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Cemap 2 > Unit 3 > Flashcards

Unit 3 Flashcards

1
Q

What is likely to cause a downturn in the mortgage market?

A

A low rate of general inflation

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2
Q

Oxbridge building society intends to alter its lending policy and restrict its lending on residential mortgages to a maximum of 50% of its total lending activities. If it proceeds what will it need to do?

A

Convert to PLC status

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3
Q

To meet the fca definition of a home reversion plan, it must be for a specified period. The specified period must be at least how many years?

A

20 years

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4
Q

A satisfactory report on title would be a standard condition on what?

A

Mortgage offers

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5
Q

What must happen with an energy performance certificate before a property is marketed for sale?

A

Be commissioned

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6
Q

In relation to registered land, possessory title means what?

A

The owner or applicant could not produce the title deeds when the land was first registered

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7
Q

If a successful bid is made on a property at auction and the deposit has been paid. What are the implications if they cannot go through with the purchase?

A

The seller can keep the deposit and seek recompense if they later sells the property for a lower price

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8
Q

Are right to buy customers known as vulnerable customers?

A

Yes

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9
Q

What steps would a lender take if they discover that a borrower has allowed the property insurance on his mortgages property to lapse?

A

Pay the premium and charge it to the account

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10
Q

For a leasehold mortgage what will a lender want?

A

Lender will want 40 years plus the mortgage term

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11
Q

What is the magic number for commonhold & leasehold questions?

A

21

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12
Q

What does the commonhold & leasehold reform act 2002 enable?

A

Leaseholders to purchase freehold or to extend the lease up to max 90 years

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13
Q

If under the commonhold and leasehold reform act what are the requirements of the person wants to extend the lease?

A

Must be 2 or more flats
2/3 must be held on a large lease, originally granted in excess of 21 years
Must have been a tenant for 2 years

(Remember the numbers 2&21)

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14
Q

If under the commonhold and leasehold reform act what are the requirements of the person wants to buy the property?

A

A commonhold association must be formed

At least 50% of the leaseholders must agree to participate in purchase

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15
Q

What does a freeholder own?

A

The land

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16
Q

What is a flying freehold?

A

A flying freehold occurs where one freehold overhangs or projects into another. Flying freeholds are usually found in old properties and commonly exist above archways allowing access between properties or in cellars which encroach under another property

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17
Q

Can the freeholder refuse to sell the freehold to the leaseholder?

A

Yes

If it’s a converted property of 4 or fewer flats
If the freeholder owns 2 or more of the flats
Charitable housing trust
Lease is for commercial purposes

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18
Q

When can you get a waiver of premiums?

A

Only on life cover

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19
Q

In terms of title what is it that lenders want?

A

Absolute

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20
Q

What does an absolute title mean?

A

This is what lenders want, there is no question about the ownership of the property.

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21
Q

On unregistered land after ……..(how long) possessory title can be applied for?

What’s this called?

A

12 years

Squatters rights

22
Q

Oh registered land after ten years of occupancy what title do you receive?

A

Absolute

23
Q

Is all land currently registered?

A

No

24
Q

Who are BTLs owned by?

A

Limited companies

25
Q

A spv is like a what????

A

A buy to let which is limited company

26
Q

What can SPV/BTL claim on?

A

Mortgage interest in full as an expense

27
Q

Selling property for a SPV is liable to what tax?

A

Corporation tax

28
Q

Spv is basically a limited company that ways to get a mortgage

A

Simples

29
Q

If you transfer existing property into a spv what tax would it be liable for?

A

CGT

30
Q

What is securitisation?

A

Mortgages are packed together and sold as an asset

31
Q

For non residential property borrowers what will lenders want to be assured on for an SPV?

And where will these requirements be set out?

A

Companies powers to borrow

Memorandum of association

32
Q

What will a lender want to see when lending to trusts?

A

Trust deed

33
Q

Where are drawings found when lending to a partnership agreement?

A

Balance sheet

34
Q

What is Gazumping?

A

The vendor accepts a higher offer before exchange of contracts

35
Q

What is private treaty?

A

A sale usually done through the estate agent

36
Q

How much deposit is due immediately when selling at a public auction?

A

10% deposit

37
Q

A deposit paid at a public auction needs to be in what?

A

Bankers draft/Cash

38
Q

What is the modern method for an auction?

A

Online auction

39
Q

How much is the reservation fee for online auction?

A

5%

40
Q

For an online auction how long do you have to exchange?

A

28 days

41
Q

What is a mortgage trapped?

A

Mortgage before April 2014 and can’t transfer mortgage due to ‘affordability criteria’

42
Q

What does the right to buy scheme do?

A

Give tenants of council houses the option to buy the property they live in

43
Q

What does the right to acquire do?

A

Gives housing association tenants a discount on buying the property they live in

44
Q

What is a legal charge?

A

Gives the lender certain rights over the property while the mortgage is outstanding

45
Q

A legal mortgage deed contains what?

A

Mortgage terms

46
Q

A legal mortgage is defined as what?

A

Using a property as security for money borrowed

47
Q

Is a second mortgage low or high risk?

A

Higher

48
Q

Do second mortgages usually have lower interest rates?

A

No

49
Q

What are borrowers covenants?

A

Promises

50
Q

What does restrictive covenants run with?

A

The land

51
Q

What do positive covenants run with?

A

They don’t run with anything

Cemap 2 (6 decks)

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