Need help with CeMAP 3!

Gwen36

Can anyone give me some advise with my CeMAP 3 exam? I don't work in the industry but I'm very determind and I want to get a good grade. I sailed through 1 and 2 but I'm confused with how to chose the correct product and protection product. I know it's important to get this right because the next question is going to be related to that correct answer which could mean a whole load of marks lost.

I just don't understand how to come to the right conclusion. As you know there are always two answers that are very ambiguous and this is something my course material just hasn't covered. It just tells me about the products but it doesn't say how to select the relevant one for your client's needs.

Any advise would be greatly appreciated. Thank you!

GMS

Get some test papers and/or a training CD.

Make sure you understand the reasons why a product is the correct one. Equally as important is to understand why the others are rejected.

The scenarios will lead to the answers in a subtle way.

Practice is teh only way really and if you havesailed through the first 2 you should be ok.

kingstreet

Gwen, you really need to spend some time shadowing an adviser. If you're not working in the industry it's difficult as you don't get to interact regularly with those who do.

I suggest contacting brokers nearby who might let you sit in on their appointments. You need to see how the factfinding process works and how an experienced adviser gathers soft facts about the client's needs and future aspirations, as well as the core-data to complete the factfind.

Once you've done that bit, you'd get to see how sourcing works and how mortgage size impacts on product choice particularly how rate v fees works.

Finally, you'll see how the solution is presented, how advisers close and consolidate.

My partner at the time learned to work with clients by sitting in appointments with me as my "form-filler," listening to the things I said and how I asked questions to get a full picture of their needs.

Not only will this help you pass your exam, it will set you on course for the things you obviously wish to do.

Meeper

Meep!

Perhaps if you could give an example of how something is particularly stumping you specifically and we can show you the thought process behind getting to the answer? Other than that, I agree with kingstreet.

Conrad

The FSA claim 70% of brokers have de - registered Gwen so I hope you realise it is very tough to make it work. Bare in mind all the straight forward clients do not need you, they get better deals direct form lenders.
Here's a real world new enquiry I just had. Now I will turn this into business worth about £5000, but see what you would do with this one;

+ Aged 72 - home owner no mortgage, home worth £300,000
+ part of her land she has obtained planning permission to build a new house on
+ She wants to raise £90,000 to build on the land a new home which she will eventualy move into

+ She intends to then let the existing property

+ She has too low an income for the mortgage
+ Her very close son will pay the mortgage but cannot use his own house as security

+ Her son could buy the house, but it's too complex and would trigger other problems - in any event the lender would likely impose bans on the land being developed and they will know the land has planning permission when they inspect land reg details

+ They do not want a specialist high rate lender - for example development finance and in any event that's difficult to arrange where she is still residing - and now lenders check she has properly moved out if she says that's her plan, but in fact she is not moving out. Lenders would not release funds until she can categorically be sown to have vacated, and in any event rates are too high

+ She might do a B2L, but underwriters from all B2L lenders have said to me they will place a caution on the mortgage, barring and development of the land

+ If she were to getr it past a B2L underwriter, she would then need to state what the £90k loan is then for??

+ They will not consider an equity release product.


It's just this sort of case that keeps you in good profit.



So how would you do this one?

Meeper

Gwen - feel free to ignore Conrad. Advisers are NOT only there to assist in complicated cases at all, as if that were the case then "the best" mortgages would only be chosen from looking at the cheapest rate, which is not the case at all.

Do not be discouraged!

Wh05apk

Conrad wrote: »

The FSA claim 70% of brokers have de - registered Gwen so I hope you realise it is very tough to make it work. Bare in mind all the straight forward clients do not need you, they get better deals direct form lenders.
Here's a real world new enquiry I just had. Now I will turn this into business worth about £5000, but see what you would do with this one;

+ Aged 72 - home owner no mortgage, home worth £300,000
+ part of her land she has obtained planning permission to build a new house on
+ She wants to raise £90,000 to build on the land a new home which she will eventualy move into

+ She intends to then let the existing property

+ She has too low an income for the mortgage
+ Her very close son will pay the mortgage but cannot use his own house as security

+ Her son could buy the house, but it's too complex and would trigger other problems - in any event the lender would likely impose bans on the land being developed and they will know the land has planning permission when they inspect land reg details

+ They do not want a specialist high rate lender - for example development finance and in any event that's difficult to arrange where she is still residing - and now lenders check she has properly moved out if she says that's her plan, but in fact she is not moving out. Lenders would not release funds until she can categorically be sown to have vacated, and in any event rates are too high

+ She might do a B2L, but underwriters from all B2L lenders have said to me they will place a caution on the mortgage, barring and development of the land

+ If she were to getr it past a B2L underwriter, she would then need to state what the £90k loan is then for??

+ They will not consider an equity release product.


It's just this sort of case that keeps you in good profit.



So how would you do this one?

Conrad are you an advisor? if so where is your signature? or are you just a dodgy introducer?

Gwen36

Meeper wrote: »

Meep!

Perhaps if you could give an example of how something is particularly stumping you specifically and we can show you the thought process behind getting to the answer? Other than that, I agree with kingstreet.

Thanks so much for replying everyone. I've taken on board what you have said. I have worked through plenty of exam questions but here is what I don't understand: "Mr & Mrs Spriggs want to keep their monthly payments as low as poss. The interest rate is 6% but is likely to go up within the next year". I've got a choice of a couple of fixed rate options, a capped or a discount. Now, I would go for either a capped or a discount. But how do I decypher which one!? A similar question offered me a tracker which worked out at a really low rate but then my thinking is what if the rates went up really high? So I was going for the capped. But should I be thinking about the savings on a discount?

I think about things too much I reckon hahaha!!!! It's probably staring me in the face. I soooo want to do this. It means a lot to me and I WILL get there.

Also, Conrad you were ignored - I didn't even finish reading what you put. Meeper and Wh05apk, you've been a great help thank you. Kingstreet, I've just moved to a new area so I'm going to go and chat up some advisers today! Ha! THANKS!!!!!

Meeper

In the example you have given above, for examination purposes, I'd be ticking the "Capped" option, depending on the numbers given, if there are any. If there are no rate options given, just the descriptions, then absolutely Capped.

GMS

CeMAP seems to be there to trip you up at times. There often seems to be not enough information to make a balanced decision, certainly not in the real world.

In that example;

Mr & Mrs Spriggs want to keep their monthly payments as low as poss. The interest rate is 6% but is likely to go up within the next year".

The rate likley to go up would to me take a variable out of the equation. Capped rate would put an upper limit on the rate but it would depend on what the cap was as to whether it was suitable.

The KEEP would bring a fixed into play for me as it is the only constant rate in the possibilities.

All depends on the rates, terms of fixed, capped limit etc.

kingstreet

It's a bit short on information, but taking it on face value, you'd recommend the cap provided the rate isn't vastly higher than the best fixed option.

These questions simply don't/can't convey how borrowers FEEL about things and providing an intangible product like a mortgage is reliant on gathering as much insight into the borrower as you can possibly get.