CH4 Flashcards

1
Q

Are consumer or business BTL’s covered under FCA’s definition of regulated mortgage?

A
  • consumer BTL regulated
  • business BTL not regulated
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2
Q

If a ltd company enters into a mortgage, who is mortgage enforceable against?

A
  • Against company, not directors or shareholders
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3
Q

What is a remortgage?

A
  • replacement loan with a new lender, who will apply similar criteria so borrowers will need to pay for valuations and other costs
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4
Q

What is a Right To Buy?

A

Someone who lives in council home for qualifying minimum time has right to buy at substantial discount

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5
Q

How long must someone have been in council house in order to buy via Right To Buy?

A
  • three years
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6
Q

How is discount calculated on Right To Buy?

A
  • Calculated on number of years tenant has been council tenant and tenant does not have to live in same house over that period
  • 3 - 5 years: 35% house, 50% flat
  • after 5 years increased by 1% each year house, 2% each year flat
  • max discount: £87,200 England, £116,200 London
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7
Q

What is a Help To Buy Equity Loan?

A
  • Newly built home can be purchased with at least 75% cost met by mortgage and 5% deposit
  • Up to 20% paid for by Gov through equity loan
  • Fees not charged for first five years of loan
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8
Q

Who does not have legal capacity to borrow?

A
  • undischarged bankrupts
  • mentally incapacitated
  • minors
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9
Q

Is a Business Loan regulated (purchasing residential property to raise capital to invest in business)?

A

yes, providing business is unincorporated

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10
Q

What are examples of semi-commercial mortgages?

A
  • public houses;
  • bed and breakfast establishments;
  • doctor’s surgeries;
  • shops and offices; and
  • workshops and studios.
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11
Q

What are commercial mortgages? Are the subject to MCOB?

A
  • Loans secured on land that will not be used for residential purposes
  • Not subject to MCOB regulations
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12
Q

What rules surrounding funding are Building Societies subject to?

A
  • 50% raised from retail sources
  • 75% of commercial assets must be mortgages secured on land for residential use
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13
Q

What is securitisation?

A
  • process through which funds are raised in the secondary market by issuing mortgage-backed securities.
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14
Q

What is correspondent lending?

A
  • process whereby the firm that deals directly with the borrower is not the one actually providing the funds for the loan
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15
Q
A
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16
Q

If owner wishes to sell property within ten years of Right To Buy purchase - what must they do?

A

Offer to old landlord (council), if does not agree within 8 weeks, can sell on open market

17
Q

Is a commercial mortgage subject to MCOB?

A

No