Are You Smarter Than A Mortgage Adviser?
How much do you know about getting a mortgage? Attempt this basic Adviser quiz to test your knowledge!
- 1.
Your client is buying a house for $632,000. They tell you they have exactly 20% to use as a deposit. How much do they have?
- A.
$63,200
- B.
$126,400
- C.
$12,640
- D.
Not enough info
Correct Answer
B. $126,400Explanation
20% of $632,000 is $126,400.
A deposit can be made up of equity in a current property, cash savings, gifts from family, KiwiSaver (under certain circumstances) and the HomeStart Grant.Rate this question:
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- 2.
Which type of apartment is easier to get a mortgage on?
- A.
Freehold
- B.
Leasehold
Correct Answer
A. FreeholdExplanation
Apartments can be Leasehold or Freehold. Generally, if you are buying a leasehold apartment, you aren't buying the land and are required to pay rent to the land owner. This increases over the years and can lead to the apartment decreasing in value if that rent becomes too high. Leasehold apartments are therefore often cheaper than freehold but banks are a little more nervous to lend against them.Rate this question:
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- 3.
You live 30 minutes drive from Auckland CBD. How many cars are likely to cut you off without using their indicator on any given commute?
- A.
None. Auckland is a blissful place to drive
- B.
I don't know. Roughly 80?
Correct Answer
B. I don't know. Roughly 80?Explanation
We love you Auckland but you don't love indicating to change lanes.Rate this question:
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- 4.
A Mortgage Adviser should (choose 2 options)
- A.
Launder your ill-gotten gains into a tax haven
- B.
Reduce stress throughout the mortgage process
- C.
Guide you to the right bank for your needs
- D.
Contract bind you into inescapable debt
Correct Answer(s)
B. Reduce stress throughout the mortgage process
C. Guide you to the right bank for your needsExplanation
A Mortgage Adviser should reduce stress throughout the mortgage process by providing guidance and support to the client. They should also guide the client to the right bank for their needs, ensuring that they find the most suitable mortgage option.Rate this question:
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- 5.
The word mortgage comes from a legal term in The Middle Ages meaning
- A.
Castle Loan
- B.
Death Pledge
- C.
Farewell Soul
- D.
More Stone
Correct Answer
B. Death PledgeExplanation
Death Pledge. The Terms and Conditions are a little more relaxed these days...Rate this question:
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- 6.
Your client has a small, unpaid default on their Credit Report. Is it still possible for them to get a mortgage?
- A.
Nope. They're out of the market for life.
- B.
Their only option is to wait until their Credit Report is clear
- C.
Yes, if they are willing to pay a higher interest rate
Correct Answer
C. Yes, if they are willing to pay a higher interest rateExplanation
There are lenders who, for a slightly higher interest rate, will lend to customers with bad credit. The interest rate will depend on how bad their report is. Buyers should automatically discount this. If they are buying sensibly, the additional interest can be worthwhile versus missing out on capital growth or a good opportunity.Rate this question:
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- 7.
In mortgage terms, what does LVR stand for?
- A.
Low Value Residence
- B.
Loan to Value Ratio
- C.
Looking Very Ridiculous
- D.
Lending Via Relations
Correct Answer
B. Loan to Value RatioExplanation
LVR stands for Loan to Value Ratio. It is the amount of your loan compared to the value of your property. So, if your mortgage is $400,000 and your house is worth $500,000, then your LVR is 80%.Rate this question:
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- 8.
Do you have to buy Life and Health insurance from the same bank you have your mortgage with?
- A.
Yes, this is a requirement of getting a mortgage from the banks
- B.
No, the bank does not require you to get Life and Health insurance
Correct Answer
B. No, the bank does not require you to get Life and Health insuranceExplanation
Life and Health insurance is a very good idea when you have a mortgage. However, it is not a pre-requisite to getting a loan (otherwise customers with existing health problems wouldn't be able to get mortgages). It is best to use an Insurance Adviser when you are getting a new policy to make sure you are going to the best insurance company for your needs.Rate this question:
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Quiz Review Timeline +
Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.
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Current Version
-
Aug 22, 2023Quiz Edited by
ProProfs Editorial Team -
Mar 06, 2018Quiz Created by
TheMortgageLab
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