What must lender consider for further advance?
- Ability of client to pay back new level of borrowing
- Security offered for advance
Why must lender establish purpose of further advance request?
To classify loan according to:
- Whether it is regulated mortgage or not
- If it is not regulated, whether it is regulated or exempt under Consumer Credits Acts
Are second mortgages treated as regulated loans?
Yes and subject to MCOB
What is tacking?
- If borrower has already borrowed via second mortgage and seeking further borrowing, lender may seek postponement of second lender’s interest in order to tack new lending onto original thereby aggregating new loan
- Achieved by Deed of Postponement
What is a Deed of Further Charge?
If original deed does not permit further advances, it may be necessary to execute a new deed
What is difference between closed and open bridging?
- Closed: customer already sold a property and binding contract with purchaser
- Open: not yet secured sale
If partner takes over property, HMRC will take account of what?
- money paid to other party
- additional mortgage taken out
What is SDLT when property transferred from one spouse or partner to other?
- If spouse/RCP - nothing, if not: subject to SDLT on half of mortgage + additional
What is it called when all monies due under mortgage paid?
Redemption
What is portability?
Features, benefits and limitations applicable to current mortgage transferable to another home
Who is appointed when someone is sued for bankruptcy?
Trustee in bankruptcy
If local authority compulsory purchases some land, what compensation do they pay?
Market value of land acquired only
If mortgage used annual interest accounting system, when should a client make advance repayment?
Just before interest calculated
If IVA to be put in place, what % of creditors must agree?
Creditors representing 75% of debt by value to agree
