Topic 21 Flashcards
When a property that is subject to an equity share mortgage is sold, part of the sale proceeds will go to:
A. the borrower’s family
B. the lender or developer
C. a housing association
D. the solicitor
B. the lender or developer
Which of the following statements is true in relation to the Help to Buy Equity Loan scheme?
A. buyers must have a deposit of at least 10%
B. from the start of year 6, an annual fee of 1.75% of the equity loan will be charged.
C. it is exclusively for first time buyers
D. the maximum property purchase price is £500,000
B. from the start of year 6, an annual fee of 1.75% of the equity loan will be charged.
Which of the following might be regarded as a disadvantage of the equity share mortgage that has just been taken out by Ryan?
A. His payment will increase substantially at the end of the initial period.
B. He will lose some of the increase in value that his home accrues.
C. He will lose any increase in value that his home accrues.
D. He will pay a higher rate of interest throughout the mortgage term.
B. He will lose some of the increase in value that his home accrues.
Jennie has taken out a lifetime mortgage that meets the Equity Release Council’s rules. If she takes advantage of the scheme’s mortgage interest roll up facility, what are the implications?
A. her interest payments will gradually decrease year on year
B. her repayment vehicle may not be sufficient to repay the mortgage
C. the arrangement increases the debt that needs to be paid on her death
D. the arrangement might result in a negative equity situation
C. the arrangement increases the debt that needs to be paid on her death
Georgina pays a lower rate of interest on part of her mortgage than on the remainder because she has:
A. an equity share mortgage.
B. a shared ownership mortgage.
C. a home income plan.
D. deferred interest mortgage.
A. an equity share mortgage.
Nigel has taken out a new mortgage that requires him to pay monthly rent as well as mortgage payments. What type of mortgage does he have?
A. Deferred interest
B. Shared ownership
C. Equity share
D. LIBOR
B. Shared ownership
Which of the following is a difference between a home income plan and a home reversion scheme?
A. Interest rates on a home reversion scheme tend to be higher.
B. The plan holder retains property ownership with a home income plan.
C. The plan holder retains the right to remain in the property with a reversion scheme.
D. The reversion plan can provide cash and/or income.
B. The plan holder retains property ownership with a home income plan.
What is the maximum discount available to a tenant of a council house under the Right to Buy legislation?
A. 35%
B. 50%
C. 70%
D. 60%
C. 70%
Pavel and Irina are looking to buy a flat for £180,000 using the Government’s Help to Buy Equity Loan scheme. The minimum deposit they must put down is:
A. Nil
B. £9,000
C. £18,000
D. £36,000
B. £9,000
Where an equity release scheme is set up for joint borrowers using an income producing home income plan, what normally happens on the first death?
A. A lump sum is paid to the surviving borrower who must vacate the property and the house will be sold.
B. Income continues to the surviving borrower and the house is not sold.
C. The house is sold and income continues.
D. The house is sold and the surviving borrower’s income ceases.
B. Income continues to the surviving borrower and the house is not sold.
Ben has bought a 50% share in a shared ownership flat. Which of the following would not be contained in the lease?
A. the maximum share Ben could own by staircasing
B. if Ben wants to sell the flat, he must first offer it to the landlord
C. the terms on which Ben could rent out the flat
D. the landlord’s right to take court action to gain possession if Ben Falls behind with the rent.
C. the terms on which Ben could rent out the flat
Kristina has received confirmation that she can buy a flat under the government’s Help to Buy Equity Loan scheme. Which of the following statements is true?
A. Kristina plans to let the flat to her friends
B. Kristina will only be buying 50% of the flat
C. The equity loan can only be repaid when Kristina sells the flat
D. The flat must be valued at £600,000 or less
D. The flat must be valued at £600,000 or less
Barbara has just taken out a hybrid lifetime mortgage. This means that:
A. Barbara can choose to stop making mortgage payments in the future.
B. Barbara would have been subject to a full affordability assessment
C. Part of the mortgage is on a fixed rate and part on a variable rate
D. Part of the mortgage is on interest only basis and part is on a repayment basis.
A. Barbara can choose to stop making mortgage payments in the future.
Aaron and Sarah moved into their first local authority house in England in June 2017 as secure tenants. When will they first gain the right to buy their home?
A. June 2018
B. June 2019
C. June 2020
D. June 2021
C. June 2020
