MOCK EXAM 1

Question 1

What minimum percentage of the land of a residential property must be used as a dwelling by a borrower or his relatives if any loan secured against it by means of a first legal mortgage is to be regulated by the MCOB Rules?

A. 20%
B. 25%
C. 40%
D. 50%

Answer 1

C. 40%

Question 2

In relation to registered land, possessory title means that:

A. it is not possible to guarantee freehold title.

B. the land is freehold.

C. the title, as registered, is defective.

D. the title deeds may be missing.

Answer 2

D. the title deeds may be missing.

Question 3

Which of the following pieces of information in respect of a plot of registered land would be found in the proprietorship register?

A. A plan of the land.
B. Any beneficial easement.
C. The class of title.
D. The title number.

Answer 3

C. The class of title.

Question 4

Which one of the following would be a standard condition in a mortgage offer?

A. A retention.

B. Completion of roads and access.

C. Redemption of an existing mortgage.

D. Satisfactory report on title.

Answer 4

D. Satisfactory report on title.

Question 5

When an estate agent provides details about the properties that they are marketing, which legislation do they have to adhere to in respect of disclosing all relevant, known defects regarding the property?

A. Property Misdescriptions Act

B. Proceeds of Crime Act

C. Consumer Protection Amendment Regulations

D. General Data Protection Regulations.

Answer 5

C. Consumer Protection Amendment Regulations

Question 6

Alan is a mortgage adviser. For which of the following would he be most likely to recommend a mortgage from a sub-prime lender?

A. Chris, an undischarged bankrupt.

B. Julie, an employee with 12 months’ employment.

C. Anna, who wishes to borrow 96% of the property value.

D. Ryan, who has three recent County Court Judgments.

Answer 6

D. Ryan, who has three recent County Court Judgments.

Question 7

Which of the following is true of covenants?

A. They are imposed by the Land Registry.

B. They are passed on with the property.

C. They indicate a right one person has over the property of another.

D. They ‘run with the buyer’.

Answer 7

B. They are passed on with the property.

Question 8

Jane (non first time buyer) has successfully negotiated a reduction in the original asking price of £260,000 and agreed a new asking price of £248,000. How much Stamp Duty has been saved?

A. £540
B. £780
C. £2,480
D. £600

Answer 8

A. £540

Question 9

Andrew wishes to make a claim under his Buildmark guarantee for a defect in his property. To whom should he initially submit his claim?

A. His local authority
B. National House Building Council
C. The builder
D. Zurich Mutual Insurance Company

Answer 9

C. The builder

Question 10

There are three situations when a lender could withdraw a mortgage offer. This
would not include:

A. When the applicant was shown to have given false information.

B. When the applicant lost their job after the offer was made.

C. When the valuation is unsatisfactory.

D. When there is an unsatisfactory result to the investigation of title.

Answer 10

C. When the valuation is unsatisfactory.

Question 11

In relation the lender’s rights, when it makes a further advance, a new mortgage deed:

A. is not necessary.

B. is required in all circumstances.

C. must be issued only where total borrowing exceeds 85% LTV.

D. must be offered to the borrower and issued where the borrower requires it.

Answer 11

A. is not necessary.

Question 12

Which of the following will legally be required during the conveyancing process?

A. A Home Information Pack.
B. A Condition Report
C. An energy performance certificate
D. A full structural survey.

Answer 12

C. An energy performance certificate

Question 13

A survey on Peter’s house has identified heave. This may have been caused by:

A. faulty foundations.
B. high concentration of radon gas.
C. mining beneath the land.
D. overhead electric power lines.

Answer 13

C. mining beneath the land.

Question 14

Alan has successfully bid £156,000 for a house at auction. He must:

A. exchange contracts on the day of the auction and pay the full purchase price within 28 days.

B. pay a deposit of £15,600 and exchange contracts, both within 28 days of the auction.

C. pay a deposit of £15,600 and exchange contracts on the day of the auction.

D. pay an amount as agreed with the auctioneer as a deposit on the day of the auction and arrange a mortgage within 28 days.

Answer 14

C. pay a deposit of £15,600 and exchange contracts on the day of the auction.

Question 15

A house is sold at a property auction on 10 April. When will contracts normally be exchanged on this transaction?

A. On 10 April.
B. On 17 April.
C. Within a maximum of 14 days of the auction.
D. Within a maximum of 28 days of the auction.

Answer 15

A. On 10 April.

Question 16

What is a major benefit provided by the NHBC Buildmark Scheme?

A. All house builders belong to the scheme, so new property purchasers enjoy full protection against defects.

B. All claims made by purchasers against defects are handled directly by the NHBC.

C. It provides two year guarantees against major defects for properties over ten years old.

D. It provides ten year guarantees against most defects in the structure of new properties.

Answer 16

D. It provides ten year guarantees against most defects in the structure of new properties.

Question 17

A property is being advertised by an estate agent who wishes to include a reference to gas central heating, although it is unclear who installed it or what condition it is in. What specific action should the estate agent take under the Consumer Protection from Unfair Trading Regulations Act?

A. Include a qualifying statement about it in the marketing details.

B. Issue the vendor with a certified copy of the advertisement.

C. Obtain a written disclaimer from the vendor.

D. Remove all reference to it in the marketing.

Answer 17

A. Include a qualifying statement about it in the marketing details.

Question 18

What is the position when an offer is made and accepted on a property?

A. Neither party have any legal obligations.

B. At least one party must be aged 18 or over for it to have any legal standing.

C. It places legal obligations on both parties.

D. The principle of caveat emptor would apply to both parties from that point.

Answer 18

A. Neither party have any legal obligations.

Question 19

Which of the following does not fall under the Financial Services and Markets Act 2000 as an MCOB regulated mortgage?

A. Interest only mortgages backed by investment policies.

B. Lifetime mortgages.

C. Loans where any part of the property is for commercial use.

D. A mortgage taken by a company as an investment

Answer 19

D. A mortgage taken by a company as an investment

Question 20

Sam, a mortgage advisor, is seeking to establish if his customer is able to manage his finances effectively. The most likely initial requirement would be for Sam to:

A. approach an organisation such as Experian.

B. do a search for county court judgements.

C. review a number of bank statements.

D. write to the customer’s accountant.

Answer 20

C. review a number of bank statements.

Question 21

Which one of the following would be least useful to a lender seeking to verify a self- employed mortgage applicant’s income?

A. A P60.

B. A self-assessment tax calculation.

C. Employer’s reference.

D. Recent bank statements.

Answer 21

A. A P60.

Question 22

Sara, a mortgage adviser, has been asked to recommend a mortgage for Ian and Jan. She has identified what she feels is the most suitable mortgage and has an illustration for the couple. What must she do before Ian and Jan make an application?

A. Ask them to read the illustration and ask for clarification where necessary.

B. Explain that the illustration is an approximate guide to the costs of the contract, which may end up higher than shown.

C. Tell them the main information contained in the illustration.

D. There are no formal requirements.

Answer 22

A. Ask them to read the illustration and ask for clarification where necessary.

Question 23

When Shirley started her endowment mortgage she was asked to pay a fee for a title indemnity policy. The purpose of this was to protect:

A. Shirley and her lender from legal action from the Land Registry in the event of a solicitor’s error.

B. Shirley and her lender from ownership claims from others.

C. Shirley’s solicitor in the event that there was a later dispute over his legal work and the quality of the title.

D. The lender in the event of Shirley defaulting on the loan and disputing any
claim by the lender.

Answer 23

B. Shirley and her lender from ownership claims from others.

Question 24

When might a lender ask a borrower to pay a higher lending charge?

A. When a mortgage exceeds a pre-determined amount.

B. When the borrower has a poor credit history.

C. When the loan exceeds the lender’s normal income criteria.

D. When the loan to value exceeds 75%.

Answer 24

D. When the loan to value exceeds 75%.

Question 25

Which of the following factors is least likely to affect the security of a property from a lender’s perspective?

A. A flat is part of a ‘multiple use’ property.

B. The term outstanding on any leasehold property

C. The existence of a Premier Guarantee insurance policy rather than the NHBC scheme.

D. The walls are of pre-cast concrete.

Answer 25

C. The existence of a Premier Guarantee insurance policy rather than the NHBC scheme.