QFA Loans Exam Buddy - LIA
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QFA Loans Exam Buddy
INSTITIÚID TEICNEOLAÍOCHTA, SLIGEACH
INSTITUTE OF TECHNOLOGY, SLIGO
Faculty of Business & Social Sciences
Head of Faculty: Dr. Michael Barrett
Academic Year: 2020/2021
QFA Loans
Sample Paper 1
Programme Name: Certificate in Professional Financial Advice
Certificate in Credit Union Operations
Instructions to Students
Time Allowed: 2 hours
THE EXAM PAPER MUST BE HANDED UP AT THE END OF THE EXAM WITH THE MCQ ANSWER SHEET
1. To be awarded a pass grade in this exam, you must achieve a mark of 40% or above.
2. 120 minutes are allowed for this paper which consists of 100 Multiple Choice Questions (MCQ).
3. Write your membership number in the box provided on the MCQ answer sheet and complete the number grid indicated according
to the instructions listed.
4. There is only one correct answer to each question.
5. Read the instructions on the MCQ answer sheet carefully.
Use the MCQ answer sheet provided to record your answers. Answers recorded on this exam paper will not be marked
Use the pencil provided to complete the MCQ answer sheet
Insert your name, membership number and exam ID at the top of the MCQ answer sheet and shade in the grids as indicated
Each question carries 3 marks for a correct answer, -1 (minus one) for an incorrect answer and 0 for no answer (don’t
know).
6. Handle the MCQ answer sheet with care and do not write notes or any marks on it, except for recording your answers to the
questions.
7. Mobile phones, electronic devices, books, papers or other aids must NOT be in your possession at any time during the exam.
Calculators may be used provided they are silent, non-programmable and incapable of storing text.
8. Hand this exam paper and the MCQ answer sheet to the invigilator at the end of the exam.
FAILURE TO HAND IN THE EXAM PAPER AND THE MCQ ANSWER SHEET MAY PRECLUDE THE
CORRECTION OF YOUR EXAM.
By signing this exam paper, you declare that you have read, understood and agree to be bound by the Examination
Regulations of The Institute of Technology, Sligo. The Regulations are available online at www.LIA.ie
Membership Number:
First Name:
Surname:
Exam Centre:
Signature: Date:
Sample Paper 1QFA Loans
Sample Paper 1
Instructions for entering your answers on the Multiple Choice Question (MCQ) Answer Sheet
The MCQ Answer Sheet will be read by a machine and so these instructions must be read and followed
carefully.
Please do NOT mark any part of the answer sheet with ticks or lines.
Fill in the boxes fully, as shown in the diagram below (Assume A is the answer in this case).
Fill in ONE box only per question as there is only ONE right answer.
If you do not know the answer to a question, and do not want to select A, B, C, or D, you must shade in circle E.
Do NOT leave any row blank.
If you select the correct option, you will score 3.
If you select an incorrect option, you will score -1 (minus 1).
If you select option E, you will score 0 (zero).
INCORRECT CORRECT
A B C D E A B C D E
NOTE: Use the separate MCQ Answer Sheet to record your answers. Do NOT record your answers on this
Examination Paper.
Page 2 of 27 Sample Paper 1QFA Loans
Sample Paper 1
1 Finn buys a car by taking out a Personal 2 A lender generally charges a lower interest
Contract Plan (PCP). When will Finn be the rate on a housing loan because:
legal owner of the car?
A the loan is secured against the property.
A As soon as the contract is signed.
B they are required to do so by the Consumer
B After he pays an initial deposit. Credit Act, 1995.
C When the final payment has been made. C the loan is unsecured.
D When 50% of all payments have been D they are required to do so by the Consumer
made. Protection Code.
E I don’t know. E I don’t know.
3 The Financial Services and Pensions 4 To which of the following consumers do the
Ombudsman CANNOT in any provisions of the Consumer Protection
circumstances investigate complaints about Code, 2012 NOT apply?
a regulated financial services provider
received from: A Janet, who has borrowed €10,000 as a
personal loan from Clear Bank.
A an individual who has a complaint relating
to a matter which occurred more than three B Jennifer, who has engaged the services of a
years ago. Debt Management firm to act on her behalf
with her creditors.
B a limited company with a turnover under €3
million. C Ross, who has taken out a life assurance
policy with his local Credit Union.
C an individual who has not gone through the
internal complaints procedure of the D James, who has received finance under a
financial services provider. hire-purchase agreement.
D a charity, club or partnership. E I don’t know.
E I don’t know.
Page 3 of 27 Sample Paper 1QFA Loans
Sample Paper 1
5 Which of the following is not an element of a 6 Which of the following types of organisation
valid contract? are credit institutions?
(i) Banks.
A Consideration
(ii) Mortgage intermediaries.
B Acceptance
(iii) Debt Management Firms.
C Verification
D Capacity A (i) only.
E I don’t know. B (iii) only.
C (i) and (ii) only.
D (i), (ii) and (iii).
E I don’t know.
7 Under the Consumer Protection (Regulation 8 To be eligible for a Rebuilding Ireland
of Credit Servicing Firms) Act 2015, which Homeloan:
of the following are functions of Credit
Servicing Firms? A it is sufficient for one party in a joint
(i) Notifying relevant borrowers of changes application to be a first-time buyer.
in interest rates. B an applicant must be in continuous
(ii) Taking necessary steps for the purposes employment for one year as the primary
of collecting or recovering arrears due. applicant.
(iii) Managing and administering complaints. C a self-employed applicant must submit two
years’ certified accounts.
A (i) only. D a single applicant must earn a minimum of
B (ii) only. €75,000 per annum.
C (i) and (ii) only. E I don’t know.
D (i), (ii) and (iii).
E I don’t know.
Page 4 of 27 Sample Paper 1QFA Loans
Sample Paper 1
9 A borrower offers a guarantor to a lender as 10 The legal charge confers on the lender the
additional security for a mortgage. This is right to:
referred to as what type of security?
(i) Demand immediate repayment of the
loan from the borrower.
A Prime.
(ii) Take possession and exercise power of
B Collateral.
sale.
C Fixed.
(iii) Appoint a receiver to collect rents.
D Legal.
A (i) only.
E I don’t know.
B (i) and (iii) only.
C (ii) and (iii) only.
D (i), (ii) and (iii)
E I don’t know..
11 A mortgage deed is a document which sets 12 John has agreed to be a guarantor for
out: Peter’s loan with Erne Bank. Erne Bank
(i) an automatic right for the lender to evict change the terms of the credit agreement.
a borrower at any time. Under the Consumer Protection Code,
2012 Erne Bank are required to notify the
(ii) a description of the property mortgaged. changes to:
(iii) the details of the borrower.
A Peter only.
A (i) only. B John only.
B (i) and (iii) only. C Peter and John.
C (ii) and (iii) only. D John but only after receiving consent from
D (i), (ii) and (iii). Peter for each communication.
E I don’t know. E I don’t know.
Page 5 of 27 Sample Paper 1QFA Loans
Sample Paper 1
13 Where two or more people borrow from a 14 Peter, single, failed to make a valid will
lender, their liability to the lender, is before he died. He has no surviving
described as: relatives. He leaves an estate valued at
€200,000. Who will benefit from this estate?
A tenants in common.
A His closest living neighbour.
B single and joint.
B His bank.
C collective liability.
C It is distributed amongst a number of
D joint and several.
charities.
E I don’t know.
D The State.
E I don’t know.
15 Patricia has a freehold interest in a 16 A wayleave is:
property. This means that she:
(i) owns the land on which the property A a covenant prohibiting a business to be
stands. carried out within a premises.
(ii) has free use of the land for a specified B hunting and fishing rights on the land of
period. another.
(iii) has a lease on the property, but not the C a right of way across land to carry in gas
land, for a specified period. pipes and lay cables.
D a right of way enjoyed by a property owner
A (i) only. over the lands of another.
B (ii) only. E I don’t know.
C (i) and (ii) only.
D (ii) and (iii) only.
E I don’t know.
Page 6 of 27 Sample Paper 1QFA Loans
Sample Paper 1
17 Which one of the following organisations 18 Joe and Maria have arranged the
manages the system which records the ownership of their property under joint
transfer of ownership in property related tenancy. As joint tenants, if Joe dies:
transactions?
A Maria takes over full ownership of the
A Property Registration Authority. property.
B Department of Housing, Planning and Local B Joe's share of the property goes to his
Government. estate.
C Local Authorities. C Maria then owns 50% of their home.
D Department of the Environment. D Joe's share of the property transfers to his
parents.
E I don’t know.
E I don’t know.
19 Joe and Maria were married at the time of 20 Properties sold at auction are sold:
Joe's death. In accordance with the
Succession Act 1965, Maria: A subject to loan approval.
A is automatically entitled to the entire B with a cooling off period of 30 days.
proceeds of Joe's estate regardless of the C unconditionally.
provisions of Joe's will.
D subject to contract.
B has no legal right share over Joe's estate.
E I don’t know.
C is legally only entitled to the share of Joe's
estate left to her by Joe in his will.
D has an automatic right to a share in Joe's
estate regardless of the provisions of his
will.
E I don’t know.
Page 7 of 27 Sample Paper 1QFA Loans
Sample Paper 1
21 Janice wants to ensure that her mortgage 22 Which of the following statements about
will be fully repaid at the end of the Pension Mortgages are accurate?
mortgage term without having to pay an
(i) No payments are made to the pension
outstanding balance.
policy throughout the term of the
Which of the following is the most suitable agreement.
mortgage type for her?
(ii) Interest only repayments are made to
the mortgage during the term of the
A Endowment Mortgage.
agreement.
B Interest Only Mortgage.
(iii) There is a risk that the value of the
C Annuity Mortgage. pension policy will not be sufficient to clear
the outstanding capital on the expiry date of
D Pension Mortgage. the mortgage.
E I don’t know.
A (ii) only.
B (i) and (ii) only.
C (ii) and (iii) only.
D (i), (ii) and (iii).
E I don’t know.
23 What factor(s) determine how a mortgage 24 Why might a fixed rate mortgage be the
lender calculates their variable mortgage MOST suitable mortgage for a first time
interest rates? buyer?
(i) Cost of funds.
A Lenders offer higher Loans to Value (LTV)
(ii) Competition in the marketplace. for fixed rate mortgages than for variable
(iii) Profit margin. rate mortgages.
B Fixed rate borrowers are not usually
A (i) only. required to take out mortgage protection
B (i) and (ii) only. cover.
C (i) and (iii) only. C The borrower can get a higher rate of
mortgage interest tax relief.
D (i), (ii) and (iii).
D The repayments are guaranteed not to
E I don’t know. increase during the fix period, offering the
borrower stability.
E I don’t know.
Page 8 of 27 Sample Paper 1QFA Loans
Sample Paper 1
25 Rita holds a variable rate mortgage with 26 If interest on an annuity mortgage is said to
Beta Bank. Beta Bank must provide Rita be 'capitalised' this means the interest:
with a notification advising her of any
change in the interest rate: A is written off by the lender.
B has been repaid by the borrower in a cash
A as soon as the bank becomes aware that
lump sum.
they are changing the interest rate.
C is deducted from the loan outstanding.
B no later than 10 business days following a
change in the ECB refi rate. D is added to the loan outstanding.
C at least 20 business days in advance of any E I don’t know.
interest rate change.
D at least 30 days in advance of any interest
rate change.
E I don’t know.
27 John, single, purchased his first home in 28 Philip, who is single and a non-first-time
January 2015. In 2020, his interest buyer, took out a loan of €200,000 in
payments for the year on his loan will be January 2012 to purchase an investment
€12,000. property. This year, he will pay €12,500 in
How much mortgage interest relief, if any, interest on the loan.
can John claim? How much of this interest, if any, is
allowable for mortgage interest relief?
A Nil.
B €3,000 A Nil.
C €6,000 B €3,000
D €10,000 C €10,000
E I don’t know. D €12,500
E I don’t know.
Page 9 of 27 Sample Paper 1QFA Loans
Sample Paper 1
29 Alex is a non-first time buyer who 30 Tax relief on allowable mortgage interest is
purchased his home to live in, back in provided to the borrower as:
January 2006. In 2020, he will receive
mortgage interest relief at WHAT A a direct monthly payment from Revenue.
percentage?
B an increased tax credit.
A Nil. C an increased standard rate tax band.
B 15% D a reduction in loan repayments.
C 25% E I don’t know.
D 30%
E I don’t know.
31 In relation to inheritance tax, which of the 32 In July 2020, Mary died and left an
following statements is MOST accurate? inheritance of €1m to her son, Bill, in her
will. Assuming he has not previously
A When an inheritance tax liability arises received a gift or inheritance from any
following the death of an individual, the full source, Bill's inheritance tax liability will be:
benefit received is taxed.
B Only a deceased's spouse is liable to pay A Nil.
inheritance tax. B €219,450
C When an inheritance tax liability arises on C €330,000
the death of an individual, the benefit is
taxed if it is over a certain threshold and D €680,000
inherited by an individual other than the E I don’t know.
deceased's spouse or civil partner.
D When an inheritance tax liability arises, it is
the responsibility of the deceased's estate
to pay the tax.
E I don’t know.
Page 10 of 27 Sample Paper 1QFA Loans
Sample Paper 1
33 Which of the following incentives does the 34 Who administers the Local Property Tax?
government funded Help to Buy Scheme
provide to eligible first-time buyers? A Revenue.
B Property Registration Authority.
A Refund of any Capital Gains Tax paid.
C Land Registry.
B Unlimited threshold for Capital Acquisitions
Tax. D Banks.
C Refund of Income Tax and DIRT. E I don’t know.
D Refund of Stamp Duty.
E I don’t know.
35 Rent a room relief is available to: 36 John, who has a number of residential
(i) owner occupiers. investment properties, receives total rental
income of €60,000. In 2020, John also pays
(ii) a parent renting to their child. loan interest of €60,000 on all his
(iii) an employee renting to their employer. investment property loans.
On how much of this rental income will
A (i) only. John be taxed?
B (iii) only.
A Nil.
C (i) and (ii) only.
B €15,000
D (i), (ii) and (iii).
C €40,000
E I don’t know.
D €60,000
E I don’t know.
Page 11 of 27 Sample Paper 1QFA Loans
Sample Paper 1
37 For the purposes of Capital Gains Tax, a 38 Michael obtained a mortgage of €200,000
chargeable gain is the: to purchase a residential investment
property in 2020. How much of the interest
A allowable deduction on a chargeable item. on this loan can be offset against rental
income?
B difference between the purchase price and
the sale price (less allowable costs) arising
A Nil.
from the sale of an asset.
B 75%
C incidental expenditure arising for the sale of
an asset. C 85%
D difference between the expenditure D 100%
incurred when selling an asset and
E I don’t know.
purchasing a new asset.
E I don’t know.
39 Which of the following factors does a lender 40 Which of the following factors need to be
look at when assessing the MAXIMUM loan considered when comparing competing
it is prepared to offer an individual loans, in order to recommend an
borrower? appropriate housing loan?
(i) Profit the loan will generate. (i) Affordability.
(ii) Borrower's loan to income limit. (ii) Flexibility.
(iii) Loan to Value ratio. (iii) Investment risks.
A (i) and (ii) only. A (i) and (ii) only.
B (i) and (iii) only. B (i) and (iii) only.
C (ii) and (iii) only. C (ii) and (iii) only.
D (i), (ii) and (iii). D (i), (ii) and (iii).
E I don’t know. E I don’t know.
Page 12 of 27 Sample Paper 1QFA Loans
Sample Paper 1
41 Doireann's housing loan was approved by 42 Housing loan lenders cannot NORMALLY
Beta Bank. Following the drawdown of the lend more than 90% of the value of a
loan it was discovered that Beta Bank had property to first time buyers, because:
not completed a creditworthiness
(i) they will be in breach of money
assessment correctly on Doireann. Beta
laundering regulations.
Bank:
(ii) the lender has limited resources.
A must ensure that Doireann repays the
(iii) they are limited from doing so by the
money advanced to her within 30 days.
Central Bank of Ireland.
B must ensure that the creditworthiness
assessment is carried out again and A (i) only.
marked on her file.
B (iii) only.
C cannot cancel the credit agreement as it
C (ii) and (iii) only.
was issued on the basis that the
creditworthiness assessment was D (i), (ii) and (iii).
incorrectly conducted.
E I don’t know.
D should cancel the existing credit agreement
immediately and reissue it following the
completion of a new creditworthiness
assessment.
E I don’t know.
43 Ruth's mortgage lender will stress test her 44 John applies to two different mortgage
housing loan repayments to determine if lenders for a housing loan, providing each
she could make the repayments if: with the same information. He is offered a
(i) she lost her job. maximum loan of €175,000 by Anchor Bank
and €215,000 by Fender Bank. The banks
(ii) the lender was taken over by another have offered different maximum loan
lender. amounts to John because they differ in
(iii) mortgage interest rates increase from relation to:
their current levels. (i) how much, if any, of John's annual
bonus they are willing to take into account
A (i) only. as regular income.
B (iii) only. (ii) the mortgage rate they propose to
C (i) and (iii) only. charge John.
D (i), (ii) and (iii). (iii) the maximum net income ratio they are
prepared to take into account.
E I don’t know.
A (iii) only.
B (i) and (iii) only.
C (ii) and (iii) only.
D (i), (ii), and (iii).
E I don’t know.
Page 13 of 27 Sample Paper 1QFA Loans
Sample Paper 1
45 Edward has been offered a housing loan 46 Under the Consumer Protection Code,
with a discounted variable rate of 3.2% for 2012, if a lender intends to impose a
6 months. At the end of the discounted charge in respect of arranging a loan to a
period the rate charged will be the standard consumer, when must the lender inform the
variable rate which is currently 3.6%. individual of any such charge?
Under the Consumer Protection Code,
A A lender is not allowed impose a charge for
when assessing Edward's ability to repay,
arranging a loan.
the lender is required to stress test his
future affordability of the loan at what rate? B Prior to the consumer signing the loan
application form.
A 3.6%
C When the loan is approved.
B 4.6%
D It must be highlighted in the loan offer.
C 5.2%
E I don’t know.
D 5.6%
E I don’t know.
47 In describing a housing loan, the term 48 The PRIMARY use of the APRC in relation
'nominal rate' refers to: to housing loans is to:
A the APRC. A hide additional costs associated with the
B any fees and charges applied to the loan. loan.
C the gross level of repayment per €1,000 B illustrate the benefit of mortgage interest
borrowed. tax relief.
D the interest rate excluding all compulsory C enable the borrower to work out the
charges and the frequency at which interest monthly repayments on the loan.
is charged. D enable a borrower to compare the relative
E I don’t know. cost of different competing loans.
E I don’t know.
Page 14 of 27 Sample Paper 1QFA Loans
Sample Paper 1
49 Alex is borrowing €250,000 from Barrow 50 The Consumer Credit Act states that any
Bank. The bank's standard variable interest insurance which a mortgage lender may
rate is 3.9%, which they advertise will be require a borrower to take out and keep on
€6.67 per thousand borrowed on a capital a property:
and interest mortgage.
A may be effected by the borrower with any
Calculate Alex's likely monthly mortgage
insurer and through any intermediary.
repayment.
B must be effected by the borrower with an
A €812.50 insurer agreed by the mortgage lender.
B €975 C must be effected by the mortgage lender on
behalf of the borrower with any insurer and
C €1461.77
through any intermediary.
D €1667.50
D may only be effected by the borrower with
E I don’t know. tied agents of the mortgage intermediary.
E I don’t know.
51 If a group mortgage protection policy is said 52 Nore Bank arranges their group mortgage
NOT to be interest rate sensitive, this protection policies with Shannon Insurance
means that borrowers: Company. Mary joins Nore Bank's scheme
when taking out her mortgage with the
A pay the same mortgage protection bank. Who legally owns Mary's group
premium, regardless of their mortgage size mortgage protection cover?
and term.
B are covered for their initial mortgage A Nore Bank.
amount over the full term of their mortgage. B Mary.
C will have to pay higher mortgage protection C Nore Bank and Shannon Insurance
premiums in the future, if mortgage interest Company.
rates increase from their current levels.
D Nore Bank, Shannon Insurance Company
D are covered for the principal outstanding on and Mary.
their mortgage at death, regardless of
changes in mortgage interest rates. E I don’t know.
E I don’t know.
Page 15 of 27 Sample Paper 1QFA Loans
Sample Paper 1
53 Margaret's home loan application with 54 Household Insurance covers WHICH of the
Barrow Bank is approved subject to following risk(s)?
suitable life cover. The disadvantage of
(i) Legal liability.
Margaret arranging her own life insurance
policy is that: (ii) Serious illness.
A (iii) Home loan arrears.
the policy will have to be formally assigned
to the lender and separate payments will
A (i) only.
need to be made.
B B (ii) only.
she owns the policy.
C C (iii) only.
if she pays off the loan early, the policy is
released to her rather than the lender. D (i), (ii), and (iii).
D she is limited in the optional benefits she E I don’t know.
can choose.
E I don’t know.
55 Ruth has arranged her own household 56 Buildings insurance cover does NOT cover
insurance in relation to her housing loan as damage caused by:
required by Grand Bank. Grand Bank's
interest is noted on the insurance policy. (i) acts of terrorism.
If Ruth makes a claim on the insurance for (ii) wear and tear in the structure of the
flood damage, to whom will the settlement building.
cheque be made payable? (iii) wear and tear in the interior of the
building.
A Ruth only.
B Grand Bank only. A (i) only.
C Ruth and Grand Bank. B (i) and (ii) only.
D The contractor with whom Ruth has C (ii) and (iii) only.
arranged to repair the flood damage. D (i), (ii) and (iii).
E I don’t know. E I don’t know.
Page 16 of 27 Sample Paper 1QFA Loans
Sample Paper 1
57 To avoid an insurer checking the validity or 58 In relation to a claim on a household
adequacy of the sum insured every time insurance policy, loss adjusters are:
they take on a new property insurance risk,
(i) appointed by the insurers when claims
the insurance company will limit their own
are large or complex.
liability by applying a condition to the policy
known as: (ii) required to act in the best interests of
the insured not the insurer.
A reinstatement condition.
(iii) required to take an impartial view.
B indemnity risk.
A (i) only.
C contingency factor.
B (i) and (ii) only.
D average clause.
C (i) and (iii) only.
E I don’t know.
D (i), (ii) and (iii).
E I don’t know.
59 If an individual wishes to set up as a 60 Who of the following MUST be authorised
mortgage intermediary in Ireland, they must as a mortgage intermediary?
be authorised by the:
(i) Shell Insurance Services Ltd, who only
A National Consumer Agency. arranges life cover for housing loan
borrowers, in return for a fee.
B Financial Services Ombudsman.
(ii) Care Property Advisers Ltd, who only
C Central Bank of Ireland. arrange mortgages for clients to buy
D Banking and Payments Federation Ireland. commercial premises.
E I don’t know. (iii) James, who introduces clients to a
mortgage intermediary for the purpose of
obtaining a housing loan, in return for a fee.
A (i) only.
B (iii) only.
C (i) and (iii) only.
D (ii) and (iii) only.
E I don’t know.
Page 17 of 27 Sample Paper 1QFA Loans
Sample Paper 1
61 According to the European Union 62 Tony works as a tied mortgage branch
Consumer Mortgage Credit Agreements, agent for Alpha Bank. If Tony omits a
2016, if an individual wishes to provide relevant piece of information on a mortgage
advisory services they must be authorised application he completed for a client, who is
as: legally responsible for this omission?
A an investment intermediary. A Alpha Bank.
B a mortgage intermediary. B Tony's sole responsibility.
C a mortgage credit intermediary. C Alpha Bank and Tony jointly.
D a credit intermediary. D It is solely the client’s responsibility.
E I don’t know. E I don’t know.
63 Under the Consumer Protection Code, the 64 In the event that a lender cancels an
term independent may only be used by an agency appointment with a mortgage credit
intermediary in its legal name, trading name intermediary the lender must:
or any other description of the firm where:
(i) The principal regulated activities of the A inform all affected consumers immediately.
intermediary are provided on the basis of a B notify the Central Bank.
fair analysis of the market.
C notify all affected consumers and the
(ii) The intermediary allows the consumer Central Bank within five days.
the option to pay in full for its services by
means of a fee. D replace the agency appointment
immediately by giving another agency
(iii) The intermediary only charges trail appointment to an alternative mortgage
commissions. credit intermediary.
A (i) only. E I don’t know.
B (i) and (ii) only.
C (i) and (ii) and (iii).
D (i) and (iii) only.
E I don’t know.
Page 18 of 27 Sample Paper 1QFA Loans
Sample Paper 1
65 A lender is allowed to make an unsolicited 66 When a mortgage credit intermediary is
telephone call to a potential customer if: providing a terms of business to a new
consumer, the document MUST include:
A they wish to offer the client a protection
(i) the regulatory status of the mortgage
policy.
credit intermediary.
B they wish to offer the client a housing loan.
(ii) a general statement of charges imposed
C the individual is listed in the residential directly for its services.
telephone book.
(iii) the agent's VAT number.
D the potential customer is related to an
existing customer. A (i) only.
E I don’t know. B (i) and (ii) only.
C (i) and (iii) only.
D (i), (ii) and (iii).
E I don’t know.
67 During an interview for a mortgage, Helen 68 Sandra, a self-employed first-time buyer, is
refuses to provide information sought by applying to Barrow Bank for a housing loan.
Marley Mortgage Brokers in compliance Which of the following documentation is
with the Consumer Protection Code. she likely to be asked to provide to Barrow
What action MUST Marley Mortgage Bank?
Brokers now take?
A Projected income for the next three years.
A Inform Helen that they do not have the B P60.
relevant information necessary to assess
suitability for a product and they cannot C The last three years' audited accounts.
offer a service to her. D An up-to-date mortgage statement.
B Refer the matter to senior management of E I don’t know.
Marley Mortgage Brokers.
C Obtain a waiver letter from Helen waiving
her rights under the Code.
D Note the refusal on file, report the matter to
the Money Laundering Officer, and proceed
with the mortgage application.
E I don’t know.
Page 19 of 27 Sample Paper 1QFA Loans
Sample Paper 1
69 Paul, an employee of Righttech Ltd. has 70 Under Central Bank requirements if a
applied to Mort Bank for a housing loan. valuation of a property was carried out 5
Which of the following documents is he months prior to the drawdown of a housing
most likely to be asked to provide to the loan:
Bank to support his loan application?
A The loan agreement is null and void.
A His tax clearance certificate.
B The lender can impose a non-drawdown
B Memorandum of Association. fee on the borrower.
C His latest P60 or an Employment Detail C A new valuation of the property will be
Summary from the Revenue. required.
D 6 months business accounts statements. D There is no consequence as the Central
Bank's requirements require that a
E I don’t know.
valuation of a property need only take place
within 6 months of drawdown of the a
housing loan.
E I don’t know.
71 Under the Consumer Protection Code, 72 Under the Consumer Protection Code,
when recommending a financial product to 2012, linking services is prohibited. The
a consumer, a Reason Why Statement term linking services refers to:
MUST be provided by:
(i) home reversion firms. A a lender offering a loan to a borrower, on
condition that the borrower uses some
(ii) mortgage lenders. other financial service of the lender.
(iii) retail credit firms. B a mortgage intermediary acting solely for
one mortgage lender and not providing any
A (i) only. other service.
B (ii) only. C a mortgage broker offering the borrower the
C (i) and (ii) only. option of taking other financial services,
separate from the housing loan.
D (i), (ii) and (iii).
D a mortgage intermediary acting solely for
E I don’t know. one mortgage lender and only offering the
services of that lender.
E I don’t know.
Page 20 of 27 Sample Paper 1QFA Loans
Sample Paper 1
73 A mortgage loan offer pack must contain 74 Title documents refer to:
information on which of the following?
A the documents used to record the transfer
(i) Details of the effect on the monthly
of a property from one person to another.
repayment of a 1% increase in interest
rates in the first year. B the loan offer issued by a lender to a
borrower.
(ii) Impact of the interest rate stress test.
C the document which allows the borrower to
(iii) European Standardised Information
repay their loan to the lender at any given
Sheet (ESIS).
time, subject to the lender’s approval.
A (ii) only. D the solicitor's declaration that the title of the
property contains the first legal charge in
B (i) and (ii) only.
favour of the lender.
C (ii) and (iii) only.
E I don’t know.
D (i), (ii) and (iii).
E I don’t know.
75 The Irish Credit Bureau typically holds a 76 A Credit Information Provider (CIP) in
borrower's payment history and profile relation to the Central Credit Register
going back over WHAT repayment period? means:
A 6 months. (i) NAMA.
B 12 months. (ii) a local authority.
C 18 months. (iii) a pawnbroker.
D 24 months. A (ii) only.
E I don’t know. B (i) and (ii) only.
C (ii) and (iii) only.
D (i), (ii) and (iii).
E I don’t know.
Page 21 of 27 Sample Paper 1QFA Loans
Sample Paper 1
77 According to the Consumer Protection 78 A debt consolidation housing loan can
Code, 2012 in relation to potential switching result in higher total repayments over the
savings, if a lender provides an indicative term compared to that on a short-term loan
comparison on the total interest payable on because:
the consumer's existing mortgage and the
interest payable on the new mortgage, the A previous short-term loan repayments are
lender must: now made over a longer term.
B housing loans usually carry a higher
A allow the consumer a maximum of five days
interest rate than short term unsecured
to consider the amounts before withdrawing
borrowings.
the offer.
C less tax relief can be claimed.
B provide the consumer with a link to all its
competitor's websites. D the overall APRC will be higher.
C include the cost of updated mortgage E I don’t know.
protection when showing potential savings.
D include a link to the relevant section of the
Competition and Consumer Protection's
website.
E I don’t know.
79 Some years ago, Alice bought her 80 Rebecca takes out a lifetime mortgage of
apartment for €275,000, and borrowed €100,000 at an interest rate of 5.5%. She
€250,000. The mortgage outstanding on pays no interest or capital repayments on
her apartment today is €225,000. this loan. How many years would it take for
The apartment now has a market value of the loan outstanding to double?
€175,000. Calculate Alice's negative equity.
A 5 years.
A €25,000 B 7 years.
B €50,000 C 10 years.
C €75,000 D 13 years.
D €90,000 E I don’t know.
E I don’t know.
Page 22 of 27 Sample Paper 1QFA Loans
Sample Paper 1
81 Sarah has a mortgage on an investment 82 The Code of Conduct on Mortgage Arrears
property which is in arrears. Her case will offers protection to:
need to be dealt with having regard to
(i) owner occupiers who are in arrears.
(i) The Consumer Protection Code, 2012.
(ii) property owners of any residential
(ii) The Code of Conduct on Mortgage property.
Arrears, 2013.
(iii) owner occupiers, whilst not yet
(iii) The Mortgage Arrears Resolution experiencing financial difficulty, are in
Process. danger of going into arrears.
A (i) only. A (i) only.
B (i) and (ii) only. B (ii) only.
C (i) and (iii) only. C (i) and (iii) only.
D (i), (ii) and (iii) D (i), (ii) and (iii).
E I don’t know. E I don’t know.
83 The Code of Conduct on Mortgage Arrears, 84 Niall and Glenda were unable to afford their
2013, requires a regulated entity to mortgage payments because Glenda was
establish an ASU. The MOST accurate made redundant. They have moved in with
description of an ASU is a: Niall's parents and have let out their
property in order to generate income to
A Regulated entity’s centralised support unit meet mortgage payments.
which manages loans in mortgage arrears.
With regard to protection offered by the
B standard document used to assess a Code of Conduct on Mortgage Arrears
borrower's understanding of their arrears (CCMA), which ONE of the following
situation. statements is true?
C legal process used to repossess a
mortgaged property which is in arrears. A In these circumstances, Niall and Glenda
are entitled to the protection offered by the
D single unit measurement for calculating CCMA.
mortgage interest.
B Their house is now classed as an
E I don’t know. investment property, so they lose the
protection offered by the CCMA.
C The protection offered by the CCMA is now
only available for any arrears accumulated
prior to them vacating the property.
D Niall and Glenda are only entitled to the
protection offered by the CCMA if they had
never lived in the property before renting it
out.
E I don’t know.
Page 23 of 27 Sample Paper 1QFA Loans
Sample Paper 1
85 A borrower would be deemed to be not co- 86 Anna has been classified by Barrow Bank
operating if they: as a not co-operating borrower. The MOST
likely reason for this is because Anna has:
(i) refuse to engage with the regulated
entity.
A failed to meet her mortgage repayment this
(ii) fail to make an honest disclosure of their month and is now 31 days in arrears.
financial situation.
B refused the alternative repayment
(iii) refuse to accept an alternative arrangement offered by Barrow Bank.
repayment arrangement.
C not provided information, relevant to her
arrears situation, within the timeline
A (i) only.
specified by Barrow Bank.
B (iii) only.
D been in arrears for 12 months and is only
C (i) and (ii) only. making the minimum loan repayment.
agreed.
D (i), (ii) and (iii).
E I don’t know.
E I don’t know.
87 A MARP booklet outlines: 88 The Code of Conduct on Mortgage Arrears
requires that a regulated entity records all
A details of a regulated entity’s mortgage telephone calls made to or from a borrower
arrears resolution procedures. when the:
B details of the Money and Advice Bureau
only. A borrower makes contact with someone in
the branch network.
C details of the title of a property.
B borrower is not co-operating.
D details of a loan offer.
C contact is made to or from the Arrears
E I don’t know. Support Unit (ASU).
D borrower advises that they are in a pre-
arrears situation.
E I don’t know.
Page 24 of 27 Sample Paper 1QFA Loans
Sample Paper 1
89 Suir Bank wants to make an unsolicited 90 Which of the following is a possible
personal visit to James, as all other resolution offered by a lender when
attempts at contact in relation to his arrears addressing mortgage arrears under the
have failed. How many business days' MARP?
notice in writing must Suir Bank give to
James? A Debt Settlement Arrangement.
B Bankruptcy.
A 5
C Moratorium.
B 7
D Debt Relief Notice.
C 14
E I don’t know.
D 31
E I don’t know.
91 Claire has engaged the services of DMA 92 Which of the following must be authorised
Ltd, a debt management company. DMA and regulated by the Insolvency Service of
have issued a statement of advice to Claire, Ireland?
and must now allow her:
A Mortgage Intermediaries.
A three business days to consider the
statement. B Tied Mortgage Branch Agents.
B five business days to consider the C Debt Management Firms.
statement. D Personal Insolvency Practitioners.
C 10 business days to consider the E I don’t know.
statement.
D 20 business days to consider the
statement.
E I don’t know.
Page 25 of 27 Sample Paper 1QFA Loans
Sample Paper 1
93 Which of the following is NOT one of the 94 A Debt Relief Notice will cease to have
non-judicial debt resolutions processes effect and the debtor will be removed from
under the Personal Insolvency Act, 2012. the register and all of the remaining debts
will be discharged immediately when:
A Debt relief notice.
A the debtor makes repayments totalling 50%
B Debt write-down arrangement.
of the original debt within 12 months of the
C Personal insolvency arrangement. notice coming into effect.
D Debt settlement arrangement. B the debtor makes repayments totalling 80%
of the original debt at any stage of the
E I don’t know.
process.
C the debtor makes repayments totalling 60%
of the original debt at any stage of the
process.
D the debtor makes repayments totalling 50%
of the original debt at any stage of the
process.
E I don’t know.
95 Borrowers may be deemed ineligible for the 96 After what period of time is an individual
insolvency process if they have not: automatically discharged from bankruptcy
after the order of adjudication?
A kept their mortgage repayments up-to-date.
B cooperated with their regulated entity in the A 1 year.
MARP process for at least six months. B 3 years.
C provided information which explains why C 5 Years.
they believe they may be about to go into
arrears. D 12 Years.
D made contact with their regulated entity in E I don’t know.
the last three months.
E I don’t know.
Page 26 of 27 Sample Paper 1QFA Loans
Sample Paper 1
97 A credit sale agreement is where: 98 James enters into a hire purchase
agreement. This means:
(i) the consumer buys goods now with the
aid of a loan from a finance company. (i) he hires goods for a period of time.
(ii) the consumer owns the goods from day (ii) he owns the goods from day one.
one.
(iii) ownership of the goods automatically
(iii) the consumer must make a large lump pass to him at the end of the hire period.
sum payment at the end of the term.
A (i) only.
A (i) only.
B (ii) only.
B (ii) only.
C (i) and (iii) only.
C (i) and (ii) only.
D (i), (ii) and (iii).
D (i), (ii) and (iii).
E I don’t know.
E I don’t know.
99 Which of the following agreements is NOT 100 Janice has a loan of €3,000 on a variable
subject to certain provisions under the interest rate from Sofas-R-Us. Janice
Consumer Protection Code, 2012? decides to repay her outstanding
obligations early under this credit
A Mary, who enters into a hire purchase agreement. As a result Sofas-R-Us
agreement with her local garage. should:
B Sarah, who purchases a new sofa from
Sofas-R-Us under an interest free credit A report Janice to the Irish Credit Bureau.
agreement. B allow Janice a reduction in the total cost of
C A loan taken out by John from Bretton Bank the credit.
for the purpose of buying a car. C refund all initial charges related to granting
D Peter, who arranges a mortgage at the the credit.
standard variable rate. D seek reasonable compensation for early
E I don’t know. repayment.
E I don’t know.
Page 27 of 27 Sample Paper 1QFA Loans, Sample Paper 1 - Solutions
Q. Answer Reference
1 C 1.2.1 Different forms of Loans
2 A 1.2 Individual Loan Needs
3 C 1.5.3 Financial Services Ombudsman complaints process.
4 D 1.6.2 Consumer Protection Code, 2012
5 C 1.7.1 Essential Elements of a Valid Contract
6 A 2.3.1 Credit Institution
7 D 2.3.3 Credit Servicing Firms
8 C 2.3.6 Rebuilding Ireland Home Loan
9 B 2.4 Security for housing loans
10 D 2.4 Security for housing loans
11 C 2.4.1 Terms of a mortgage
12 C 2.4.2 Personal Guarantee
13 D 2.4.3 Joint and Several Liability
14 D 2.5 Ownership of land
15 A 2.5.1 Freehold Estate
16 C 2.5.3 Rights and Interests over Land
17 A 2.6 Registering the ownership of property
18 A 2.7.2 Joint tenants
19 D 2.7.4 Inheritance Rights
20 C 2.9.2 Properties sold at auction
21 C 2.10.1 Capital and interest
22 C 2.10.2 Interest only
23 D 2.11.1 Standard Variable Rate
24 D 2.11.3 Fixed Rate
25 D 2.12 Housing Loan Interest Rates
26 D 2.13.2 Compound Interest
27 A 3.2 Mortgage Interest Relief
28 A 3.2.1 Determine if a loan is a qualifying loan.
29 B 3.2.3 Determine the rate of tax relief allowed in 2020
30 D 3.2.4 How Mortgage Interest Relief is provided.
31 C 3.3 Capital Acquisition Tax - Inheritance
32 B 3.3 Capital Acquisitions Tax - Inheritance
33 C 3.4 Help to Buy Scheme
34 A 3.5 Finance (Local Property Tax) Act, 2012
35 A 3.6 Rent a Room Relief
36 A 3.7 Tax relief on residential investment property loans
37 B 3.7.1 Capital Gains Tax
38 D 3.7.2 Tax relief on residential investment property loans
39 C 4.2 Assessing a loan application
40 D 4.2 Assessing a loan application
41 C 4.2.1 Creditworthiness Assessment
42 B 4.2.3 Loan-to-Value (LTV) Limits
43 B 4.3.3 Affordability/Stress Testing
44 D 4.3.3 Affordability/Stress Testing
45 D 4.3.3 Affordability / Stress Testing
46 B 4.4 Upfront Costs
47 D 4.5.1 Nominal rate of interest
48 D 4.5.3 Primary use of APRC
49 D 4.5.4 Cost per Thousand.
50 A 5.1.2 Consumer Credit ActQFA Loans, Sample Paper 1 - Solutions
Q. Answer Reference
51 D 5.2.1 Group Mortgage Protection Cover
52 A 5.2.1 Group Mortgage Protection Cover
53 A 5.2.3 Borrower's options
54 A 5.5 Household Insurance
55 C 5.5.1 Household Insurance
56 D 5.5.3.3 Exclusions
57 D 5.5.8.3 Average Clause
58 C 5.5.8.5 Claims Professionals
59 C 6.1.1 Mortgage Intermediaries
60 B 6.1.1 Consumer Credit Act, 1995
61 C 6.1.2 Mortgage Credit intermediary.
62 A 6.1.3 Disclosure of Tied Status
63 B 6.1.4 Use of the terms independent
64 B 6.1.5 Obligation for Public Registers
65 A 6.3.2 Unsolicited Telephone Contact
66 B 6.4 Providing terms of business
67 A 6.5.1 Consumer Protection Code
68 C 6.5.3 Compiling supporting documentation
69 C 6.5.3 Compiling supporting documentation
70 C 6.7 Obtaining a valuation report
71 D 6.8.2 Reason Why Statement
72 A 6.12.1 Prohibition on Linking Services
73 D 6.14.2 The loan offer
74 A 6.15.2 Title Documents
75 D 6.17 Irish Credit Bureau (ICB)
76 B 6.18.1 Credit Information Subjects / Credit Information Providers
77 D 7.1 Re-mortgaging
78 A 7.2.2 Cost of Credit
79 B 7.3.2 What is Negative Equity
80 D 7.3.3.1 Rule of 72
81 A 8.1.4 Regulation
82 C 8.1.5 Code of Conduct on Mortgage Arrears (CCMA), 2013
83 A 8.1.5.2 Definitions.
84 A 8.1.5.3 General obligations of the lender under the CCMA
85 C 8.1.5.4 Not cooperating borrower
86 C 8.1.5.4 Not cooperating borrower
87 A 8.3 Communication with the Borrower
88 C 8.3.1 Unsolicited Telephone Communication.
89 A 8.3.2 Advanced written notice.
90 C 8.6 MARP Step 4: Resolution
91 B 8.11.1 Consumer Protection Code 2012, Debt Management Firms
92 D 8.12.2 Non-judicial Resolutions
93 B 8.13 Non judicial debt resolution process
94 D 8.13.3 Debtor Responsibility
95 B 8.13.5 Personal Insolvency Arrangement
96 A 8.15.3 Release from Bankruptcy
97 C 9.1 Consumer Credit Agreements
98 A 9.1 Consumer Credit Agreements
99 A 9.5 Consumer Credit Agreements
100 B 9.6.7 Early RepaymentSeat Number:
INSTITIÚID TEICNEOLAÍOCHTA, SLIGEACH
INSTITUTE OF TECHNOLOGY, SLIGO
Faculty of Business & Social Sciences
Head of Faculty: Dr. Michael Barrett
Academic Year: 2020/2021
QFA Loans
Sample Paper 2
Programme Name: Certificate in Professional Financial Advice
Certificate in Credit Union Operations
Instructions to Students
Time Allowed: 2 hours
THE EXAM PAPER MUST BE HANDED UP AT THE END OF THE EXAM WITH THE MCQ ANSWER SHEET
1. To be awarded a pass grade in this exam, you must achieve a mark of 40% or above.
2. 120 minutes are allowed for this paper which consists of 100 Multiple Choice Questions (MCQ).
3. Write your membership number in the box provided on the MCQ answer sheet and complete the number grid indicated according
to the instructions listed.
4. There is only one correct answer to each question.
5. Read the instructions on the MCQ answer sheet carefully.
Use the MCQ answer sheet provided to record your answers. Answers recorded on this exam paper will not be marked
Use the pencil provided to complete the MCQ answer sheet
Insert your name, membership number and exam ID at the top of the MCQ answer sheet and shade in the grids as indicated
Each question carries 3 marks for a correct answer, -1 (minus one) for an incorrect answer and 0 for no answer (don’t
know).
6. Handle the MCQ answer sheet with care and do not write notes or any marks on it, except for recording your answers to the
questions.
7. Mobile phones, electronic devices, books, papers or other aids must NOT be in your possession at any time during the exam.
Calculators may be used provided they are silent, non-programmable and incapable of storing text.
8. Hand this exam paper and the MCQ answer sheet to the invigilator at the end of the exam.
FAILURE TO HAND IN THE EXAM PAPER AND THE MCQ ANSWER SHEET MAY PRECLUDE THE
CORRECTION OF YOUR EXAM.
By signing this exam paper, you declare that you have read, understood and agree to be bound by the Examination
Regulations of The Institute of Technology, Sligo. The Regulations are available online at www.LIA.ie
Membership Number:
First Name:
Surname:
Exam Centre:
Signature: Date:
Sample Paper 2QFA Loans
Sample Paper 2
Instructions for entering your answers on the Multiple Choice Question (MCQ) Answer Sheet
The MCQ Answer Sheet will be read by a machine and so these instructions must be read and followed
carefully.
Please do NOT mark any part of the answer sheet with ticks or lines.
Fill in the boxes fully, as shown in the diagram below (Assume A is the answer in this case).
Fill in ONE box only per question as there is only ONE right answer.
If you do not know the answer to a question, and do not want to select A, B, C, or D, you must shade in circle E.
Do NOT leave any row blank.
If you select the correct option, you will score 3.
If you select an incorrect option, you will score -1 (minus 1).
If you select option E, you will score 0 (zero).
INCORRECT CORRECT
A B C D E A B C D E
NOTE: Use the separate MCQ Answer Sheet to record your answers. Do NOT record your answers on this
Examination Paper.
Page 2 of 27 Sample Paper 2QFA Loans
Sample Paper 2
1 A lifetime loan is where: 2 A hire purchase agreement is where
A a property is jointly owned by the lender A A consumer purchases goods now from a
and borrower. retailer with the aid of a loan provided by a
finance company.
B the loan is repaid from the sale proceeds of
the property. B A consumer agrees to hire goods from a
finance company over a particular period
C the borrower pays a notional rent for use of
by paying a monthly fee and must return
the property during their lifetime.
the goods to the finance company at the
D a property is sold to the financial institution end of the specified time.
at a discounted value by a borrower in
C A consumer agrees to hire goods from a
arrears.
finance company over a particular period
E I don't know. with the goods transferring automatically to
the consumer at the end of the period.
D A consumer agrees to hire goods from a
finance company over a particular period
with the option to purchase at the end of
the period.
E I don't know.
3 Mary referred a complaint she had made 4 Under the Family Home Protection Act,
about Delta Bank to the Financial Services 1976, whose interest is primarily protected?
and Pensions Ombudsman (FSPO) as she
was unhappy with their final response. The A A non-owning spouse.
FSPO upheld Mary’s complaint and
awarded her compensation of €50,000. B The mortgage lender.
Delta Bank wish to appeal the FSPO's C A registered property owner.
decision.
D The children of the registered property
Within how many days of the FSPO’s owner.
decision must Delta Bank submit their
appeal to the High Court? E I don't know.
A 15 days
B 20 days
C 30 days
D 35 days
E I don't know.
Page 3 of 27 Sample Paper 2QFA Loans
Sample Paper 2
5 The Competition and Consumer Protection 6 To be eligible for a Rebuilding Ireland
Commission has responsibility for the Home Loan John and Mary, who are both
authorisation of: first time buyers, cannot have a combined
salary greater than:
(i) Credit Intermediaries.
(ii) Mortgage Credit Intermediaries. A €35,000
(iii) Debt Management Firms. B €50,000
C €75,000
A (i) only.
D €100,000
B (ii) only.
E I don't know.
C (i) and (ii) only.
D (i), (ii) and (iii).
E I don't know.
7 Philip agrees to offer West Bank collateral 8 Which of the following are terms of the
security against John’s housing loan. This mortgage, found in a typical mortgage
most likely means that Philip is providing: deed?
A a third party guarantee that Philip will make (i) Description of the property.
the loan repayments if John defaults on his (ii) Amount of the loan and term of
loan. repayment.
B a legal mortgage over the freehold (iii) Interest penalties for late payment.
property.
C a personal covenant to repay John’s loan. A (i) and (ii) only.
D an assignment of a home contents B (i) and (iii) only.
insurance policy. C (ii) and (iii) only.
E I don't know. D (i), (ii) and (iii).
E I don't know.
Page 4 of 27 Sample Paper 2QFA Loans
Sample Paper 2
9 A mortgage deed is a document which: 10 Which of the following is not typically one of
the borrower's covenants that appears in a
A allows the borrower to return the property mortgage deed?
to the lender if they get into financial
difficulty. A The property must be kept in good repair.
B gives the lender automatic legal power to B The property can be let without consent.
evict a borrower, at any time.
C Any obligations imposed by local
C transfers the ownership of a property to a authorities must be complied with.
lender.
D The property must be kept insured as
D transfers a legal interest in the property to a required by the lender.
lender.
E I don't know.
E I don't know.
11 Where more than one person enters into a 12 Peter and Anna bought a property as
mortgage agreement together, their liability tenants in common on a 70:30 split. The
is described as: mortgage is on a joint and several basis.
Peter loses his job and defaults on his
A tenants in common. portion of the mortgage repayments.
B single and joint. In this event, which portion of the mortgage
C collective liability. repayments is Anna liable for?
D joint and several. A 30%
E I don't know. B 70%
C 50%
D 100%
E I don't know.
Page 5 of 27 Sample Paper 2QFA Loans
Sample Paper 2
13 The leaseholder: 14 Francis has a leasehold interest in a
property. This means that he:
A has joint and partial possession and use of
(i) owns the land on which the property
the land with the freeholder until the lease
stands.
expires.
(ii) owns an indefinite lease on the
B cannot make any changes to land or
property.
property under any circumstances.
(iii) can use the property and the land until
C has complete possession and use of the
the lease expires.
land subject to the terms of the lease until
the lease expires.
A (i) only.
D has the same rights as the freeholder
B (iii) only.
under law.
C (i) and (ii) only.
E I don't know.
D (ii) and (iii) only.
E I don't know.
15 In Ireland, who has overall responsibility for 16 Peter and Mary are not married and have
the system which records the transfer of bought a property together. They want the
ownership in property related transactions? ownership of the property to reflect the
amount of money they have each
A Property Registration Authority. contributed to the purchase.
B Department of Justice. To accommodate this, the ownership
C Deeds Authority. should be arranged as:
D Department of the Environment. A joint tenants.
E I don't know. B tenants in common.
C joint and several.
D joint and defined.
E I don't know.
Page 6 of 27 Sample Paper 2QFA Loans
Sample Paper 2
17 David and Margaret own an investment 18 The MOST common method of purchasing
property on a 60:40 basis as tenants in a private residential property is by:
common and have a mortgage of €500,000
outstanding on the property. A private treaty.
They do not have any mortgage protection B cash payment.
cover. If David dies, Margaret is legally
C buying off plans.
liable for:
D auction.
A none of the outstanding mortgage as the
E I don't know.
bank will automatically write-off the
balance.
B 40% of mortgage outstanding.
C 60% of mortgage outstanding.
D 100% of mortgage outstanding.
E I don't know.
19 In the early years of a loan which is 20 John is offered a housing loan by Nore
arranged on a capital and interest basis, Bank whereby interest only is payable for
the: the first three years, after which John will
have to make capital and interest
A interest payments are higher than they are payments.
later
John is at increased risk of negative equity
B capital portion reduces quickly. during the first three years because:
C interest portion is suspended.
A interest rates could rise during this period.
D interest payments are lower than they are
later B interest rates could fall during this period.
E I don't know. C John's net income will fall at the end of this
period.
D no capital is repaid during this period.
E I don't know.
Page 7 of 27 Sample Paper 2QFA Loans
Sample Paper 2
21 Which of the following factors will influence 22 Where a lender intends to charge a
a lender’s decision to change its variable redemption fee, it is required to provide to
mortgage interest rate: the borrower with:
(i) EU inflation rate. (i) a copy of the loan offer.
(ii) current wholesale money market rates (ii) a worked example of the redemption
and the cost of the lender's retail deposits. charge specific to their circumstances.
(iii) lender's profit margin. (iii) details on how the charge is calculated.
A (ii) only. A (i) only.
B (i) and (iii) only. B (i) and (ii) only.
C (ii) and (iii) only. C (ii) and (iii) only.
D (i), (ii) and (iii). D (i), (ii) and (iii).
E I don't know. E I don't know.
23 In year three of the life of a housing loan, a 24 Compound Interest is where interest
mortgage lender can charge a fee on early charged:
redemption on which one the following?
A is deducted from the original loan amount
A A discounted variable rate mortgage where on an annual basis.
the discount was more than 0.75% per
annum below the standard variable for one B only relates to repayments on outstanding
year. arrears.
B A current variable rate loan which was C is added to the loan amount and from then
previously subject to a one-year fixed rate on, the new loan amount equals the
period. original capital and the interest charge.
C A variable rate mortgage which starts at D only relates to the additional interest
4.95% per annum, but where the rate charged to a borrower on the capital
cannot exceed 7% per annum for the first borrowed if they are in arrears.
three years. E I don't know.
D A five-year fixed rate of 3.9% per annum.
E I don't know.
Page 8 of 27 Sample Paper 2QFA Loans
Sample Paper 2
25 Enda wanted financial security and took out 26 Ciara took out her first qualifying home loan
a repayment mortgage with a 5-year fixed in September 2008. In March 2012, she
rate of 4.75%. moved house and took out a new qualifying
home loan.
When the fixed period ended, the variable
rate was 5% but had been over 5.5% for All things remaining the same, how long
the previous four years. Which of the will Ciara pay a lower mortgage repayment
following statements is CORRECT? due to mortgage interest relief?
A Enda has saved money by fixing the rate A Ciara is no longer entitled to claim
for the first five years. mortgage interest tax relief.
B Enda was unwise to fix the rate for the first B Until 31 December 2017.
five years.
C Until 31 December 2018.
C Enda has lost money by fixing the rate for
D Until 31 December 2020.
the first five years.
E I don't know.
D Enda has neither gained nor lost as a result
of fixing the rate.
E I don't know.
27 The maximum relievable interest 28 Maurice qualifies for mortgage interest
thresholds in 2020 for John and Patricia, relief on his home loan. He will receive this
married to each other, and who purchased tax relief by way of a:
their first property in 2012 is:
A deduction against his gross income for tax
A €3,000 purposes.
B €5,000 B tax credit.
C €10,000 C reduction in his loan repayments.
D €20,000 D tax rebate.
E I don't know. E I don't know.
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