Topic 2 Flashcards
Gurpreet and Sangita bought a buy-to-let flat in their joint names as business partners. They have a difference of opinion and dissolve their partnership, with Gurpreet continuing to run the business until they can sell their property.
In relation to the mortgage:
a. Gurpreet and Sangita can choose who will take responsibility for the mortgage.
b. Gurpreet and Sangita will each be responsible for half of the mortgage.
c. Gurpreet and Sangita will each be responsible for 100% of the mortgage.
d. responsibility for the mortgage now rests solely with Gurpreet.
c. Gurpreet and Sangita will each be responsible for 100% of the mortgage.
Three years ago, Callum bought his flat in joint names with his friend Ross, with the help of a joint mortgage. Ross has recently left the property permanently and is refusing to contribute to the mortgage payments.
Which of the following is true?
a. Callum has sole legal responsibility for the mortgage debt as only he occupies the flat.
b. Callum will only have to pay half of the mortgage payments and the lender will pursue Ross for the other half.
c. Ross is legally liable for half of the mortgage debt.
d. Both Callum and Ross remain legally liable for the whole mortgage debt.
d. Both Callum and Ross remain legally liable for the whole mortgage debt.
Tamara has been categorised by her mortgage lender as being a high-net-worth customer despite not having substantial assets.
This is most likely to be because:
a. her gross income is £20,000 per month.
b. her mortgage is guaranteed by her mother, who meets the high-net-worth criteria.
c. it is expected that she will inherit £5m from her father’s estate within two years.
d. the lender has identified that there is substantial family wealth.
b. her mortgage is guaranteed by her mother, who meets the high-net-worth criteria.
The FCA defines a high net worth customer as one with a minimum annual net income of £300k, or minimum net assets of £3m.
When trustees arrange a mortgage to buy a property for a beneficiary, the lender would always:
a. carry out a credit search on the trustees.
b. require evidence that the trust deed gives the trustees the power to borrow.
c. require proof of each trustee’s personal income.
d. require proof that the beneficiary is aged under 18.
b. require evidence that the trust deed gives the trustees the power to borrow.
Abigail, Barry and Jessica are partners in a limited liability partnership, and they have applied in the partnership’s name for a mortgage on their office building.
Assuming a mortgage is granted, which of the following is true?
a. Each partner will be liable for one third of the mortgage.
b. The partners can allocate responsibility for the mortgage between themselves.
c. The partners will be jointly and severally liable for the mortgage.
d. The partners will have no personal liability for the mortgage.
d. The partners will have no personal liability for the mortgage.
Gary is a trainee mortgage adviser, who started the role three months ago.
Assuming all other criteria have been met, at what point could a mortgage adviser treat him as a professional customer if he applies for a new mortgage to buy his first home?
a. Immediately.
b. In 6 months’ time.
c. In 9 months’ time.
d. In 12 months’ time.
c. In 9 months’ time.
Which of the following borrowers would not be classed as a vulnerable customer under MCOB rules?
a. Maddie, who is remortgaging to a lower rate to reduce her outgoings.
b. Marcus, who is exercising his right to buy his local authority-owned home.
c. Maria, who is entering into a sale and rent back arrangement.
d. Mike, who is considering a lifetime mortgage.
a. Maddie, who is remortgaging to a lower rate to reduce her outgoings.
Subject to the lender’s agreement, which of the following would be able to take out a new mortgage to purchase a property in London?
a. Diane, whose bankruptcy was discharged six months ago.
b. Jennie, whose bankruptcy order came into force six months ago.
c. Maria, who is 17 years of age and about to move in with her boyfriend with her parents’ consent.
d. Sue, for her 16-year-old nephew, using the power of attorney he hopes to set up.
a. Diane, whose bankruptcy was discharged six months ago.
Alec and Debbie bought their house with a joint mortgage when they married five years ago. They have recently divorced, with Debbie remaining in the house and with the original mortgage unchanged.
Which of the following statements is true?
a. Alec and Debbie are still jointly and severally liable for the mortgage.
b. Alec can withhold payment of his share of the mortgage, as it is now Debbie’s sole responsibility.
c. Alec is now responsible for only 50% of the mortgage payments.
d. Debbie can withhold payment of her share of the mortgage, as it is now Alec’s sole responsibility.
a. Alec and Debbie are still jointly and severally liable for the mortgage.
Which of the following is true in relation to lending for a partnership?
Partners in a:
a. business partnership have no liability for the debts of the partnership.
b. limited liability partnership cannot borrow without providing personal guarantees.
c. limited liability partnership have a direct liability for the debts of the partnership.
d. limited liability partnership have no direct liability for the debts of the partnership.
d. limited liability partnership have no direct liability for the debts of the partnership.
Malachy was granted a debt relief order six months ago. He now wants to obtain a mortgage to purchase his first property. Which of the following is true?
He:
can legally take out a mortgage now if he can find a lender that is willing to lend to him.
can only legally take out a mortgage in six months’ time.
can only take out a mortgage now if his current creditors agree to it.
will be unable to obtain a mortgage for at least the next 18 months.
Malachy can legally take out a mortgage now if he can find a lender that is willing to lend to him.
An IVA or DRO does not legally prevent an individual from taking out a mortgage, but lenders may be unwilling to consider an application.
From a legal point of view, who of the following would be able to personally take out a mortgage?
Chris, whose bankruptcy order was confirmed four months ago.
Dave, whose individual voluntary arrangement was completed last month.
Edith, who has lost mental capacity, and is the subject of a registered property and financial affairs lasting power of attorney.
Lucy, who is 17, in work and has inherited £50,000 from her grandfather to use as a deposit.
Dave, whose individual voluntary arrangement was completed last month.
