Cemap Flashcards
(18 cards)
What does the FCA do in relation to mortgages?
Ensures fair treatment of customers and regulates mortgage sales.
What does MCOB stand for?
Mortgage Conduct of Business.
What is a Key Facts Illustration (KFI) replaced by?
European Standardised Information Sheet (ESIS).
What is the Mortgage Credit Directive (MCD)?
An EU directive that standardised mortgage regulation; adopted into UK law.
Who is a packager in the mortgage process?
An intermediary who compiles applications and may offer exclusive products.
What is a Decision in Principle (DIP)?
Initial indication of how much a lender may offer, subject to full checks.
What is an affordability assessment?
A check of the borrower’s ability to repay now and under stressed conditions.
What is underwriting?
The process of assessing risk before approving a mortgage application.
What does credit scoring do?
Assesses borrower risk based on automated scoring systems.
What is term assurance?
Pays a lump sum if the borrower dies during the policy term.
What is critical illness cover?
Pays out if the borrower is diagnosed with a listed critical illness.
What is income protection?
Replaces income if the borrower can’t work due to illness or injury.
What is decreasing term assurance suitable for?
Repayment mortgages as the cover reduces in line with the debt.
What is a repayment mortgage?
Monthly payments cover both interest and capital.
What is an interest-only mortgage?
Monthly payments cover only interest; capital repaid at end of term.
What is an Early Repayment Charge (ERC)?
Penalty charged for repaying the mortgage early.
What are arrears?
Missed mortgage payments.
What does repossession mean?
Lender takes the property back due to unpaid mortgage debts.
