CeMAP CeMAP - Certificate in Mortgage Advice and Practice Property Valuation and Surveys 1 — Questions and Answers
Question 1: What is the primary purpose of a mortgage valuation carried out by a lender?
- To protect the buyer from hidden defects
- To satisfy the lender that the property provides adequate security for the loan (Correct answer)
- To identify all structural issues in the property
- To establish the property's rebuild cost for insurance
Correct answer: To satisfy the lender that the property provides adequate security for the loan
A mortgage valuation is conducted for the lender's benefit to confirm the property is suitable security for the loan amount.
Question 2: Which type of property survey provides the most comprehensive assessment of a property's condition?
- Mortgage valuation
- Homebuyer Report
- Full Structural Survey (Level 3 Building Survey) (Correct answer)
- Desktop valuation
Correct answer: Full Structural Survey (Level 3 Building Survey)
A Full Structural Survey (Level 3 Building Survey) is the most thorough inspection and is recommended for older, unusual, or significantly altered properties.
Question 3: What does LTV stand for in the context of mortgage lending?
- Land Transfer Value
- Loan to Value (Correct answer)
- Lending to Vendor
- Liability Transfer Value
Correct answer: Loan to Value
LTV (Loan to Value) is the ratio of the mortgage amount to the property's value, expressed as a percentage.
Question 4: What is a 'desktop valuation' in the mortgage industry?
- A valuation conducted inside the property by a surveyor
- A valuation using comparable sales data without a physical inspection of the property (Correct answer)
- A valuation completed at the lender's head office
- A valuation method used only for commercial properties
Correct answer: A valuation using comparable sales data without a physical inspection of the property
A desktop valuation uses publicly available data and comparable sales without the surveyor visiting the property.
Question 5: Which of the following factors does NOT directly affect a property's market value?
- The property's location
- The property's physical condition
- The borrower's personal credit score (Correct answer)
- The size of the property
Correct answer: The borrower's personal credit score
A borrower's credit score relates to their personal creditworthiness, not to the market value of the property being purchased.
Question 6: Which professional must carry out a RICS-standard mortgage valuation?
- A licensed estate agent
- A solicitor or conveyancer
- A RICS-qualified Chartered Surveyor (Correct answer)
- A financial adviser
Correct answer: A RICS-qualified Chartered Surveyor
Mortgage valuations must be carried out by a RICS-qualified Chartered Surveyor who meets the standards set by the Royal Institution of Chartered Surveyors.
CeMAP CeMAP - Certificate in Mortgage Advice and Practice Property Valuation and Surveys 1
What is the primary purpose of a mortgage valuation carried out by a lender?