1.1.1 In property terms what is the ‘consideration’ that a buyer gives?
Money
1.1.1 In property terms what is the ‘consideration’ that the seller gives?
The property
1.1.1 What’s the Latin for ‘let the buyer beware’?
Caveat Emptor
1.1.1 What is the Latin for the principle of ‘upmost faith’?
Uberrima fides
1.1.1 Insurance contracts have been based traditionally on the principle of uberrima fides. What does this mean?
All material facts must be disclosed by both parties (the principle of utmost faith)
1.1.1 When was the Consumer Insurance (Disclosure and Representations) Act legislated? And how did it affect consumers material disclosures?
- It abolished the duty of consumers to volunteer material facts when applying for insurance, instead requiring them to take reasonable care to answer the insurers questions fully and accurately
1.1.1 If careless misrepresentation is identified on an insurance contract in situations other than a claim, what rights do the insurer and the policy holder have?
The insurer and the policy holder have the right to terminate the contact with reasonable notice
1.1.1 If careless misrepresentation is identified on a life insurance contract, can the insurer terminate the contract?
No
1.1.1 What is the following known as: the setting out in writing of the remit of an agent (estate agent) on behalf of a principal (seller)?
Actual Authority
1.1.2 What does the Principle Of Agency mean?
That the principal (for example a seller) is liable for the agent’s actions, unless the agent acted outside of their remit
1.1.2 What is apparent authority?
When the principal has done or communicated something which apparently gave the agent authority to act outside of their remit on something
1.1.2 In relation to apparent authority, what is ratification?
When the principal agrees after the event when the agent has acted outside their remit
1.1.3 in relation to mortgages, what are the three Ps that mortgage lenders will focus on and what do they mean?
Person: is the lender legally able to lend to the person
Property: is the property suitable security for the required mortgage
Purpose: whether the purpose of the mortgage is acceptable eg house purchase, home improvement, raising capital etc
1.1.4 What two types of Personal Buyers are there?
First time buyers
Second or subsequent buyers
1.1.4 When did the FSA publish a policy statement in relation to the Mortgage Market Review (MMR) and when did the changes to MCOB take effect from?
2012 and April 2014
1.1.4 What’s the main change that MMR required lenders to do?
To focus more on a borrowers affordability as part of the assessment process for mortgage applicants
1.1.4 How did maximum affordability used to be worked out compared with post MMR?
Max used to be worked out with income multiples (eg income x 3 etc) but now it is worked out with income vs expenditure
1.1.4 When people take out a loan or a mortgage, what can the contract also be known as?
The deed
1.1.4 When two people take out a mortgage and the mortgage deed makes them jointly and severally liable for that loan, what does this mean?
This means that they are both liable for the whole amount of the loan not just their ‘share’ of it
1.1.4.2 for BTL criteria what does the level of rent typically need to be for most lenders in relation to the mortgage repayments?
125% of the repayments
1.1.4.2 are BTL mortgages usually regulated?
No
1.1.4.2 why are BTL mortgages not usually regulated (2 reasons)?
Because they are defined as business loans and are not secured on the borrower’s main residence
1.1.4.2 loans that are secured on a property of which at least ? % will he occupied as a main residence by the borrower or a relative are regulated mortgages and subject to MCOB
40%
This would include mortgages raised on the borrowers own main property in order to finance a BTL purchase and mortgages secured on a BTL property where a relative will be in occupation
