Unit 4

Question 1

What is the minimum claim value for construction?

Answer 1

£1500

Question 2

What does the nhbc build mark scheme provide?

Answer 2

protection against all defects in first 2 years caused by builders failure to meet NHBC standards
AND
A further 8 years insurance protection against the full cost of all damage known as the minimum claim value

Question 3

What is premier guarantee?

Answer 3

Is an insurance similar to buildmark

Question 4

What does LABC work with?

Answer 4

Local authorities and building control surveyors

Question 5

What is the consumer code for home builders?

Answer 5

Seeks to reinforce the protection for consumers - kind of like the ombudsman

Question 6

What do lenders need to see in terms of construction?

Answer 6

Planning permission

Question 7

How many days does the neighbour consultation last for?

Answer 7

21 days

Question 8

Can a neighbour overturn permitted developments?

Answer 8

No

Question 9

Can the council overturn building regulations?

Answer 9

Yes

Question 10

Do you need permission for anything that is listed?

Answer 10

Yes

Question 11

What is a conveyancer similar too?

Answer 11

Solicitor

Question 12

Who do conveyancers carry out legal work for?

Answer 12

Lender

Question 13

When the ownership of property is transferred from a vendor to a purchaser, when does the transaction have to be registered within?

Answer 13

30 days - completion date

Question 14

How much are the legal costs for bankruptcy and who pays these?

Answer 14

£5-£10

The lender

Question 15

How much are the land registry fees for a property work £1m?

Answer 15

£910

Question 16

How much are the land registry fees for a property that is £80,000?

Answer 16

£40

Question 17

When are the land registry fees paid?

Answer 17

This is paid after completion

Question 18

Can the stamp duty surcharge be reclaimed if a couple buy a second property and use this as their main residence and sell their exisiting property within 36 months?

Answer 18

Yes

Question 19

If a couple are living together in a property owned by one person can the other get an exemption of the surcharge on stamp duty?

Answer 19

No

Question 20

Can stamp duty be paid on a transfer of equity?

Answer 20

Yes

Question 21

Anything between husband and wife is?

Answer 21

Tax free

Question 22

What does MIGP stand for?

Answer 22

Mortgage indemnity guarantee premium

Question 23

For a lending of over 75% what will a lender charge a client?

Answer 23

Higher lending charge

Question 24

What charge is used to purchase a mortgage indemnity guarantee premium?

Answer 24

Higher lending charge

Question 25

What does mortgage indemnity guarantee premium protect?

Answer 25

The lender in the event of a shortfall should repossession take place

Question 26

How do you calculate the ‘migable amount’?

Answer 26

Work out the LTV percentage on the house valued Work out the difference between that amount and the amount of the mortgage granted Use the percentage charge given in question to times the migable amount

Question 27

What is the migable amount?

Answer 27

The amount the lender will lend PROVIDED that there is a MIG in place

Question 28

When is the migp called upon?

Answer 28

If the property has to be repossessed and is sold at a price less than the mortgage

Question 29

Under the ABO guidelines how much does an insurer have to pay up to for MIGPs? And who pays the remaining?

Answer 29

Pay out 80% of the claim Remaining 20% is still owed by the borrower

Question 30

What is the ABI?

Answer 30

Association of British insurers

Question 31

What is subrogation?

Answer 31

The insurer has the right to sue the mortgagor for the return of any monies paid to the mortgage Think of burning down tesco

Question 32

What kind of security is MIG?

Answer 32

Additional

Question 33

In terms of additional security what does a guarantor do?

Answer 33

A third party agrees to cover your loan with everything they own

Question 34

What does limited guarantee cover up to?

Answer 34

Up to a percentage, not 100%

Question 35

What is a guarantor subject to?

Answer 35

Affordability check

Question 36

What is surety?

Answer 36

A third party puts up an additional piece of security to cover your loan

Question 37

Can a lender chase you if the surety you have put on the line should it prove to be insufficient?

Answer 37

No

Question 38

Can you use shares as an additional security on loans under surety?

Answer 38

Yes

Question 39

What is it called when you put money in for collateral additional security?

Answer 39

Collateral deposit

Question 40

Do collateral deposits again interest from a lender?

Answer 40

No

Question 41

What’s the difference between surety and collateral additional security?

Answer 41

Surety a third party puts an additional piece of security Collateral you put an additional piece of security

Question 42

What are the three things that can mean a mortgage contact are void?

Answer 42

Mistake/misapprehension/misrepresentation Duress/undue influence Lack of capacity

Question 43

People who act as guarantors or who put up surety will always be advised what?

Answer 43

Seek independent legal advice to avoid any possible claims of undue influence

Question 44

What does is it mean if a mortgage contact is void because of a mistake?

Answer 44

The client believes he has borrowed money at one rate and the lender thinks he has lent it at a different rate

Question 45

What two things can’t be assigned for additional security?

Answer 45

Isa Personal pension

Question 46

What is assignment for additional security?

Answer 46

When it’s assigned it now belongs to the lender, can be surrendered to help the borrower

Question 47

What is deposited in terms of additional security?

Answer 47

Policy is deposited with lender. Lender gains and equitable right/interest. Can take proceeds at maturity but cannot be surrendered

Question 48

For buildings and contents what are the lenders rights?

Answer 48

Require property to be insured Interest noted on policy Right to any claim

Question 49

What is a flood re?

Answer 49

Insurer can pass on flood re premium and impose higher excess

Question 50

Flood insurance is what kind of insurance?

Answer 50

True

Question 51

What’s god about block policies?

Answer 51

Good cover but expensive You cannot lose - all in

Question 52

What are block policies similar too?

Answer 52

Unlimited insurance

Question 53

When does a home have to be built before to be eligible for flood re insurance?

Answer 53

January 2009

Question 54

How do you work out the average?

Answer 54

It’s what you insure your home for, if your property purchase cost is £80,000 you should insure for double that. If you claim for a new roof for example for £20,000 and you’ve only insured your property for £80,000 then that’s 50% insurance meaning the insurer will only pay out for £10,000

Question 55

An offer of advance is what?

Answer 55

Binding document

Question 56

When can the mortgage offer be withdrawn?

Answer 56

False info is found Applicants financial position changes A change occurs to make the security less suitable

Question 57

Who can recalll a mortgage?

Answer 57

Court

Question 58

When does a mortgage begin?

Answer 58

On completion

Question 59

What can offer lettters include?

Answer 59

General and special conditions

Question 60

Would any retention be a special condition?

Answer 60

Yes

Question 61

What will a compulsory order charge be called in the exam?

Answer 61

Airport extension plan

Question 62

What is meant by a compulsory purchase order?

Answer 62

All land is held of the crown - the crown is taking back its land

Question 63

What kind of people took out second charges?

Answer 63

Poor people

Question 64

What is a clog on the equity of redemption?

Answer 64

Any clause put in to stop you

Question 65

What is a mortgage vacation?

Answer 65

A mortgage payment vacation is a period of time in which you can stop making mortgage payments. Typically, these “vacations” are only available to those that have spent a considerable amount of time prepaying their mortgage each month; that is, paying more than the required amount.

Question 66

What is a transfer of equity?

Answer 66

A transfer of equity occurs when a property's owner adds or removes a person (or people) to or from the title on the home, altering the 'ownership' of the property from a legal perspective.

Question 67

Who does the MCD apply too?

Answer 67

MCD applies equally to first and second charge mortgages