CeMAP Module 2 common mistakes
CeMAP Module 2 · Understand the traps and how to avoid them.
Naming the Key Facts Illustration (KFI) as the disclosure document that must be given to the customer before a binding mortgage offer, and being unable to state when the European Standardised Information Sheet (ESIS) is triggered.
Candidates revise from older summarised notes and memorise a list of acronyms without the dates attached to them, so the KFI/ESIS swap (Mortgage Credit Directive changes) never registers as a change.
What to do instead
Write out a single one-line disclosure timeline on a flashcard - initial disclosure at first contact, ESIS once a regulated mortgage contract is advised/applied for and in any event before a binding offer, then the formal offer - and mark the KFI as superseded so it is never selected in a 'what must be provided' question.
Stating that an execution-only (non-advised) mortgage sale removes the lender's obligation to carry out an affordability and creditworthiness assessment, or removes the need for the intermediary to establish the sale is appropriate for execution-only.
Candidates collapse two separate axes into one: they learn 'advised vs non-advised' as a binary and assume the lighter route strips out the responsible-lending rules as well.
What to do instead
Keep advice status and lender obligations in separate columns in your notes: advice status drives the adviser's duties (establishing the customer's needs, appropriateness, warnings that they have no advice and may not get the most suitable product), while affordability/creditworthiness assessment is a lender duty that applies to every regulated mortgage contract regardless of how it was sold.
For an interest-only mortgage, assessing affordability by using the interest-only monthly payment the customer will actually pay, and concluding the loan is affordable on that basis.
Candidates mirror the customer's stated payment rather than the underwriting test, because the interest-only figure looks like the 'real' cost and the affordability question seems to be about what the customer pays.
What to do instead
Treat capital-repayment-basis assessment as the default for any interest-only case: recalculate the payment as if it were a repayment mortgage over the same term, and only move away from that where a genuine, evidenced repayment strategy exception applies. Practise by taking three interest-only cases and computing both figures side by side.
Comparing or recommending mortgage deals on the headline initial rate alone, ignoring arrangement/booking fees, valuation fees, the reversion rate and the early repayment charge if the customer might move within the benefit period.
The initial rate is the most visible number on a comparison table and candidates want a quick discriminator, so cost over the actual holding period is never computed.
What to do instead
For every product comparison question, do a total-cost-over-the-deal-period calculation: (monthly payment x months of the deal) + all fees + any ERC triggered by the customer's stated plans, and quote the reversion rate as the ongoing cost afterwards. If the customer's plans suggest early redemption, the ERC becomes a decision factor, not a footnote.
Counting 100% of bonus, overtime or commission as usable income when calculating affordability, using only the latest payslip or P60 total.
Candidates see a gross annual figure on the documentation and treat it as contractual, not distinguishing guaranteed from non-guaranteed pay.
What to do instead
Adopt a standing rule: contractual basic salary is taken at face value; non-guaranteed elements are subject to a lender haircut and require a history (typically two to three years showing consistency and an expectation of continuance). State the haircut and the evidence you would request in every affordability answer rather than quoting the raw figure.
Calculating loan-to-value using the higher of the purchase price and the lender's valuation (or adding the product fee to the loan without re-checking the LTV band).
Intuition says the property's 'worth' is the valuation, and candidates forget that LTV tests against the lower figure so a down-valuation pushes the customer into a higher band and a different product.
What to do instead
Write the rule as a formula you apply mechanically: LTV = loan ÷ the lower of purchase price and lender valuation (remortgages: loan ÷ valuation). Always add a check step - if the valuation comes in below the price or fees are added to the loan, recalculate the LTV band and re-select the product.
Describing the lender's mortgage valuation as a survey that protects the borrower, or advising the customer that no further survey is needed because 'the lender is having one done'.
Both involve a visit by a valuer and a report, so candidates treat them as one product; the different purpose, duty of care and who can rely on the report are not separated in revision.
What to do instead
Learn a three-way comparison table - mortgage valuation (lender's security, lender can rely on it, borrower generally cannot), homebuyer/HomeBuyer-style report, and full building survey (condition and defects, for the borrower) - and in any advice scenario always state that the customer should consider their own survey independently of the lender's valuation.
Ignoring the unexpired lease term, ground rent review clauses and the need for landlord/management consent when advising on a leasehold purchase, treating the lease as a minor administrative detail.
Freehold and leasehold properties look identical on a mortgage application, and candidates focus on price and LTV, leaving the legal title issues to a later stage of the process.
What to do instead
Build a leasehold checklist you run before recommending any product: unexpired term against the mortgage term (lenders typically require the lease to run well beyond the term end, with many wanting around 70+ years unexpired), whether a lease extension is needed and who pays, ground rent level and review terms, and any restriction on letting or alterations requiring consent - then state how each affects the lender's willingness to lend.
Assuming a lender can repossess or evict a borrower once arrears have built up, or shortly after a payment is missed, without a court order, and omitting any consideration of forbearance before possession is contemplated.
Everyday language ('the lender takes the house back') blurs the legal step, and candidates answer the arrears question as a commercial decision rather than a regulated process with mandatory stages.
What to do instead
Memorise the sequence as a chain you can recite: arrears arise → contact and income/expenditure review → forbearance options considered and recorded (payment holiday, term extension, switch to interest-only, arrears capitalisation) → pre-action protocol steps and referral to free debt advice → court proceedings → possession order → only then enforcement. Answer any possession question by starting from 'possession is a last resort after forbearance has been considered'.
Treating a transfer of equity (adding or removing a party, or transferring between spouses/civil partners) as a paperwork formality that needs no lender consent, no affordability reassessment and no consideration of the mortgage terms.
The change looks like a private arrangement between the owners, so candidates do not connect it to the fact that the mortgage contract and its affordability basis were agreed with specific borrowers.
What to do instead
Learn the post-completion rule: any change to the parties or the legal ownership requires the lender's consent, underwriting of the remaining or new borrower(s) including affordability, and consideration of whether the existing product/rate can be retained or the loan must be redeemed with any early repayment charge. Practise by writing the lender's checklist for a transfer of equity from two borrowers to one.