Chapter 13- House Purchase By Mortgage

Question 1

What are the 3 types of mortgages available

Answer 1

Repayment mortgage
Endowment mortgage
Pensions mortgage

Question 2

What is a repayment mortgage

Answer 2

Monthly repayment to lender of the capital and interest for a period of 20-25 years

Question 3

What is an endowment mortgage

Answer 3

Payment of only the interest owed. Then take our endowment insurance which is used to pay off the capital at the end of the mortgage

Question 4

What is a pension mortgage

Answer 4

Links with a pension, usually used by self employed as beneficial for tax purposes

Question 5

What is a grant by demise

Answer 5

A mortgagor lease over land for a mortgage

Question 6

Two kinds of mortgages

Answer 6

Legal or equitable

Question 7

What is a legal mortgage

Answer 7

Legal mortgages are legal interests under s1(2)LPA 1925

Question 8

If the land is unregistered how can a mortgage be created

Answer 8

A lease (grant by demise) for a term of years for provision of cessation on redemption (can be paid off early)

A charge by deed

Question 9

How long is the term of mortgage on unregistered land by way of grant for demise

Answer 9

3000 years

Question 10

How must a charge be registered on an unregistered land

Answer 10

By deed which states ‘property has been charged with the debt by way of legal mortgage’

Question 11

3 ways mortgages are registered on registered land

Answer 11

By deed

Expressly staying property has been charged by legal mortgage

Registered on charges register of the title

Question 12

If mortgagee fails to register charge for mortgage do they bind the purchaser

Answer 12

No, unless protected by notice

Question 13

What is an equitable mortgage

Answer 13

Created in writing and used to secure short term loans or overdrafts

Question 14

What is the legal date of redemption

Answer 14

6 months from date of mortgage the mortgagor can repay in full

Question 15

What is equity of redemption

Answer 15

Mortgagor has equitable right to redeem the mortgage once legal date for redemption has passed

Question 16

Fairclough v swan brewery co

Answer 16

Brewery lease was void on the basis the mortgage had a term which prevent early repayment ‘clog on the equity of redemption’

Question 17

Two remedies mortgagee can exercise when mortgagor defaults on mortgage

Answer 17

Obtaining possession and selling property

Question 18

What Dow’s s101 LPA 1925 allow

Answer 18

The power of ale where the mortgage is made by deed and mortgagor has failed to repay

Question 19

Under s103 LPA 1925 what conditions need to be met for power of sale

Answer 19

Interest repayments are more than 2 months in arrears

Notice to pay capital loan has been served and 3 months passed without payment

A breach of another term of mortgage (leased when no permission granted)

Question 20

What is an action in debt

Answer 20

Where mortgagee obtains benefit for indemnity insurance in case debt is not repayed (mortgagee can sue mortgagor for sum owed)

Question 21

What is appointment of receiver?

Answer 21

Business property appoints receiver rather than sell

Question 22

What is foreclosure

Answer 22

Transfer of property into name of mortgagee from the mortgagor

Question 23

How is mortgage protected on unregistered land

Answer 23

Deposit of the title deeds with the lender

Question 24

What is puisne mortgage

Answer 24

Second or subsequent mortgage

Question 25

How can second mortgage be protected on unregistered land

Answer 25

By class Ci land charge

Question 26

How can an equitable mortgage be protected?

Answer 26

By class C(iii) charge under LCA 1972