Topic 1 Flashcards
Zhou needs upfront funding to secure a property transaction and is worried he might lose the deal if he cannot act quickly.
He would most likely choose which financial solution?
a. A long-term bank loan.
b. An overdraft facility.
c. Bridging finance.
d. Peer-to-peer lending.
c. Bridging finance.
What is securitisation?
a. A collection of mortgage assets repackaged and sold by the lender.
b. A mortgage backed by a guarantor.
c. A portfolio of stocks and shares used as a repayment strategy.
d. An insurance policy taken out by the lender to protect high loan to value advances.
a. A collection of mortgage assets repackaged and sold by the lender.
Alan is a mortgage adviser.
For which of the following clients would he be most likely to recommend a mortgage from a sub-prime lender?
a. Anna, who wishes to borrow 90% of the property value.
b. Chris, a 22-year-old trainee solicitor.
c. Julie, an employee with 12 months’ employment history.
d. Ryan, who has a recent county court judgment against him.
d. Ryan, who has a recent county court judgment against him.
A buyer is waiting for their previous property to sell but has already found their next dream home.
They would most likely consider which option to secure the purchase without waiting?
a. A buy-to-let mortgage.
b. A secured personal loan.
c. Bridging finance.
d. Government grants for homebuyers.
c. Bridging finance.
Which of the following is most likely to affect interest rates in the UK economy?
a. An increased level of government borrowing.
b. House price inflation.
c. Taxation revenues.
d. The level of commercial debt.
a. An increased level of government borrowing.
Oxbridge Building Society intends to alter its lending policy and restrict its lending on residential mortgages to a maximum of 50% of its total lending activities.
If it proceeds, it will need to:
convert to plc status.
have its business plan agreed by the Prudential Regulation Authority.
obtain approval from the Financial Conduct Authority.
seek a positive ballot of 75% of its members.
It would need to convert to plc status.
Building societies must still devote a minimum of 75 per cent of their total lending activities to residential mortgages, although they can convert to plc status if they wish to enjoy the same freedom as banks.
