LIBF CeMAP (Certificate in Mortgage Advice and Practice) — All Questions

An adviser should confirm the customer's identity and gather documents partly to comply with:

• a.The Equality Act's dress requirements
• b.The Building Regulations
• c.The Highway Code
• d.Anti-money-laundering obligations under the Money Laundering Regulations✓

Firms must carry out customer due diligence, including verifying identity, under the Money Laundering Regulations 2017. This sits alongside MCOB conduct duties and helps prevent mortgage fraud and money laundering through property transactions.

A customer nearing retirement wants a mortgage term extending several years beyond their planned retirement date. On an advised sale the adviser must:

• a.Recommend interest-only automatically
• b.Refuse to consider the customer at all
• c.Consider whether repayments will remain suitable and affordable once the customer's income changes in retirement✓
• d.Simply assume that the customer's state pension, once it begins, will always be more than enough to cover the mortgage payments

Suitability and responsible-lending duties require the adviser and lender to look at income across the whole term, including foreseeable retirement, and to check the mortgage remains suitable and affordable when earned income is likely to fall (MCOB 4.7A and MCOB 11.6).

When first dealing with a customer, disclosing whether the firm offers advice or an execution-only service is important because it:

• a.Determines the customer's credit score
• b.Tells the customer whether a suitability assessment will be carried out on their behalf✓
• c.Determine the precise interest rate that the lender will ultimately charge the customer on their mortgage
• d.Fixes the property's valuation

The service disclosure under MCOB 4.4A signals whether the firm will assess suitability for the customer (advised) or leave product choice to the customer (execution-only), which fundamentally affects the protection the customer receives and the responsibilities that fall on the firm.

Under the Consumer Duty's 'products and services' outcome, a mortgage product should be:

• a.Sold to as many customers as the firm can possibly reach, regardless of whether it actually meets their needs
• b.Withdrawn from the market every year
• c.Designed only to maximise the lender's margin
• d.Designed to meet the needs of an identified target market of customers✓

The products-and-services outcome under PRIN 2A requires firms to design products to meet the needs, characteristics and objectives of a defined target market and to distribute them accordingly, so customers are sold products that are right for them.

A mortgage club or network that a broker belongs to typically:

• a.Provides access to lenders and may act as principal for appointed representatives✓
• b.Issues the customer's binding ESIS entirely on the lender's behalf, without any involvement from the lender itself
• c.Sets the Bank of England Bank Rate
• d.Guarantees every application is accepted

Networks and mortgage clubs give brokers access to a panel of lenders and, for appointed representatives, a network acts as the authorised principal accepting regulatory responsibility for the AR's regulated activities under FSMA. They do not set base rates or guarantee acceptance.

An adviser must present the costs and features of a recommended mortgage in a way that is balanced. This means the adviser should:

• a.Omit any mention of fees
• b.Give appropriate prominence to risks and disadvantages as well as benefits✓
• c.Emphasise only the benefits of the product and leave the customer to discover any drawbacks for themselves later on
• d.Focus solely on the monthly payment

MCOB and the Consumer Duty require balanced communication: benefits and risks should each be given appropriate prominence, so the customer is not left with a misleadingly favourable impression and can make an informed decision.

For a joint mortgage application, an adviser giving advice must ordinarily assess suitability by reference to:

• a.Only the first-named applicant
• b.The needs and circumstances of both applicants✓
• c.Neither applicant, since it is a joint loan
• d.Only the higher earner's circumstances

On a joint application the recommendation must be suitable for the applicants together, so the adviser must take account of both borrowers' needs, circumstances and objectives, as well as the lender assessing affordability using their combined position (MCOB 4.7A and 11.6).

A firm's financial promotion for a mortgage quotes an attractive headline rate but hides the fact that a large arrangement fee applies. This promotion breaches MCOB because it is:

• a.Written in plain English
• b.Not clear, fair and not misleading✓
• c.Aimed at existing customers
• d.Too short

A promotion that highlights a low rate while concealing a material fee gives a misleading impression of cost and breaches the requirement that financial promotions be clear, fair and not misleading (MCOB 3A and the FCA's Principles).

A customer who does not qualify for any permitted execution-only route contacts an interactive sales channel. Under MCOB the firm should generally:

• a.Complete the sale with no disclosure
• b.Refuse to deal with the customer
• c.Direct the customer to a comparison website only
• d.Provide advice and assess suitability✓

Because advice is the default for interactive sales after the MMR, a firm dealing with a customer who does not meet an execution-only exception must give advice and carry out the suitability assessment required by MCOB 4.7A.

The main advantage to a customer of an advised sale, compared with execution-only, is that:

• a.No affordability check is carried out
• b.The firm assesses suitability and is responsible for the recommendation✓
• c.The customer avoids all fees
• d.The mortgage obtained through an advised sale is always cheaper than one obtained on an execution-only basis

On an advised sale the firm takes responsibility for recommending a suitable product, giving the customer recourse if the advice is unsuitable. On execution-only the customer bears responsibility for product choice, though the lender's affordability duty still applies.

An adviser learns the customer intends to let the property to tenants rather than live in it. The adviser should recognise that this may:

• a.Automatically qualify for the lowest residential rate
• b.Take the loan outside a standard regulated residential mortgage and possibly into buy-to-let✓
• c.Make no difference at all to the type of mortgage required or to the way in which it is regulated in any respect
• d.Remove the need for any valuation

A property intended to be let, rather than occupied by the borrower or a related person, generally does not meet the 40% dwelling-use test for a regulated residential mortgage and is likely to be buy-to-let, which has different regulation and product criteria the adviser must identify.

If a customer complains that the mortgage advice they received was unsuitable, the firm must first:

• a.Handle the complaint under the FCA's complaint-handling (DISP) rules✓
• b.Ignore the complaint unless it is repeated three times
• c.Refer the customer straight to the Financial Services Compensation Scheme without investigating the complaint at all
• d.Change the customer's interest rate

Complaints must be handled under the FCA's DISP rules, with a fair investigation and a final response within the required timescale. Only if the customer remains dissatisfied and the firm cannot resolve it may the matter go to the Financial Ombudsman Service.

A customer asks the adviser to leave a small planned inheritance out of the affordability picture so the loan looks larger. The adviser should:

• a.Do exactly as the customer asks and leave out the inheritance so as to help secure the larger loan that they want
• b.Inflate the customer's income to compensate
• c.Submit the application without any income evidence
• d.Base the assessment on accurate, verifiable information and not misrepresent the position✓

Advisers must act with integrity and ensure applications are accurate. Manipulating figures to secure a larger loan risks unaffordable lending and mortgage fraud; the adviser must rely on verifiable information and the lender's genuine affordability assessment (MCOB 11.6).

Under MCOB, an ESIS should be presented in a way that is:

• a.Written in a foreign language
• b.Standardised, so customers can compare offers from different lenders✓
• c.Presented in a completely different layout by every lender, with no common format shared between them at all
• d.Available only after completion

The ESIS uses a standardised format prescribed by the MCD so that key features and costs appear in a consistent place, enabling customers to compare mortgage offers from different lenders on a like-for-like basis (MCOB 5A).

When explaining the difference between advice and execution-only to a customer, the adviser should make clear that on execution-only:

• a.The firm guarantees to the customer that the product they have chosen for themselves is fully suitable for their needs
• b.The customer receives a personal recommendation
• c.No mortgage documents are provided
• d.The customer takes responsibility for choosing the product and receives no recommendation✓

It is central to informed consent that the customer understands that on execution-only the firm makes no personal recommendation and does not assess suitability, so the customer is responsible for deciding the product is right for them (MCOB 4.8A).

An adviser recommends a product mainly because it pays the firm a higher procuration fee, despite a more suitable option being available. This breaches:

• a.Nothing, because procuration fees are allowed
• b.Only the lender's own internal policy on procuration fees, but no rule actually made by the FCA or set out in MCOB
• c.The suitability duty and the Consumer Duty's requirement to act in the customer's interests✓
• d.The Building Regulations

Procuration fees are permitted, but they must not drive an unsuitable recommendation. Placing the firm's remuneration ahead of a more suitable product breaches MCOB 4.7A suitability and the Consumer Duty's requirement to avoid causing foreseeable harm and to act in good faith.

A firm offering both advised and execution-only channels must, under MCOB, ensure that a customer routed to execution-only:

• a.Genuinely qualifies for that route and is not steered away from advice they need✓
• b.Always pays a higher price
• c.Is never given any documents
• d.Formally signs a declaration giving away their statutory right to complain about the outcome of the sale afterwards

MCOB 4.8A and the Consumer Duty require that customers are not inappropriately funnelled into execution-only to avoid the advice obligations. The route must genuinely fit the customer's situation, and customers must not be discouraged from advice they need.

A mortgage adviser must hold an appropriate qualification and be assessed as competent. This requirement primarily protects consumers by ensuring advice is:

• a.Given only by the lender's directors
• b.Free of charge in all cases
• c.Identical for every customer
• d.Given by someone competent to assess suitability✓

The FCA's Training and Competence (TC) rules require mortgage advisers to attain and maintain competence and hold an approved qualification, so that suitability assessments under MCOB 4.7A are carried out by people equipped to do them properly.

An adviser should give the customer the ESIS and explain it so that the customer can:

• a.Skip reading the formal mortgage offer entirely, relying instead only on the adviser's brief spoken summary of it
• b.Avoid any need for legal conveyancing
• c.Negotiate the estate agent's commission
• d.Understand the key features and costs before deciding whether to apply✓

The ESIS exists to help the customer understand and compare the loan's key features and costs before committing. Explaining it supports the Consumer Duty's consumer-understanding outcome and the MCOB requirement to disclose information in good time (MCOB 5A).

Which best describes the relationship between the pre-MMR 'Treating Customers Fairly' framework and the current Consumer Duty?

• a.The Consumer Duty abolishes all conduct standards
• b.They are identical in every respect
• c.Treating Customers Fairly still applies to mortgage sales, whereas the Consumer Duty applies only to investment and pension business and never to home finance
• d.The Consumer Duty sets a higher standard, requiring firms to act to deliver good outcomes rather than merely treat customers fairly✓

The Consumer Duty builds on and raises the bar above the older Treating Customers Fairly outcomes. Rather than simply requiring fair treatment, Principle 12 requires firms to act to deliver good outcomes for retail customers across the four defined outcome areas.

The core affordability requirement in MCOB 11.6 is that a lender must not enter into a regulated mortgage contract unless it can demonstrate that:

• a.The customer has a perfect credit score
• b.The property offered as security will reliably rise in value over the course of the whole mortgage term
• c.The customer can afford to meet the repayments, based on a proper assessment✓
• d.The loan is below £100,000

MCOB 11.6.2 places the responsibility on the lender to assess and be able to show that the mortgage is affordable for the customer, taking account of income and expenditure, rather than lending on the assumption that rising property values or the customer's optimism will cover the cost.

Under MCOB 11.6 the affordability assessment must take account of the customer's:

• a.Hobbies and holiday preferences only
• b.Estate agent's opinion of value
• c.Favourite lender
• d.Income and their committed and basic essential expenditure✓

The affordability assessment must consider the customer's net income together with committed expenditure, basic essential expenditure and basic quality-of-living costs (MCOB 11.6.5 to 11.6.11), so the lender lends only what the customer can realistically sustain.

Following the Mortgage Market Review, a lender must verify a customer's income by:

• a.Using the value of the property as a proxy for income
• b.Obtaining evidence such as payslips or accounts, rather than allowing self-certification✓
• c.Simply accepting the customer's own word about how much they earn, without ever seeing any supporting evidence
• d.Estimating it from the customer's postcode

The MMR ended self-certified lending: MCOB 11.6 requires the lender to verify the customer's income with independent evidence, such as payslips, bank statements, or, for the self-employed, accounts or an SA302 tax calculation, before relying on it in the affordability assessment.

In the MCOB 11.6 affordability assessment, 'committed expenditure' means:

• a.Credit and other contractual commitments the customer must continue to pay, such as loan and card repayments✓
• b.The estate agent's fee
• c.Discretionary money the customer might choose to spend on holidays and other luxuries that they could easily cut back
• d.The lender's own administration costs

Committed expenditure covers the customer's existing credit commitments and other contractual outgoings that will continue after the mortgage completes, for example personal loans, credit-card minimums, hire-purchase and maintenance payments. These must be deducted before deciding how much is left to service the mortgage.

'Basic essential expenditure' in the MCOB affordability rules refers to:

• a.Purely luxury and discretionary spending that the customer could easily cut back on or stop altogether if needed
• b.The lender's profit margin
• c.Essential household spending such as utilities, council tax, food and buildings insurance✓
• d.The customer's pension contributions only

Basic essential expenditure covers the essentials a household must pay, such as heating, water, electricity, council tax, food and essential insurance (MCOB 11.6.10). It is distinguished from basic quality-of-living costs and from expenditure the customer could reasonably reduce.

When applying the interest-rate stress test under MCOB 11.6, the lender must assume the interest rate could rise over the first five years by at least:

• a.Nothing, because rates never rise
• b.One percentage point, having regard to market expectations✓
• c.Ten percentage points in every case
• d.Half the Bank of England Bank Rate

MCOB 11.6.18 requires the lender to consider likely future interest-rate rises and to assume an increase over the first five years of at least one percentage point, or a higher figure if market expectations suggest it, testing whether the customer could still afford the payments.

The interest-rate stress test does NOT generally need to be applied where the mortgage has:

• a.A discounted variable rate
• b.A standard variable rate
• c.A tracker rate
• d.A fixed rate for five years or more from the outset✓

MCOB 11.6.18 disapplies the stress test where the interest rate is fixed for at least the first five years, because the customer's payments are already protected from rate rises during that period. For shorter fixes and variable rates the stress test applies.

For an interest-only mortgage, MCOB 11.6 requires the lender to assess affordability on the basis of:

• a.The monthly interest payments alone, giving no consideration whatsoever to how the capital will eventually be repaid
• b.The assumption that the property will be sold at a profit
• c.The interest payments plus evidence of a credible strategy to repay the capital✓
• d.The customer's gross income before tax only

MCOB 11.6.41 requires the lender, on interest-only lending, to assess affordability of the interest and to obtain evidence of a credible strategy for repaying the capital. The lender must not treat an interest-only mortgage as affordable simply because the interest is low.

Which of the following is an acceptable interest-only capital repayment strategy under MCOB?

• a.A regularly reviewed investment or savings plan projected to repay the capital✓
• b.A vague hope that the customer will inherit money one day
• c.A general assumption that house prices in the area will always keep on rising throughout the mortgage term
• d.No strategy, because the term is long

MCOB 11.6.41 to 11.6.49 require a clearly understood, credible repayment strategy, such as an ISA, pension lump sum, endowment or the planned sale of another asset. Reliance on speculative future events, like unspecified inheritances or assumed house-price growth, is not acceptable.

For an interest-only mortgage, MCOB requires the lender to check the repayment strategy:

• a.At the outset and to review it periodically during the term✓
• b.Never, once the mortgage has started
• c.Only if the customer requests a review
• d.Only at the very end of the term

The lender must be satisfied of a credible strategy at the outset and MCOB 11.6 expects the strategy to be reviewed at least once during the term, so that any shortfall is identified early and the customer can take corrective action before the capital falls due.

A self-employed applicant's income for affordability purposes is usually verified using:

• a.One single recent bank statement, taken on its own, without any accounts or HMRC tax calculations at all
• b.Accounts and/or HMRC tax calculations (such as SA302s) over a period✓
• c.The applicant's own spreadsheet with no supporting evidence
• d.The value of the applicant's car

For the self-employed, lenders typically verify income using two or three years of accounts or HMRC SA302 tax calculations and tax-year overviews, giving a reliable picture of sustainable income for the MCOB 11.6 affordability assessment rather than relying on self-declaration.

MCOB 11.6 requires a lender to take account of future changes to income and expenditure where they are:

• a.Impossible to foresee
• b.Known, or could reasonably be foreseen, to affect affordability during the term✓
• c.Purely speculative
• d.Only ever favourable

The lender must consider likely changes that it knows about or could reasonably foresee, such as the customer retiring during the term or a fixed-term income ending, where these would materially affect the customer's ability to keep up repayments (MCOB 11.6.14).

Where a customer's mortgage term extends into retirement, the lender must, for affordability purposes:

• a.Simply assume that the customer will carry on working and earning at exactly the same level indefinitely
• b.Base the whole assessment on the current salary alone
• c.Consider the customer's expected income in retirement, such as pensions✓
• d.Ignore the change in income at retirement

MCOB 11.6.14 requires the lender to take reasonable steps to establish the customer's likely retirement income where the term extends beyond the expected retirement date, so it can judge whether the mortgage remains affordable once earned income is replaced by pension income.

The responsible-lending rules in MCOB 11 require each lender to have and follow:

• a.A policy of lending to everyone who applies
• b.No policy, relying on the adviser's judgment alone
• c.A written responsible-lending policy setting out how it assesses affordability✓
• d.A single fixed interest rate that it applies uniformly to every customer regardless of their circumstances

MCOB 11.6.20 requires a lender to put in place, and operate in accordance with, a written policy setting out the factors it will take into account when assessing affordability, ensuring consistent and demonstrable responsible-lending decisions.

When a customer consolidates unsecured debts into a new mortgage, the affordability assessment should recognise that:

• a.The customer's income has automatically increased
• b.The debt is now secured over the home and spread over a longer term, which the lender must factor in✓
• c.The debts have disappeared entirely
• d.No affordability assessment is needed at all for a debt consolidation, because the monthly payments simply go down

MCOB 11.6 requires the lender to assess affordability of the whole consolidated borrowing. Although monthly outgoings may fall, the debt becomes secured on the home and may cost more overall over a longer term, so the lender must lend responsibly on the full picture.

The MCOB 11.6 affordability rules apply in full to which of the following?

• a.A bridging loan qualifying for the relevant exemption
• b.A standard first-charge residential mortgage to an ordinary consumer✓
• c.A regulated buy-to-let mortgage where the relevant business-lending exemption in MCOB clearly applies to it
• d.A high-net-worth mortgage meeting the specific exemption

The full affordability assessment applies to standard regulated residential mortgages. MCOB provides tailored or reduced requirements for certain categories, such as high-net-worth and business borrowers and some bridging loans, but the ordinary consumer mortgage is squarely within MCOB 11.6.

Even on an execution-only sale, where the customer chose the product themselves, the lender:

• a.Is released from all responsible-lending duties
• b.May ignore the customer's expenditure
• c.Need not verify income
• d.Must still carry out an affordability assessment under MCOB 11.6✓

The responsible-lending duty falls on the lender regardless of whether the sale was advised or execution-only. Even when the customer picked the product, MCOB 11.6 still requires the lender to verify income and assess affordability before lending.

'Basic quality-of-living costs' in MCOB 11.6 are:

• a.Everyday costs that the customer could immediately stop paying without any real impact on their standard of living
• b.The lender's marketing budget
• c.Optional luxury holidays
• d.Costs that are hard to reduce and provide a basic quality of living, beyond bare essentials✓

Basic quality-of-living costs are expenses that are hard to give up and maintain a reasonable standard of living, such as basic clothing, household goods and personal-care items. They sit between bare essentials and discretionary spending and must be considered in affordability (MCOB 11.6.11).

The affordability assessment under MCOB 11.6 is generally based on the customer's:

• a.The property's rental value
• b.Turnover of their employer
• c.Gross income before tax and National Insurance
• d.Net income after tax and other deductions✓

Affordability is assessed against net (take-home) income, because that is what the customer actually has available to meet the mortgage and other outgoings after tax, National Insurance and pension deductions (MCOB 11.6.5).

The transitional 'modified affordability' rules (MCOB 11.7 and related provisions) were introduced to help:

• a.Existing borrowers, sometimes called mortgage prisoners, remortgage to a cheaper deal without failing a new full affordability test✓
• b.First-time buyers with large deposits
• c.Professional buy-to-let landlords who wish to expand their property portfolios by borrowing considerably more against their existing rental homes
• d.Lenders avoid all affordability checks

The FCA introduced modified affordability provisions so that existing borrowers who are up to date but would fail a full assessment, often 'mortgage prisoners', can switch to a more affordable deal that does not increase their borrowing, without being blocked by the standard MCOB 11.6 test.

Lending into retirement or over a long term should prompt the lender to check that repayments remain affordable when:

• a.The customer's income is likely to fall, for example on retirement✓
• b.House prices rise
• c.The customer changes lender
• d.The Bank Rate is cut

MCOB 11.6.14 requires the lender to consider foreseeable reductions in income over the term, most obviously retirement, so that a mortgage stretching into later life is only granted where it will still be affordable once earned income ends.

A key reason the Mortgage Market Review moved affordability responsibility onto lenders was that, before it:

• a.Interest rates across the market had been set at levels that were simply too low for lenders to make any profit
• b.Self-certified and income-stretched lending had contributed to unaffordable borrowing✓
• c.Lenders verified income too strictly
• d.There were too few mortgage products

Before the MMR, self-certification and lax income checks allowed some borrowers to take on unaffordable mortgages. The MMR responded by requiring lenders to verify income and assess affordability robustly under MCOB 11.6, reducing the risk of irresponsible lending.

MCOB 11.6 does NOT apply in the usual way to:

• a.A residential remortgage with additional borrowing
• b.A completely standard residential capital-and-interest repayment mortgage taken out by an ordinary consumer
• c.A residential interest-only mortgage
• d.A pure buy-to-let loan that is not a regulated mortgage contract✓

The MCOB 11.6 residential affordability rules apply to regulated residential mortgages. A pure buy-to-let loan is generally not a regulated mortgage contract, so the residential affordability assessment does not apply in the same way, although lenders apply rental-cover and other tests.

If, after a proper MCOB 11.6 assessment, a mortgage would be unaffordable for the customer, the lender should:

• a.Extend the term to 60 years automatically
• b.Lend anyway if the property is valuable
• c.Reduce the interest rate to nil
• d.Not enter into the contract on those terms✓

MCOB 11.6.2 prohibits a lender from entering into a regulated mortgage contract unless it can show the customer can afford it. If the assessment shows it is unaffordable, the lender must not lend on those terms, however valuable the security, because the property alone does not make lending responsible.

Under the Consumer Duty's 'price and value' outcome, a mortgage product must:

• a.Be free of any interest
• b.Provide fair value, so the price is reasonable relative to the benefits customers receive✓
• c.Carry the highest fees the market will bear
• d.Always be priced as the single cheapest mortgage product available anywhere in the whole market at that time

The price-and-value outcome under PRIN 2A requires firms to ensure there is a reasonable relationship between the price paid and the benefits received, so products offer fair value. It does not require the lowest price, but it prohibits products that provide poor value.

A lender relying on bonus or commission income when assessing affordability should:

• a.Always count the bonus or commission income in full, treating it exactly as though it were guaranteed basic salary
• b.Ignore all regular income
• c.Assess how reliable and sustainable that income is before relying on it✓
• d.Assume it will double each year

MCOB 11.6 requires income used in the assessment to be evidenced and sustainable. Variable income such as bonuses or commission should be assessed for reliability, and lenders often use a prudent proportion or an average, so affordability is not overstated on uncertain earnings.

A borrower on an interest-only mortgage whose repayment vehicle is projected to fall short should be:

• a.Automatically moved to a longer interest-only term
• b.Charged a penalty and ignored
• c.Contacted so the shortfall can be addressed, in line with treating customers fairly✓
• d.Simply left to discover the shortfall entirely for themselves right at the very end of the mortgage term

MCOB and the Consumer Duty expect lenders to review interest-only repayment strategies and engage with customers where a shortfall is emerging, so options such as overpayments, switching to repayment or extending arrangements can be considered before the capital falls due (MCOB 11.6 and MCOB 13).

The affordability rules recognise that a longer mortgage term:

• a.Lowers the monthly payment but usually increases the total interest paid, which the lender should weigh✓
• b.Guarantees the loan will be repaid
• c.Always makes a mortgage more responsible and affordable, so extending it is invariably in the customer's interest
• d.Removes the need for a stress test

Extending the term reduces monthly payments and can improve affordability, but it increases total interest and may push borrowing into retirement. A responsible lender weighs these effects rather than simply lengthening the term to make an otherwise unaffordable loan appear affordable (MCOB 11.6).

A loan-to-value (LTV) ratio of 90% means the customer is:

• a.Borrowing 90% of the property's value, with a 10% deposit✓
• b.Paying 90% interest
• c.Borrowing 10% of the property's value
• d.Guaranteed the lowest rate

LTV expresses the loan as a percentage of the property's value, so a 90% LTV means a 10% deposit. Higher LTVs represent greater risk to the lender, usually attracting higher rates, and interact with, but do not replace, the MCOB 11.6 affordability assessment.

Verifying income before lending helps the lender comply with MCOB by ensuring that affordability is based on:

• a.Evidenced, reliable income figures✓
• b.The customer's optimism
• c.The lender's target lending volumes
• d.The estate agent's asking price

MCOB 11.6 requires income to be verified with independent evidence so the affordability assessment rests on reliable figures. Lending on unverified, optimistic income was a key failing the MMR was designed to prevent.