Are consumer or business BTL’s covered under FCA’s definition of regulated mortgage?
- consumer BTL regulated
- business BTL not regulated
If a ltd company enters into a mortgage, who is mortgage enforceable against?
- Against company, not directors or shareholders
What is a remortgage?
- replacement loan with a new lender, who will apply similar criteria so borrowers will need to pay for valuations and other costs
What is a Right To Buy?
Someone who lives in council home for qualifying minimum time has right to buy at substantial discount
How long must someone have been in council house in order to buy via Right To Buy?
- three years
How is discount calculated on Right To Buy?
- Calculated on number of years tenant has been council tenant and tenant does not have to live in same house over that period
- 3 - 5 years: 35% house, 50% flat
- after 5 years increased by 1% each year house, 2% each year flat
- max discount: £87,200 England, £116,200 London
What is a Help To Buy Equity Loan?
- Newly built home can be purchased with at least 75% cost met by mortgage and 5% deposit
- Up to 20% paid for by Gov through equity loan
- Fees not charged for first five years of loan
Who does not have legal capacity to borrow?
- undischarged bankrupts
- mentally incapacitated
- minors
Is a Business Loan regulated (purchasing residential property to raise capital to invest in business)?
yes, providing business is unincorporated
What are examples of semi-commercial mortgages?
- public houses;
- bed and breakfast establishments;
- doctor’s surgeries;
- shops and offices; and
- workshops and studios.
What are commercial mortgages? Are the subject to MCOB?
- Loans secured on land that will not be used for residential purposes
- Not subject to MCOB regulations
What rules surrounding funding are Building Societies subject to?
- 50% raised from retail sources
- 75% of commercial assets must be mortgages secured on land for residential use
What is securitisation?
- process through which funds are raised in the secondary market by issuing mortgage-backed securities.
What is correspondent lending?
- process whereby the firm that deals directly with the borrower is not the one actually providing the funds for the loan
If owner wishes to sell property within ten years of Right To Buy purchase - what must they do?
Offer to old landlord (council), if does not agree within 8 weeks, can sell on open market
Is a commercial mortgage subject to MCOB?
No
