Topic 15 - Other factors that affect the lending decision Flashcards
Sarah and Sally own a semi-detached house. The gate to their medium-sized front garden opens on to the pavement that runs parallel to the road. Which of the following would require planning consent? Select all that apply.
A) A loft extension measuring 35 cubic metres.
B) An extension to the front of the property.
C) A loft extension adding three feet to the existing roof height.
D) Converting the attached garage to a living room.
E) A single-storey rear extension measuring 3m from the original rear wall.
F) A two-storey rear extension ending 5.5m from their garden fence.
B, C, F.
A loft extension measuring 35 cubic metres: permission not required for a semi-detached house if the loft extension does not exceed 40m3.
An extension to the front of the property: permission required as the extension will make the front of the property closer to the highway than before.
A loft extension adding three feet to the existing roof height: permission required as the extension will be higher than the highest part of the existing roof.
Converting the attached garage to a living room: permission not required as converting a garage internally does not add to the size of the building.
A single-storey rear extension measuring 3m from the original rear wall: permission not required on a single-storey extension projecting from the rear wall of the original house wall by up to 3m on a semi-detached property.
A two-storey rear extension ending 5.5m from their garden fence: permission required on two-storey extensions closer than seven metres to a rear boundary.
Which of the following is exempt from building regulations?
Cavity wall insulation in a detached house.
Underpinning foundations on a property suffering from subsidence.
Detached 20m2 garage located 3m from the property boundary.
C - Both cavity wall insulation and underpinning are subject to building regulations. A detached garage under 30 square metres in floor area and built at least one metre from the boundary of a property is exempt.
Keith and Helen wish to make several changes to their house, a Grade II* listed building in Devon. In terms of permission to carry out the work, they must:
apply first to their local planning authority.
apply first to Historic England.
first consult with the Department for Communities and Local Government.
apply first to their local planning authority - They must first apply to their local planning authority, which may then consult with Historic England.
Which of the following would be a potential disadvantage of a homeowner using a ‘rent-a-roof’ scheme to take advantage of renewable energy?
A future buyer would be bound by the terms of the lease, which may deter them from buying.
The homeowner is responsible for ongoing maintenance of the panels.
The homeowner does not receive a significantly discounted rate on the electricity generated.
A - The company offering the ‘rent-a-roof’ scheme will have a legal lease to use the roof for 20–25 years and the lease will stay with the property. The company is responsible for maintenance of the panels. The homeowner receives a significantly discounted rate on the electricity generated; in some schemes the electricity is free.
What is the legal status of a mortgage indemnity guarantee (MIG) policy?
It is a contract between the borrower and the insurer that provides protection for the borrower.
It is a contract between the lender and the insurer that provides protection for the lender.
It is a contract between the borrower and the lender that provides protection for both parties.
B - Although usually paid for by the borrower, a MIG is an insurance contract taken out by the lender with the insurer to protect it in the event of default.
A borrower providing security for a mortgage by signing over the benefits of a life assurance policy to the lender for the duration of the loan is called:
subrogation.
deposit.
assignment.
assignment - Assignment involves the policyholder signing over the benefits of the life policy to the lender for the term of the mortgage. It gives the lender certain rights, including the right to surrender the policy if the borrower fails to make mortgage payments.
Which of the following would the FCA not consider acceptable components of a lender’s mortgage exit fee? Select all that apply.
A - Interest penalty.
B - Deed release fee.
C - Staff processing costs.
D - Proportion of the lender’s lost income.
E - Land Registry charges.
F - Proportion of the lender’s general overheads.
A, D & E - Interest penalties and the lender’s potential lost income are not acceptable components of a mortgage exit fee.
Which of the following buyers would qualify for the first-time buyer exemption from stamp duty land tax (SDLT) when buying a property now? Select all that apply.
A - Gary, who is buying his first property with the help of a deposit funded by his mother using equity release on the family home.
B - Brian, who sold his flat five years ago and has rented since.
C - Alison, who is buying a flat with her father, who jointly owns the family home.
D - Manuel, who sold his apartment in Spain to move to the UK three years ago.
E - Mike, who is buying his first flat with a guarantee from his father secured on his house.
F - Grace, who is buying a shared-ownership flat and has opted to pay SDLT in stages.
A & E - A first-time buyer is defined as someone who has never owned an interest in property before, anywhere in the world. For joint purchasers, both must meet the definition. Using a guarantee secured on someone else’s property, or the proceeds of equity release from someone else’s property, would not affect the right to the exemption. It is the status of the buyer that counts, not the type of mortgage or funding arrangement
SDLT applies in Scotland. True or false?
False. Scotland has Land and Buildings Transaction Tax (LBTT).
Linda and Joey have bought a home in Lancashire following Linda’s job change. They have yet to sell their previous home in Kent. What is the position regarding stamp duty land tax (SDLT)?
They will pay the standard rate of SDLT on the purchase of their Lancashire property.
They will have to pay the SDLT surcharge on their Lancashire property but can claim a refund if they sell their Kent property within 36 months.
They will have up to 36 months to sell their Kent property to avoid paying the SDLT surcharge.
B - If a homeowner buys a property intended for use as their main home before selling their existing home, they will have to pay the SDLT surcharge but can claim a refund of the surcharge if they sell their original property within 36 months.
Which of the following would not be deemed a ‘permitted development’?
A two‑storey extension 2m deep.
A barn conversion.
A loft extension of 40m3.
Internal conversion of a garage.
A barn conversion.
Which of the following would be exempt from building regulations?
A loft conversion.
A detached garage with a floor area of 20m3.
A 25m3 extension.
Cavity wall insulation.
A detached garage with a floor area of 20m3.
Local authorities generally give retrospective planning consent if all their requirements have been met. True or false?
False: there is a strong chance that local authorities will not grant retrospective planning consent. Taking down an ‘illegal’ extension can reduce a property’s value, so lenders require confirmation that all the relevant permissions have been obtained.
Converting an attached garage internally to create a living room of the same size would not usually require planning consent. True or false?
True: as long as the building is not increased in size, converting a garage internally will not usually require planning consent.
A rent‑a‑roof scheme contract for solar panels is automatically terminated if the property is sold. True or false?
False: the scheme continues for the length of the contract, regardless of a change of ownership of the property.
