Topic 14 Flashcards
A condition in a mortgage offer to carry out certain repairs within a specified timescale is known as:
A. a positive covenant
B. a retention
C. a restrictive covenant
D. an undertaking
D. an undertaking
On inspection of Tony’s proposed new property, the surveyor found evidence of several small but long-standing cracks in some of the interior walls. They do not appear to have worsened over the years. What is the surveyor likely to recommend in view of the problem?
A. A retention.
B. That the lender declines the mortgage.
C. That the lender should arrange a structural engineer’s opinion.
D. It is unlikely to affect the lender’s decision.
D. It is unlikely to affect the lender’s decision.
A mortgage advance has been provided in two stages six weeks apart. What factor triggered this approach?
A. A valuation that was lower than the agreed sale price.
B. A town planning application that affects the property.
C. A borrower’s poor credit rating.
D. A retention clause in the survey report.
D. A retention clause in the survey report.
A mortgage advance has been agreed but some of the funds are not paid until two months after completion. What factor triggered this approach?
A. A town planning application had to be confirmed.
B. Repairs were required.
C. The borrower’s poor credit rating.
D. The lender could not gain confirmation of the borrower’s income until that point.
B. Repairs were required.
A basic valuation for mortgage purposes is usually paid for by the:
A. mortgagee
B. mortgagor
C. vendor
D. estate agent
B. mortgagor
New properties covered by the NHBC members’ Buildmark scheme are protected against all defects resulting from a builder’s non-compliance with NHBC standards for a period of:
A. 1 year
B. 2 years
C. 8 years
D. 10 years
B. 2 years
Trevor is seeking a loan from a building society to purchase an eighteenth century cottage. Which one of the following statements is TRUE in relation to the survey?
A. A full building survey is always compulsory for a property of this age.
B. A basic valuation is mandatory, but he would be wise to have a homebuyer’s report.
C. A homebuyer’s report is compulsory given the age of the property.
D. A homebuyer’s report is compulsory given the age of the property, but he would be wise to have a full structural survey.
B. A basic valuation is mandatory, but he would be wise to have a homebuyer’s report.
Which one of the following is true in relation to a Home Buyer’s Report?
A. It is limited in scope and designed to assess the adequacy of the security for mortgage purposes and to highlight necessary repairs.
B. The report must always include an energy efficiency rating.
C. Although it is fairly limited in scope, it is likely that serious defects will be identified.
D. Most lenders and applicants consider the cost of such a report to be prohibitive.
C. Although it is fairly limited in scope, it is likely that serious defects will be identified.
Which of the following is true in relation to the undertaking of a full building survey on a property?
A. Such a survey must always be completed if the property is more than 50 years old.
B. The commissioning of such a survey is always the responsibility of the vendor prior to putting the property on the market.
C. It guarantees full settlement of any insurance claims arising from any subsequent discoveries of serious defects.
D. Any defects are likely to be discovered and the borrower has recourse against the surveyor in the event that he fails to identify and report them.
D. Any defects are likely to be discovered and the borrower has recourse against the surveyor in the event that he fails to identify and report them.
Which of the following is correct in relation to the contents of a basic valuation report on a property?
A. It will give the lender’s opinion on whether the purchase price is reasonable.
B. Valuations for both mortgage and insurance purposes will be shown.
C. The report will confirm that the property has been surveyed thoroughly.
D. The stated market value of the property will always equate to its insurance value.
B. Valuations for both mortgage and insurance purposes will be shown.
Which of the following statements in respect of a basic valuation is correct?
A. The report will usually only highlight any necessary repairs if the LTV ratio is high.
B. The report will confirm whether or not the agreed purchase price is reasonable.
C. The valuation must be carried out by a valuer independent of the lender.
D. The valuation is on behalf of the lender but the applicant usually meets the cost.
D. The valuation is on behalf of the lender but the applicant usually meets the cost.
Which of the following facts might enable a borrower to take successful action against a valuer regarding a basic valuation?
A. The valuation given was later proven to be higher than the market value at that time
B. The valuer carried out a superficial inspection
C. The valuer did not give enough prominence to the disclaimer relating to the superficial nature of the inspection
D. The valuer did not identify a problem with the rafters in the roof space
C. The valuer did not give enough prominence to the disclaimer relating to the superficial nature of the inspection
The cost of a full building survey is most influenced by:
A. lender’s tariff of charges.
B. location of the property.
C. price of the property.
D. size of the property.
D. size of the property.
Jack’s property has been given a reinstatement value that is higher than its valuation for mortgage purposes. This is most likely to be because:
A. it is above a high street shop.
B. it is of unique design.
C. its village location is quite remote.
D. of Jack’s unique decorative style.
B. it is of unique design.
A contract between the mortgage applicant and the surveyor is created in the case of a:
A. basic valuation.
B. home buyer’s report.
C. basic valuation and a home buyer’s report.
D. basic valuation but not a home buyer’s report.
B. home buyer’s report.
