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RICS APC GD > Loan Security Valuation > Flashcards

Loan Security Valuation Flashcards

1
Q

How have you achieved Level 2/3 in this competency?

A
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2
Q

Can you provide an example of when you have given L3 advice?

A
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3
Q

In the example in your submissions, why did you say/decide/recommend/advise . . . ?

A
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4
Q

Which sections of the Red Book deal with LSV? Give examples of the
requirements/guidance?

A
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5
Q

Why do lenders ask for a LSV?

A

A loan security valuation is conducted to establish whether the value of the loan requested from the lender will be secure.

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6
Q

Are any lenders required to obtain a LSV by law?

A
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7
Q

What types of lending products exist?

A

1) High street mortgages (everyday basic mortgages that can be found by most banks. Come in a variety of forms such as fixed rate)
2) Second charge mortgages (essentially a second mortgage. Used to top up funds)
3) Commercial mortgages (just like regular highstreet mortgages but for commercial properties)
4) Buy to let mortgages (similar to regular mortgages but typically require larger deposits, higher interest rates and higher fees)
5) Bridging loans (Short term loan)
6) Bridge to let

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8
Q

What are the sources of risk to a lender and a valuer? How do lenders and valuers
mitigate risk?

A
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9
Q

Can you describe any case law relating to LSV?

A
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10
Q

What are the potential sources of mortgage fraud?

A
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11
Q

What is a Standard Security?

A
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12
Q

Why might a LSV differ from conventional Market Value?

A
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13
Q

What standard assumptions are valuers permitted to make?

A
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14
Q

When would you report on the basis of a Special Assumption?

A
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15
Q

Why are lenders especially cautious about new-builds/BTLs/HMOs?

A
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16
Q

Give examples of property features lenders often reject as unsuitable?

A
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17
Q

How does type of construction influence your advice on LSV?

A
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18
Q

How does the number of lenders that will accept a property influence your LSV?

A
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19
Q

How have lenders reacted to repeal of ‘Designated defective’ status in Scotland?

A
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20
Q

How do you advise on LSV for a stage payment on a new-build or conversion?

A
21
Q

Why are retentions imposed? How do you decide if one is necessary and/or how much?

A
22
Q

Why don’t you include rental values in the GMVR in a Home Report?

A
23
Q

Why do BTL lenders ask for a rental figure as well as MV?

A
24
Q

How do you advise on LSV if the property is already tenanted?

A
25
Q

Do you report rental value as furnished or unfurnished?

A
26
Q

When would you use the investment method to value for LSV? Would you use it for a
single residential property? Why/why not?

A
27
Q

What is topical in the field of LSV?

A
28
Q

How do you advise on LSV regarding flats with cladding or balconies?

A
29
Q

Why are retentions imposed? How do you decide if one is necessary and/or how much?

A
30
Q

Why don’t you include rental values in the GMVR in a Home Report?

A
31
Q

Why do BTL lenders ask for a rental figure as well as MV?

A
32
Q

How do you advise on LSV if the property is already tenanted?

A
33
Q

Do you report rental value as furnished or unfurnished?

A
34
Q

When would you use the investment method to value for LSV? Would you use it for a
single residential property? Why/why not?

A
35
Q

What is topical in the field of LSV?

A
36
Q

How do you advise on LSV regarding flats with cladding or balconies?

A
37
Q

What is a SWOT analysis?

A
38
Q

What is a sensitivity analysis?

A
39
Q

When have you advised on marketability?

A
40
Q

When would you advise that a property is unsuitable for secured lending?

A
41
Q

Would you advise on the amount or percentage of loan a lender should consider?

A
42
Q

How would you decide if a proposal represented a low/medium/high risk for the lender?

A
43
Q

How do you decide what a reasonable marketing period is?

A
44
Q

What is PMV? How does if differ from MV? Is it always lower? Theoretically, could it be
higher? Why wouldn’t you do that?

A
45
Q

When does the Red Book say PMV must be used? What are the other circumstances
when it is often requested?

A
46
Q

Why do lenders sometimes ask for a MV with restricted marketing period? How do you
establish that? What is the difference between that and PMV?

A
47
Q

What types of valuation can be reported as a LSV?

A
48
Q

Can a Residual be used as a LSV? What if direct comparison suggests a different value?

A

RICS APC GD (21 decks)

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