Which statement is true regarding a proposed new remortgage?

Which statement is true regarding a proposed new remortgage?

• A. The application will be subject to all MCOB requirements on advice, suitability and affordability.
• B. Remortgage applications are exempt from MCOB requirements.
• C. Only affordability checks apply.
• D. No mortgage advice is required.

Answer: (A)

When you remortgage, you’re entering a new regulated mortgage contract, so the whole set of MCOB rules applies. This means you must provide appropriate advice, assess whether the loan and its features are suitable for the borrower, and carry out affordability checks to confirm the borrower can repay now and in the future. The adviser needs to collect information on income, outgoings, and plans, explain the product options, and ensure the chosen arrangement fits the borrower’s circumstances and capacity. That combination of advice, suitability assessment, and affordability checks is why this statement is correct. The other options imply exemptions or incomplete requirements, which isn’t how remortgages are treated under MCOB.

When you remortgage, you’re entering a new regulated mortgage contract, so the whole set of MCOB rules applies. This means you must provide appropriate advice, assess whether the loan and its features are suitable for the borrower, and carry out affordability checks to confirm the borrower can repay now and in the future. The adviser needs to collect information on income, outgoings, and plans, explain the product options, and ensure the chosen arrangement fits the borrower’s circumstances and capacity. That combination of advice, suitability assessment, and affordability checks is why this statement is correct. The other options imply exemptions or incomplete requirements, which isn’t how remortgages are treated under MCOB.