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Mortgage and Loan Finance The Hibernian Catholic Benefit Society and Hibernian Credit Union offer a range of loans to their members at interest rates and fees that are often below those of banks and finance companies. The following summarises the loans that are available: Housing Loans The maximum amount that can be borrowed is 75% of valuation of freehold security property and 60% of valuation of leasehold security property. The valuation must be substantiated by Quotable Value NZ or registered valuation to the satisfaction of the Society’s Trustees. Maximum term available is 25 years with table repayments covering principal and interest. An interest only option is available for 2 years with the loan to be then be amortized in full over the remaining term. Early repayment of principal will be accepted in multiples of $1,000 without penalty. Security for the loan must be a registered first mortgage in favour of the Society, or Credit Union, taken over the property that must be occupied by the applicant. Adequate fire and earthquake cover must be arranged. Second mortgage security will be considered on its merits. Current interest rate applying to first mortgage housing loans is shown on the home page. Hibernian Society Life Policy Loans Members who have a life assurance policy with the Society have an automatic entitlement to borrow up to 90% of the net surrender value of their Hibernian life policy, to be used for any purpose. Maximum term is determined by the expiry date of the policy, but table repayments over 5 years maximum covering principal and interest are preferred. Interest only payments are an option with the principal to be repaid from proceeds of the maturing policy or earlier at the member’s option. Security for these loans is a charge over the Hibernian Society life policy. Current interest rate is shown on the home page. There are no fees for this type of loan. Credit Union Personal Loans The Hibernian Credit Union provides personal loans to members for various purposes. The maximum amount that can be borrowed on an unsecured basis is $3,000, although a greater amount will be considered against suitable security (eg life policy, motor vehicle). Maximum term for repayment of these loans is 5 years with table repayments covering principal and interest. Current interest rate applying to personal loans is shown on the home page. Unsecured borrowers are encouraged to contribute to a debt protection fund that enables them, in times of sickness, to make a claim upon the fund for loan repayments for up to six months. Availability for a claim is once every six years, on production of a doctor’s certificate stating incapacity to work. The contribution is a one-off payment of 1% of the amount of the loan which can be added to the loan at the outset. Home Equity Loans These loans are available to members who wish to utilise the equity in their own unencumbered residential house property. The purpose of the loan is at the discretion of the member and could be used for such things as alterations, additions or improvements to the home, a replacement car, new furniture, medical costs, travel, etc. The maximum amount that can be borrowed is 30% of valuation of security property or $30,000 whichever is less, substantiated by valuation. Life expectancy tables are also used where interest is to be capitalised. Repayment of principal is upon a pre-determined date, or sale of the home whichever occurs first, although early repayment will be accepted in multiples of $1,000 without penalty. There are two options for the payment of interest. Interest only is paid during the term of the loan for those members able to meet the interest cost, but interest can be capitalised for those with insufficient income. That capitalised interest is then paid along with repayment of the principal when the home is sold. The structure of the capitalised interest loan means that it is unlikely to be much use or benefit to younger members. Security for the loan must be a registered first mortgage in favour of the Society, taken over the property that must be occupied by the member. Adequate fire and earthquake cover must be arranged. Current interest rates applying to home equity loans are shown on the home page. The actual rate applied will depend on whether interest payments are being made or interest is being capitalised. Investment Property Loans Loans for the purchase or refinance of residential housing property for occupation by tenants (investment purposes), and cost of alterations, additions and improvements to that property. The amount and term available is the same as for housing loans. Interest rate is generally 1% above that applied to housing loans secured by first mortgage. Security for the loan must be a registered first mortgage in favour of the Society, taken over existing residential housing property that must be occupied by the member and/or the investment property being purchased. Adequate fire and earthquake cover must be arranged. Second mortgage security will be considered on its merits. Commercial Loans Commercial loans will be considered on their merits. Fees and Charges A loan management fee of 1% of the amount being borrowed (to a maximum fee of $500 for housing loans) is applied by the Society and the Credit Union. This fee can be added to the loan. Members offering property as security will also need to meet the cost of solicitors fees for the preparation of mortgage documentation and the cost of registered valuation, although these costs may also be added to the loan. There may also be other costs associated with the registration of security such as a charge over a motor vehicle. Normal Loan Criteria Applies The above is a summary only intended for the information of loan applicants. It is not intended to be relied upon by any loan applicant or to create any rights in respect of any loan application.
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