Topic 26 Flashcards
The MCOB rules cover the requirements for an illustration for a further advance to a Mortgage Credit Directive (MCD) regulated mortgage. Which of the following is true of such an illustration?
It:
a. is only required to show the total borrowing when the loan to value exceeds 70%.
b. must be based on the amount of the further advance only.
c. must be based on the new total lending only.
d. uses a different format from the illustration required for a new mortgage.
b. must be based on the amount of the further advance only.
Which factor is not typically considered by lenders when assessing an application for a further advance?
The:
a. borrower’s employment stability.
b. level of the borrower’s savings or investments.
c. property’s current market value.
d. property’s location and neighbourhood.
b. level of the borrower’s savings or investments.
Albert and Mona have approached their mortgage lender for a further advance to build an extension to their house.
Which of the following is true?
a. All house extensions are classified as permitted development and do not require planning consent.
b. The lender may advance the funds if Albert and Mona take out indemnity insurance instead of obtaining planning consent.
c. The lender would insist on seeing evidence of planning consent, if it is applicable, once the building work has been completed.
d. The local authority could insist on them undoing the work if planning consent was required but not obtained.
d. The local authority could insist on them undoing the work if planning consent was required but not obtained.
Andrew has applied for a further advance to build an extension to the front of his house, which faces the road.
The lender will need to:
a. confirm with the builder that it will be exempt from building regulations.
b. confirm with the local authority that it will be a permitted development.
c. see evidence of planning consent within 28 days of advancing the funds.
d. see evidence that the planned work has planning consent and meets building regulations.
d. see evidence that the planned work has planning consent and meets building regulations.
A solicitor is checking for legal charges on a registered property.
The priority of any charges is primarily determined by:
a. the size of each mortgage.
b. the term of each mortgage.
c. the type of mortgage deed used.
d. their date of registration.
d. their date of registration.
Jim and Paula have requested a further advance from their lender, the Eastern Counties Building Society.
Before agreeing to the request, Eastern Counties must carry out a:
formal assessment of the property value.
RICS Home Survey Level 1 Report using either its own valuer or an external valuer.
valuation using an external valuer.
valuation using its own valuer.
formal assessment of the property value.
George has set up a special purpose vehicle (SPV) to run his buy-to-let rental business, while his brother Tim runs his buy-to-let business as a sole trader.
Which of the following statements is true?
George and Tim will each be registered as owners of their respective rental properties at HM Land Registry.
George’s SPV will not have to pay the stamp duty land tax surcharge on buying a new property, but Tim will have to pay the surcharge.
George will be liable to income tax on any profit made by the business, while Tim will only be liable to income tax on his drawings from his business.
Tim would be liable to capital gains tax if he made a profit when selling his property, whereas George would not be personally liable to capital gains tax on a profit made on selling the SPV property.
Tim would be liable to capital gains tax if he made a profit when selling his property, whereas George would not be personally liable to capital gains tax on a profit made on selling the SPV property.
