Topic 3 Flashcards
Harry has a regulated mortgage on his new family home.
This means that the percentage of the home that is used for residential purposes by Harry and his family must be at least what minimum?
a. 20%.
b. 25%.
c. 40%.
d. 50%.
c. 40%.
Grant has decided to arrange a mortgage on the house he has inherited from his father. This is so he can carry out some refurbishments and then let it for a year or so until he feels able to sell it. He owns his own home but has no investment properties.
Under normal circumstances, the mortgage will be:
a. a commercial mortgage.
b. a consumer buy-to-let mortgage.
c. a Mortgage Credit Directive (MCD) exempt mortgage.
d. an investment buy-to-let mortgage.
b. a consumer buy-to-let mortgage.
To meet the FCA definition of a home reversion plan, where there is a specified term, this must be for a period from the start of the arrangement for at least:
a. 10 years.
b. 15 years.
c. 20 years.
d. 25 years.
c. 20 years.
Which of the following is true?
An FCA regulated mortgage contract is:
a. subject to the Consumer Credit Acts if it exceeds £25,000.
b. exempt from the Consumer Credit Acts.
c. subject to the Consumer Credit Acts if it is taken out for business purposes.
d. exempt from the Consumer Credit Acts if the borrower signs a disclaimer.
b. exempt from the Consumer Credit Acts.
Which of the following organisations has regulatory powers in relation to the Consumer Credit Acts of 1974 and 2006?
The:
a. Competition and Markets Authority (CMA).
b. Financial Conduct Authority (FCA).
c. Financial Ombudsman Service (FOS).
d. Prudential Regulation Authority (PRA).
b. Financial Conduct Authority (FCA).
Alberto took out a second charge loan on his house in 2014. What is the current regulatory status of the loan?
It is:
a. not a Financial Conduct Authority regulated loan.
b. subject to Financial Conduct Authority regulation under MCOB rules.
c. subject to Financial Conduct Authority regulation under the Consumer Credit Act 2006.
d. subject to Prudential Regulation Authority regulation under the Consumer Credit Act 2006.
b. subject to Financial Conduct Authority regulation under MCOB rules.
Harry has a regulated mortgage on his new family home.
This means that the percentage of the home that is used for residential purposes by Harry and his family must be at least what minimum?
a. 20%.
b. 25%.
c. 40%.
d. 50%.
c. 40%.
The Beneficial Building Society has launched a mortgage product aimed at helping older borrowers to raise equity from their property.
Which of the following conditions would prevent it being classified as a regulated lifetime mortgage?
a. It is an interest-only mortgage.
b. It is only available to borrowers over the age of 60.
c. The capital is only repayable on the borrower’s death or move into residential care.
d. The capital must be repaid in equal instalments over the term.
d. The capital must be repaid in equal instalments over the term.
Jack has inherited a flat from his uncle and wishes to arrange a mortgage on it to cover the cost of refurbishment, with a view to letting it, before making a decision about selling it.
The mortgage would be a:
a. business buy-to-let mortgage.
b. consumer buy-to-let mortgage.
c. mortgage credit directive loan.
d. second-charge loan.
b. consumer buy-to-let mortgage.
Which of the following loans would not be subject to the FCA’s Mortgages and Home Finance: Conduct of Business (MCOB) rules?
Gavin, who is arranging a mortgage to buy a property equally split between a flat for his family and a shop to house his new business venture.
James, who is remortgaging his family home to raise money for a loft extension.
Imran, who is arranging a mortgage on a three-storey factory building with a small self-contained caretaker’s flat on the top floor.
Su Li, who is buying a two-bedroom flat for her elderly mother to live in.
Imran, who is arranging a mortgage on a three-storey factory building with a small self-contained caretaker’s flat on the top floor.
Which of the following types of mortgage application is most likely to be exempt from the requirements of the Mortgage Credit Directive (MCD)?
A flexible mortgage.
A lifetime mortgage.
A second charge mortgage.
An interest-only mortgage.
A lifetime mortgage.
Which of the following would not be a potential breach of the Consumer Protection (Amendment) Regulations 2014 when dealing with a potential buyer?
Describing a property with a public right of way through its garden as being private.
Exaggerating the property dimensions.
Failing to disclose the property’s existing electricity supplier.
Omitting details about a faulty damp proof course.
Failing to disclose the property’s existing electricity supplier.
