness wdays win wadvance wof wany winterest wrate wchange.
D wat wleast w30 wdays win wadvance wof wany winterest wrate wchange. w- w✔✔D
2.12 wHousing wLoan wInterest wRates
What wfactor(s) wdetermine whow wa wmortgage wlender wcalculates wtheir wvariable
wmortgage winterest wrates?
, (i) wCost wof wfunds.(ii) wCompetition win wthe wmarket wplace. w(iii) wProfit wmargin.
A w(i) wonly.
B w(i) wand w(ii) wonly.
C w(i) wand w(iii) wonly.
D w(i), w(ii) wand w(iii) w- w✔✔D
2.11.1 w- wStandard wVariable wRate
Why wmight wa wfixed wrate wmortgage wbe wthe wMOST wsuitable wmortgage wfor wa wfirst
wtime wbuyer?
A wLenders woffer whigher wLoans wto wValue w(LTV) wfor wfixed wrate wmortgages wthan
wfor wvariable wrate wmortgages.
B wFixed wrate wborrowers ware wnot wusually wrequired wto wtake wout wmortgage
wprotection wcover.
C wThe wborrower wcan wget wa whigher wrate wof wmortgage winterest wtax wrelief.
D wThe wrepayments ware wguaranteed wnot wto wincrease wduring wthe wfix wperiod,
woffering wthe wborrower wstability. w- w✔✔D
2.11.3 w- wFixed wRate
Where wa wlender wintends wto wcharge wa wredemption wfee, wit wis wrequired wto wprovide
wto wthe wborrower wwith:
(i) wa wcopy wof wthe wloan woffer.
(ii) wa wworked wexample wof wthe wredemption wcharge wspecific wto wtheir
wcircumstances.
(iii) wdetails won whow wthe wcharge wis wcalculated.
A w(i) wonly.
B w(i) wand w(ii) wonly.
C w(ii) wand w(iii) wonly.
D w(i), w(ii) wand w(iii). w- w✔✔C
2.11.3 w- wFixed wRate
A wwayleave wis:
A wa wcovenant wprohibiting wa wbusiness wto wbe wcarried wout wwithin wa wpremises.
B whunting wand wfishing wrights won wthe wland wof wanother.
C wa wright wof wway wacross wland wto wcarry win wgas wpipes wand wlay wcables.
D wa wright wof wway wenjoyed wby wa wproperty wowner wover wthe wlands wof wanother. w-
w✔✔C
2.5.3 w- wRights wand wInterests wover wLand
David wand wMargaret wown wan winvestment wproperty won wa w60:40 wbasis was wtenants
win wcommon wand whave wa wmortgage wof w€500,000 woutstanding won wthe wproperty.
wThey wdo wnot whave wany wmortgage wprotection wcover.
If wDavid wdies, wMargaret wis wlegally wliable wfor:
