What Does Joint tenancy mean when applying for a mortgage?
Means that everyone on the mortgage is 100% liable to repay the loan in all circumstances.
Can a commercial mortgage be offered to just a business?
No, a commercial mortgage can be offered to either a company or to an individual, but it will not be regulated.
What are the 3 P’s?
person, property and purpose.
How long is bankruptcy kept on a persons credit file?
6 Years from the declaration of Bankrupcy.
Where does the lasting power of attorney need to be registered?
An LPA needs to be registered with the Office of the Public Guardian before it becomes effective.
Mortgages taken out by individuals for business purposes are regulated and subject to MCOB if:
the borrowing is secured by a legal charge on a property where at least 40% of the land is used as a residence (the standard definition of a regulated mortgage); and
the sole purpose of the mortgage, remortgage or further advance is to raise funds for use by a small business (ie one with turnover of less than £1m per year).
Are mortgages lending to a limited liability partnership regulated. Yes/No
No
What are the four ‘key drivers’ that could cause vulnerability.
Health - health conditions or illnesses that affect the ability to carry out day-to-day tasks.
Life events - such as bereavement, job loss or relationship breakdown.
Resilience - low ability to withstand financial or emotional shocks.
Capability - low knowledge of financial matters or low confidence in managing money (financial capability).
Which of the following individuals would be considered a ‘mortgage prisoner’?
Sarah, who wishes to move to a new property, but is unable to find a lender willing to approve a new mortgage due to her low credit score.
Emma, who wants to increase her borrowing to fund home improvements, but whose existing lender refuses to lend to her due to lack of sufficient equity.
Jai, who wants to switch to a different mortgage at a lower interest rate but is prevented from doing so because he fails to meet the affordability requirements.
Jai would be considered a ‘mortgage prisoner’ because he has a regulated mortgage and is unable to change to another arrangement due to MCOB affordability requirements.
How does the government support FTB
Government efforts to support first-time buyers include planning rules requiring affordable housing to be included in new developments.
How do specialised mortgage houses raise funds?
Specialised mortgage houses are funded from the wholesale market and lend on a centralised basis.
An undischarged bankrupt cannot own property. True or false?
False. An undischarged bankrupt can own property, although the trustee in bankruptcy may take it to pay their debts. An undischarged bankrupt cannot acquire an interest in property, which means they cannot buy property while undischarged.
Before agreeing to lend to trustees, a lender must establish that the trustees have authority to borrow for the proposed transaction under the terms of the trust deed. True or false?
True. Before agreeing to lend to trustees, a lender must establish that the trustees have express authority to borrow for the proposed transaction under the terms of the trust deed.
Which of the following would have a regulated mortgage?
a) Colette, who with her limited liability partners, wishes to raise money for their business, secured on their business property, 50% of which is a residential flat.
b) Christine, who is in a business partnership with her husband and wishes to raise money on their personal residence to expand their business, which has annual business turnover of £450,000.
c) Craig, who is a sole trader who wishes to raise money to buy equipment for his business, which has annual turnover of £1.2m.
B) Mortgages to limited liability partnerships are not regulated, but mortgages to partners in a traditional partnership are regulated, subject to the property meeting the criteria for a regulated mortgage contract. Craig’s mortgage is not regulated because his business turnover is over £1m.
A joint mortgage means that the borrowers are only liable for their share of the full amount of the loan. True or false?
False. If two or more people take out a mortgage, the mortgage deed (the contract) makes them jointly and severally liable for that loan. This means all parties are individually liable for the whole amount of the loan, not just their ‘share’ of it.
