Unit 4 Flashcards
What is the minimum claim value for construction?
£1500
What does the nhbc build mark scheme provide?
protection against all defects in first 2 years caused by builders failure to meet NHBC standards
AND
A further 8 years insurance protection against the full cost of all damage known as the minimum claim value
What is premier guarantee?
Is an insurance similar to buildmark
What does LABC work with?
Local authorities and building control surveyors
What is the consumer code for home builders?
Seeks to reinforce the protection for consumers - kind of like the ombudsman
What do lenders need to see in terms of construction?
Planning permission
How many days does the neighbour consultation last for?
21 days
Can a neighbour overturn permitted developments?
No
Can the council overturn building regulations?
Yes
Do you need permission for anything that is listed?
Yes
What is a conveyancer similar too?
Solicitor
Who do conveyancers carry out legal work for?
Lender
When the ownership of property is transferred from a vendor to a purchaser, when does the transaction have to be registered within?
30 days - completion date
How much are the legal costs for bankruptcy and who pays these?
£5-£10
The lender
How much are the land registry fees for a property work £1m?
£910
How much are the land registry fees for a property that is £80,000?
£40
When are the land registry fees paid?
This is paid after completion
Can the stamp duty surcharge be reclaimed if a couple buy a second property and use this as their main residence and sell their exisiting property within 36 months?
Yes
If a couple are living together in a property owned by one person can the other get an exemption of the surcharge on stamp duty?
No
Can stamp duty be paid on a transfer of equity?
Yes
Anything between husband and wife is?
Tax free
What does MIGP stand for?
Mortgage indemnity guarantee premium
For a lending of over 75% what will a lender charge a client?
Higher lending charge
What charge is used to purchase a mortgage indemnity guarantee premium?
Higher lending charge
What does mortgage indemnity guarantee premium protect?
The lender in the event of a shortfall should repossession take place
How do you calculate the ‘migable amount’?
Work out the LTV percentage on the house valued
Work out the difference between that amount and the amount of the mortgage granted
Use the percentage charge given in question to times the migable amount
What is the migable amount?
The amount the lender will lend PROVIDED that there is a MIG in place
When is the migp called upon?
If the property has to be repossessed and is sold at a price less than the mortgage
Under the ABO guidelines how much does an insurer have to pay up to for MIGPs?
And who pays the remaining?
Pay out 80% of the claim
Remaining 20% is still owed by the borrower
What is the ABI?
Association of British insurers
What is subrogation?
The insurer has the right to sue the mortgagor for the return of any monies paid to the mortgage
Think of burning down tesco
What kind of security is MIG?
Additional
In terms of additional security what does a guarantor do?
A third party agrees to cover your loan with everything they own
What does limited guarantee cover up to?
Up to a percentage, not 100%
What is a guarantor subject to?
Affordability check
What is surety?
A third party puts up an additional piece of security to cover your loan
Can a lender chase you if the surety you have put on the line should it prove to be insufficient?
No
Can you use shares as an additional security on loans under surety?
Yes
What is it called when you put money in for collateral additional security?
Collateral deposit
Do collateral deposits again interest from a lender?
No
What’s the difference between surety and collateral additional security?
Surety a third party puts an additional piece of security
Collateral you put an additional piece of security
What are the three things that can mean a mortgage contact are void?
Mistake/misapprehension/misrepresentation
Duress/undue influence
Lack of capacity
People who act as guarantors or who put up surety will always be advised what?
Seek independent legal advice to avoid any possible claims of undue influence
What does is it mean if a mortgage contact is void because of a mistake?
The client believes he has borrowed money at one rate and the lender thinks he has lent it at a different rate
What two things can’t be assigned for additional security?
Isa
Personal pension
What is assignment for additional security?
When it’s assigned it now belongs to the lender, can be surrendered to help the borrower
What is deposited in terms of additional security?
Policy is deposited with lender. Lender gains and equitable right/interest. Can take proceeds at maturity but cannot be surrendered
For buildings and contents what are the lenders rights?
Require property to be insured
Interest noted on policy
Right to any claim
What is a flood re?
Insurer can pass on flood re premium and impose higher excess
Flood insurance is what kind of insurance?
True
What’s god about block policies?
Good cover but expensive
You cannot lose - all in
What are block policies similar too?
Unlimited insurance
When does a home have to be built before to be eligible for flood re insurance?
January 2009
How do you work out the average?
It’s what you insure your home for, if your property purchase cost is £80,000 you should insure for double that.
If you claim for a new roof for example for £20,000 and you’ve only insured your property for £80,000 then that’s 50% insurance meaning the insurer will only pay out for £10,000
An offer of advance is what?
Binding document
When can the mortgage offer be withdrawn?
False info is found
Applicants financial position changes
A change occurs to make the security less suitable
Who can recalll a mortgage?
Court
When does a mortgage begin?
On completion
What can offer lettters include?
General and special conditions
Would any retention be a special condition?
Yes
What will a compulsory order charge be called in the exam?
Airport extension plan
What is meant by a compulsory purchase order?
All land is held of the crown - the crown is taking back its land
What kind of people took out second charges?
Poor people
What is a clog on the equity of redemption?
Any clause put in to stop you
What is a mortgage vacation?
A mortgage payment vacation is a period of time in which you can stop making mortgage payments. Typically, these “vacations” are only available to those that have spent a considerable amount of time prepaying their mortgage each month; that is, paying more than the required amount.
What is a transfer of equity?
A transfer of equity occurs when a property’s owner adds or removes a person (or people) to or from the title on the home, altering the ‘ownership’ of the property from a legal perspective.
Who does the MCD apply too?
MCD applies equally to first and second charge mortgages
