Unit 4 Topic 13&14 Flashcards
Alexa has owned her flat for 5 years and is trying to sell it in order to buy a
new flat. The lease on her existing flat has 60 years to run but Alexa
cannot afford to pay for a lease extension. This has put off potential
buyers and the only interest has been from a cash buyer offering a very
low amount. What would be the best solution?
A to accept the cash offer
B to delay marketing the flat and borrow from family for a lease extension
C to sell the property by auction
D to apply for the lease extension and offer to assign the right to the buyer
D to apply for the lease extension and offer to assign the right to the buyer
On inspection of Tony’s proposed new property, the surveyor found evidence of
several small but long-standing cracks in some of the interior walls. They do not
appear to have worsened over the years. What is the surveyor likely to
recommend in view of the problem?
A A retention.
B That the lender declines the mortgage.
C That the lender should arrange a structural engineer’s opinion.
D It is unlikely to affect the lender’s decision.
D It is unlikely to affect the lender’s decision.
A mortgage advance has been provided in two stages six weeks apart. What
factor triggered this approach?
A A valuation that was lower than the agreed sale price.
B A town planning application that affects the property.
C A borrower’s poor credit rating.
D A retention clause in the survey report.
D A retention clause in the survey report
While negotiating the sale of his house, the vendor failed to disclose a dispute
with his neighbour, which was resolved some time ago. After completion, the
neighbour decided to resurrect the complaint with the new owner. What rights,
if any, does the new owner have against the vendor?
A Automatic compensation
B to take legal action
C None
D To reverse the purchase and recover all costs
B to take legal action
New properties covered by the NHBC members’ Buildmark scheme are
protected against all defects resulting from a builder’s non-compliance with
NHBC standards for a period of:
A 1 year
B 2 years
C 8 years
D 10 years
B 2 years
Greg and Annie bought their property in 2008, but its postcode area has now
been classified as at risk from flooding. The couple have applied for a home
insurance policy from an insurer that uses the Flood Re scheme. Which of the
following is true ?
A Greg and Annie must submit any claim direct to the Flood Re scheme
B The insurer can add the cost of the premium to pays to the Flood Re scheme
to Greg and Annie’s normal premium.
C The insurer cannot increase the excess on Greg and Annie’s insurance
premium to reflect the extra risk
D The property would not be eligible for the scheme
B The insurer can add the cost of the premium to pays to the Flood Re scheme
to Greg and Annie’s normal premium
Which one of the following is true in relation to a Home Buyer’s Report?
A It is limited in scope and designed to assess the adequacy of the security for
mortgage purposes and to highlight necessary repairs.
B The report must always include an energy efficiency rating.
C Although it is fairly limited in scope, it is likely that serious defects will be
identified.
D Most lenders and applicants consider the cost of such a report to be
prohibitive
C Although it is fairly limited in scope, it is likely that serious defects will be
identified.
Which of the following is true in relation to the undertaking of a full building
survey on a property?
A Such a survey must always be completed if the property is more than 50
years old.
B The commissioning of such a survey is always the responsibility of the
vendor prior to putting the property on the market.
C It guarantees full settlement of any insurance claims arising from any
subsequent discoveries of serious defects.
D Any defects are likely to be discovered and the borrower has recourse against
the surveyor in the event that he fails to identify and report them.
D Any defects are likely to be discovered and the borrower has recourse against
the surveyor in the event that he fails to identify and report them.
Which of the following is correct in relation to the contents of a basic valuation
report on a property?
A It will give the lender’s opinion on whether the purchase price is reasonable.
B Valuations for both mortgage and insurance purposes will be shown.
C The report will confirm that the property has been surveyed thoroughly.
D The stated market value of the property will always equate to its insurance
value.
B Valuations for both mortgage and insurance purposes will be shown.
Which of the following statements in respect of a basic valuation is correct?
A The report will usually only highlight any necessary repairs if the LTV ratio
is high.
B The report will confirm whether or not the agreed purchase price is
reasonable.
C The valuation must be carried out by a valuer independent of the lender.
D The valuation is on behalf of the lender but the applicant usually meets the
cost.
D The valuation is on behalf of the lender but the applicant usually meets the
cost.
Byron has been told that he will have to pay a marriage value when he extends
the lease on his flat. Which of the following is true?
A it means that the lease must have at least 80 years to run
B The marriage value will reduce as the lease term reduces
C The freeholder will be entitled to 50% of the marriage value
D The value will be determined by negotiation with the freeholder
C The freeholder will be entitled to 50% of the marriage value
The cost of a full building survey is most influenced by: A lender’s tariff of charges. B location of the property. C price of the property. D size of the property.
D size of the property.
Jack’s property has been given a reinstatement value that is higher than its
valuation for mortgage purposes. This is most likely to be because:
A it is above a high street shop.
B it is of unique design.
C its village location is quite remote.
D of Jack’s unique decorative style.
B it is of unique design.
Felicity wants to purchase a flat, for which she requires a mortgage. The flat has
a tenant with a tenancy agreement with the vendor. This means that Felicity is
likely to:
A be forced to take over the agreement.
B be turned down by most lenders.
C only be eligible for a commercial mortgage.
D pay a premium price for the flat.
B be turned down by most lenders.
Duncan is buying a Victorian house with the aid of a mortgage from Greenhill
Bank and has commissioned a full building survey from a reputable local firm.
Why might the bank also require him to pay for a separate valuation report
from its own, in-house valuer?
A Duncan’s surveyor is not known to the bank.
B It generates more profits for the bank.
C Because of the age of the property.
D Because of a low loan-to-value ratio.
A Duncan’s surveyor is not known to the bank.
