Mock questions Flashcards by Chloe Hazeltine

The difference between the amount of an advance and the value of the security is called?

The Margin

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How would an insurance policy be classified

Incorporeal Personalty

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If a document is witnessed by two witnesses who add their signatures as such, how is this termed?

Attested

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Which of the following are likely to be included in a list of mortgage standard conditions?
(i) Keep the property in a fair state of repair
(ii) Allow the lender access to inspect the property
(iii) Insure the property to at least the market value
(iv) Not to let the property without the lender’s permission
(v) To seek the lender’s permission to make any alterations to the property

II & IV

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In respect of a mortgage transaction, which solicitor’s form will a bank require to confirm that it has an enforceable security?

Certificate of title

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If a mortgage is deemed to be regulated, what is it called?

Regulated Mortgage contract

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What is another name for a guarantor?

Surety

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A contract “uberrimae fidei” is a contract…

of the utmost good faith

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What should a banker do annually regarding a guarantor?

Obtain a status enquiry

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In England and Wales, the security for a bridging loan is?

A letter of undertaking

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Which of the following types of security would normally be valued by a bank at 100%

Cash deposit

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How is security over “property with interest in land” constituted?

A standard security

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Which of the following are essential components of a standard security?

(i) Personal obligation
(ii) Lender obligations
(iii) Property description
(iv) Standard conditions
(v) Warrandice
(vi) Loan details

d) (i), (iii), (iv) and (v)

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If a banker gives a customer advice on which mortgage product is most suitable for them, what is this called?

An advised mortgage

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A guarantee that covers one debt only is called

a specific guarantee

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A guarantor may request information from the bank about the account that he/she is guaranteeing. In the situation where the debit balance of the account is greater than the amount of the guarantee, then the banker should:

state that the guarantee is being fully relied upon at present

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In terms of the Age of Legal Capacity (Scotland) Act 1991, a young person has no capacity to enter into any legal transaction if they are under what age?

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A life policy that only provides payment on the death of the life assured is called a:

A whole life policy

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The market to allow smaller, newly established companies to raise capital through the sales of shares is called:

AIM

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A loan to a company that is secured on the assets of the company by way of a floating charge is known as:

Debenture stock

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Lending rates to customers are normally quoted?

Above base rate

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If a customer is looking for an advance to finance home improvements, the best way to check that they are looking for the correct amount is by:

looking at estimates for the planned work

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Profit can be generated from a lending proposition by:

Arrangement fee

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The viability of a lending proposal can be assessed after considering:

person, amount, repayment

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The monthly repayment for a personal loan of £1,000 over two years at an interest rate of 5% would be:

£45.83

Which of the following is true in respect of mortgage lending and mortgage loans?

Lenders must take into account an estimate of discretionary expenditure and living costs when determining the maximum mortgage loan amount

Under a leasing agreement, the leasing company is called the:

Lessor

When an individual has a personal pension, they may withdraw a certain element of it as a tax free lump sum on retirement. This amount, expressed as a percentage of the pension pot is:

25%

The movement of an overdraft from credit to debit is called the:

Swing

Body language represents how much of a person’s total communication:

More than half

The technique of looking at matters from another person’s point of view is called:

Empathy

The document that must be sent to a customer before payment of their full outstanding balance can be demanded is:

A default notice

When interest is debited to a customer’s account, but not taken into the bank’s profit calculation, this is called:

Interest suspense

The 2006 Consumer Credit Act removed the ceiling of £25,000 where a loan would be regulated. There are some exceptions to this rule. Which of the following is an exception?

A loan to a business in excess of £25,000

The Lending Code could potentially cover which of the following?

Businesses with less than 10 employees and individuals

The Bank of England Base Rate is set by

The Monetary Policy Committee

If you sum the values of a customer’s assets and deduct their liabilities, then the resultant figures is called the customer’s net:

means

On a fixed rate personal loan of £1,000 over 2 years with an interest rate of 5%, the total interest charge would be:

£100

To get a clear picture of a customer’s salary, it is normal to ask to see salary slips for the past:

three months

An overdraft is a form of:

short term borrowing

The minimum payment on a credit card account is the larger of:

£5 or 5%

Repayment of a self-build loan normally comes from:

a mortgage

With an Ijara mortgage, the customer pays the financial institution

rent

The first monthly repayment of a capital and interest mortgage will comprise:

mainly interest

When a bank values an item of security, it normally only takes a percentage of the value of the asset into account. What is this practice called?

Discounting

Which of the following would not be used when determining whether something is a fixture or not? a) Status of owner b) Degree of attachment c) Purpose of attachment d) Relationship between contending parties

a) Status of owner

To whom should a valuation report be addressed?

The lender

The legal case that established the “first in first out” principle regarding bank accounts is commonly known as:

Clayton’s case

When a stronger party induces a weaker party to enter into a contract which he or she would not do otherwise, what is this called?

Undue influence

Which of the following clauses in a guarantee form allows all future advances to be secured by the guarantee?

Continuing security

After the death of a customer, the bank receives a payment from the guarantor. These funds should be:

lodged in a separate “Securities Realised” account

When shares are taken as security, how are they held?

In the bank’s nominee company

If a customer gives a banker some of their shares as security for an advance, what is this known as?

Direct security

HM Land Registry holds details on registers in respect of registered land in England & Wales. What are they?

Property; Proprietorship; Charges

The best type of question to use when seeking confirmation from a customer is:

a closed question

When offering a concession during a negotiation, it should be:

traded

The department of a bank which seeks to bring irregular accounts back onto a regular footing is:

Collections

When an account has gone into arrears and the bank reschedules the debt, this is called:

re-aging debt

Which of the following would fall into the definition of an “individual” under the terms of the Consumer Credit Act?

a partnership with two partners

When a customer receives a pre-contact information sheet for a regulated agreement, for how long must they wait before they can sign the loan papers?

they may sign the loan papers on the same day

When considering a lending proposition from a customer, there are three broad areas that should be looked at first. Which of the following would be included in this initial appraisal?

Repayment

If a customer does not bank with your organisation, you could verify their integrity by:

taking a reference/banker’s opinion

If a customer is looking for a mortgage of £80,000 to finance the purchase of a property costing £100,000, then the LTV is:

80%

When a customer defaults on a loan and the banker wishes to obtain repayment from security pledged by the customer then the banker will:

realise the security

When a customer defaults on a loan and the banker wishes to obtain repayment from security pledged by the customer then the banker will:

realise the security

An overdraft facility must be reviewed at least:

annually

When a customer obtains cash by using their credit card this is called:

cash advance

At the end of the life of an interest-only mortgage, the customer needs to have funds available to clear the capital sum outstanding. This is called a:

repayment vehicle

A term loan can be agreed up to a maximum term of:

30 years

The original form of bank lending is:

an overdraft

Which of these would normally have the highest percentage applied to it for bank valuation purposes? a) Gilts b) AIM shares c) FTSE shares d) Unquoted shares

a) Gilts

How is civil possession best described?

Possession through an intermediary

Which register shows transactions relating to property in Scotland prior to 1980?

The Register of Sasines

Where a guarantor pledges some of their assets to a bank in support of their guarantee, what is this called?

Collateral security

Where more than one person is to join in a guarantee, the bank will insist on it being:

a joint and several guarantee

If a guarantor cannot call at the branch to sign the guarantee, which of the following courses of action must a banker never follow?

Send the guarantee to the guarantor for signature

Which of the following clauses in a guarantee form indicates that the total liabilities of the principal debtor are secured?

Whole debt – ultimate loss

A limited company that invests in the shares of other companies is called:

an investment trust

The company that issues a life policy and in return for premiums paid, accepts the risk is called the:

assurer

To whom should a valuation report be addressed?

The lender

When receiving an objection from a customer, the first thing you should do is:

cushion the objection

Poor lighting is an example of which of the following barriers to communication?

Environmental

The objective of a collections department is to:

get the account back onto a regular footing and preserve the relationship

Which of the following is only issued when the bank is holding security?

A call up notice

The Lending Code applies to which of the following?

Charge cards

If a borrower is claiming exemption from the terms of the Consumer Credit Act by declaring that he/she is a high net worth individual, then they must supply their lender with a statement which shows that their net income in the last financial year was over:

£150,000 or his/her net assets exceeded £500,000

What is a terminal bonus?

A bonus paid on the profits of the life company at the end of the term of a life policy.

What is a referral fee?

A charge applied to an account that goes into irregular position. It is intended to cover the cost of investigating why its in an irregular position.

What is probative writting?

A document which by itself is proof of its own authenticity without supporting evidence