Main

Question 1

Parliament has given the main responsibility for planning permission to local authorities, via which act?

Answer 1

The Town and Country Planning Act 1990

Question 2

Name 4 legal fees incurred on the house buying process

Answer 2

Conveyancing: transferring the ownership of the property
Search fees: to investigate whether the seller has good title to the property
Local authority search: locate any road changes or town planning schemes
Land registry fees: to register the property in the buyers name

Question 3

For what minimum period must a firm retain non-real time qualifying credit promotions?

Answer 3

One year from last communication date

Question 4

How long must an adviser retain their advice and recommendation?

Answer 4

Three years

Question 5

At what stage should an adviser strongly recommend that any life assurance commence?

Answer 5

When contracts are exchanged

Question 6

When a property is sold at auction at what point is the first contact made between the vendor and buyer?

Answer 6

When the auctioneer closes the bidding

Question 7

Who is ultimately responsible for ensuring the vendor has a right to sell their property?

Answer 7

The buyers conveyancer

Question 8

At what point does a buyer need to pay a deposit when purchasing a property at auction?

Answer 8

On the day of the auction

Question 9

The most common method of property sale in Scotland is by

Answer 9

Private bargain

Question 10

Conclusion of missives in Scotland is similar to which stage in England?

Answer 10

Unconditional exchange of contracts

Question 11

If a valuation highlights defects and the value recommends the lender proceeds, subject to an undertaking, what does this mean?

Answer 11

The mortgage is agreed in full, subject to the borrower agreeing to make specific repairs

Question 12

A valuation has highlighted several property defects and they recommend the lender proceeds, subject to a retention. What does this mean?

Answer 12

Mortgage is agreed, but some funds are held back until certain repair work has been carried

Question 13

What type of survey would a lender usually require for a newly built property?

Answer 13

A basic valuation

Question 14

If someone receives a secured loan, which will be secured by a second charge on his main residence, what reflection period is offered?

Answer 14

7 days

Question 15

Before an adviser makes a recommendation, what primary factor must they consider when explaining the different repayment options?

Answer 15

The borrowers attitude to risk

Question 16

If someone is buying a second home, what additional level of SDLT applies?

Answer 16

3% (for properties over £40,000) or greater

Question 17

What is the first fee a borrower may pay their solicitor?

Answer 17

A local search fee

Question 18

Who does title indemnity insurance always protect?

Answer 18

The buyer

Question 19

The rules for advisers who sell mortgage protection insurance policies only, are contained in what regulation handbook?

Answer 19

Insurance: Conduct of Business Sourcebook (ICOBS)

Question 20

Which insurance policy is always a condition of a mortgage loan?

Answer 20

Buildings Insurance Policy

Question 21

What is the principal reason for a borrower paying a higher lending charge?

Answer 21

To borrow at a higher loan to value percentage

Question 22

For how long will a mortgage payment protection insurance policy usually cover interest payments in the event of redundancy?

Answer 22

For up to 2 years, or when the policyholder is re-employed, whichever is earlier

Question 23

Which type of equity release scheme involves selling all or part of an individuals home to a private company?

Answer 23

Home reversion plan

Question 24

What is an Individual Voluntary Arrangement (IVA)?

Answer 24

A formal arrangement with creditors to repay personal debt

Question 25

According to MCOB, how long must a lender keep records of dealing with a customers arrears?

Answer 25

Three years

Question 26

Under the right to buy legislation after what period can the owner usually sell the property without penalty?

Answer 26

After 5 years

Question 27

Under the Support for Mortgage Interest (SMI) rules, when would payments commence for an unemployed claimant who’s in receipt of Universal Credit?

Answer 27

After 39 weeks

Question 28

Under the leasehold reform housing and urban development act 1993, leaseholders are permitted to…

Answer 28

Group together to purchase the freehold of a building containing more than two flats

Question 29

What expense can be deducted from profits made on the sale of a buy to let property in order to reduce their CGT liability?

Answer 29

The costs incurred in acquiring and disposing of the property

Question 30

Rates on a tracker mortgage are most commonly set in line with…

Answer 30

The BOE base rate

Question 31

What’s a main advantage to a customer arranging a home reversion rather than a lifetime interest only mortgage?

Answer 31

Interest payments will not be required

Question 32

In what circumstances is a low cost endowment policy guaranteed to be sufficient to repay the mortgage?

Answer 32

On death prior to maturity only

Question 33

What is a Market Value Reduction? (MVR)

Answer 33

A discretionary reduction in the value of a with profits policy applied by the insurer on early surrender

Question 34

A shared appreciation scheme is where

Answer 34

Lenders charge no or little interest in return for a share of the equity of a property

Question 35

If a guarantor offers a supported guarantee, this is known as a:

Answer 35

A surety

Question 36

What is the equity of redemption?

Answer 36

The borrowers right to repay the mortgage at anytime, even after repossession

Question 37

Bankruptcy normally lasts for one year but could be extended by up to:

Answer 37

2 to 5 years

Question 38

Do with profits or unit linked policies allow the policy holder to vary their contributions?

Answer 38

Unit linked policies allow contributions to vary, with profits do not let them vary the contributions

Question 39

Mortgage rescue schemes are operated by:

Answer 39

Local housing authorities

Question 40

A mortgage is set up on a joint tenancy basis, which means that each joint owner is liable for:

Answer 40

The whole mortgage on a joint and several basis

Question 41

If a borrower who holds a unit-linked endowment policy dies during the policy term, the policy pays out the:

Answer 41

The greater of the value of units held or the sum assured, whichever is higher

Question 42

Can home reversion schemes offer a lump sum or income payments?

Answer 42

Both

Question 43

The binding contract between lender and borrower in England & Wales is often referred to as the mortgage deed, and this creates the:

Answer 43

Legal charge

Question 44

Which cost is most likely to be incurred in redeeming a mortgage?

Answer 44

Sealing fee

Question 45

What is remortgaging?

Answer 45

Switching mortgages to another provider

Question 46

Kris has a mortgage with his building society and a second charge loan with a finance company both secured on his home. He is now remortgaging his home. What action, if any, must Kris take in respect of his second charge loan?

Answer 46

He must ask the finance provider to suspend their second charge

Question 47

When exercising its power of sale over a repossessed property, the lender must

Answer 47

Obtain the best price practical

Question 48

A borrower who recently fell into arrears. According to the Mortgages and Home Finance: Conduct of Business Sourcebook (MCOB), what period of time, if any, should the lender allow the borrower to consider the best course of action?

Answer 48

There is no specific deadline but a reasonable period of time should be granted

Question 49

Alan, aged 45, is single, lives alone and has no dependants. He earns £75,000 per annum and has a capital and interest mortgage of £300,000 with 24 years remaining. He is having difficulty in making his mortgage payments and although he is NOT yet in arrears, he has approached his lender for advice. What option is the lender most likely to recommend in the first instance?

Answer 49

Transfer temporarily to an interest only mortgage

Question 50

What is the maximum amount of savings that a 55-year-old borrower can hold before his eligibility for income support and Support for Mortgage Interest (SMI) ceases?

Answer 50

£16,000

Question 51

To whom is Support for Mortgage Interest (SMI) paid directly?

Answer 51

To its lender entirely

Question 52

Under the terms of the Financial Services Act 2012, the Bank of England has overall responsibility for the

Answer 52

PRA and FPC

Question 53

Which body is responsible for ensuring that a mortgage lender complies with data protection legislation?

Answer 53

The Information Commissioner’s Office

Question 54

Under the Leasehold Reform, Housing and Urban Development Act 1993, what minimum proportion of qualifying owners as leaseholders, in a large block of flats, must be in agreement, to purchase the freehold interest?

Answer 54

50%

Question 55

The Ijara method used by Islamic Home Purchase Plan providers involves a

Answer 55

Property being purchased by the provider and leased back to the customer for a set period, after which time it legally belongs to them.

Question 56

What specific contract condition normally accompanies a discounted rate mortgage with a cash back to pay fees, in order to protect the mortgage lender?

Answer 56

An early repayment charge

Question 57

Typically, when is a mortgage loan released to an individual looking to build their own home?

Answer 57

In accordance with pre determined building completion points

Question 58

Ethel has a full home reversion plan. Who will be responsible for the eventual sale of the property on her death?

Answer 58

The home reversion provider only

Question 59

Which type of mortgage is most popular with buy-to-let investors?

Answer 59

An interest only mortgage

Question 60

A borrower plans to use an ISA to repay her interest only mortgage, when must the lender check in with her to ensure she can repay the mortgage in full?

Answer 60

They must make one check during the mortgage term

Question 61

What is the best form of property ownership if wanting to ensure a portion of a property passes to the child?

Answer 61

Tenancy in common

Question 62

Who is ultimately responsible for ensuring that a vendor has a right to sell their property?

Answer 62

The buyers conveyancer

Question 63

What type of survey would usually be recommended for a buyer who wishes to buy a 30 year old property without a mortgage?

Answer 63

A homebuyer report

Question 64

A lender may seek to add a further advance to an original mortgage in order to…

Answer 64

Postpone a second mortgagee’s interest in the property

Question 65

According to Mcobs, how long must a lender keep records of dealing with a customer in arrears?

Answer 65

Three years

Question 66

If a borrower has fallen behind on payments, and they paid a higher lending charge, what may their position be regarding the balance of the outstanding loan? Presuming the higher lending charge has been recovered from the lenders insurer

Answer 66

The borrower will potentially be liable to repay the balance outstanding to the higher lending charge insurer

Question 67

3 means tests applied when someone claims for Support for Mortgage Interest (SMI)

Answer 67

Savings over £16,000 are disallowed Higher thresholds may apply to over 60’s SMI is payable up to a £200,000 mortgage, but drops to £100,000 for those on pension credit

Question 68

To move large amounts of funds to complete house purchase transactions, which system is most used by solicitors to guarantee the same day, irrevocable delivery of funds?

Answer 68

CHAPS

Question 69

Records of county court judgements [CCJs] are used by lenders when assessing the credit worthiness of a borrower. The equivalent of a CCJ In Scotland is known as a:

Answer 69

Court Decree

Question 70

With regard to MCOB definitions, what is a stepped rate?

Answer 70

The interest rate applied to the account may move during the initial borrowing period

Question 71

A deed for a legal mortgage must always be:

Answer 71

in writing, signed, witnessed, dated and sealed.

Question 72

Samantha has decided that she can no longer afford to make payments to her mortgage account and has informed the lender that she is leaving the property to live with her sister. Her decision is best described as:

Answer 72

Peaceable possession

Question 73

The name given to the process whereby a solicitor or licensed conveyancer brings together money received and due at completion is:

Answer 73

Engrossment

Question 74

What are 3 examples of a “Non status” borrower…

Answer 74

An actor A start up self employed person within last 3 years A discharged bankrupt person at least 5 years ago and is now debt free

Question 75

In the case of leasehold properties, buildings insurance is usually carried who…

Answer 75

The freeholder

Question 76

If a borrower dies during the term of a capital and interest mortgage, what happens to the mortgage?

Answer 76

The outstanding balance becomes a debt on the estate

Question 77

UK interest rate is set within a rate of which measure of inflation?

Answer 77

CPI

Question 78

Are council tax and property insurance included within the RPI?

Answer 78

No, they’re both excluded

Question 79

Which Act gave public sector tenants the right to buy their council homes?

Answer 79

Housing Act 1980

Question 80

Post auction, the property purchase should be completed within how many days?

Answer 80

56 days

Question 81

How do you save some money when using a daily interest loan vs an annual interest loan?

Answer 81

Because with a daily interest loan the lender calculates and adds a bit of interest every day, therefore you’re more regularly paying off the interest and the balance is decreasing little by little

Question 82

For a guarantee to be enforceable, how must it be agreed?

Answer 82

In writing

Question 83

What are the typical % of property value one could raise via a lifetime mortgage?

Answer 83

20-45%

Question 84

In which section of an offer of advance of a mortgage would details of fees and charges appear?

Answer 84

The Mortgage

Question 85

The role of the National House Building Council in the new house building industry is best described as…

Answer 85

Regulator and standard setter

Question 86

What legal fees are associated with the redemption and vacation of a mortgage?

Answer 86

Discharge & Sealing

Question 87

Some retail banks use second mortgages as collateral for hitherto unsecured overdrafts. The category of borrowers most appropriate for this measure are referred to as representing what level of risk…

Answer 87

Hard core risk