Lifetime
Mortgages
Lifetime
Mortgages are provided by Seniors Finance Ireland Limited
which is a wholly
owned subsidiary of Shared Home Investment Plan p.l.c.
(S.H.I.P.) Please note that the
information contained within this brochure is accurate
at the time of printing (August,
2006) and is subject to change without notice. Lifetime
Mortgages are subject to
eligibility criteria and terms and conditions apply. If
you have any questions or would
like additional information please call us on 1890 60 70
80 or contact your broker.
S.H.I.P.
offers two types of Lifetime Mortgage. Under each type
there are no monthly repayments to be made and interest
simply accumulates for life.
Lifetime
Mortgage (1) Interest Rate Fixed for Life
This product is designed for those clients who want the
certainty of knowing that they
are guaranteed a rate of interest that can never change
regardless of what happens to
market interest rates. The interest rate on this product
is 6.95% APR. Remember this
product is designed to run for the life of the applicant
and there may be an additional
cost incurred if it is repaid early (See: “Consumer
Credit Act Notices”).
Lifetime Mortgage (2) Interest Rate Variable with Ceiling
This product is more suitable for those who want to have
the option of paying the loan off
early, for example after seven or eight years. The interest
rate on this product is 5.95%
APR. This is a variable rate of interest and it can rise
if there is an increase in general
interest rates (“ECB rates”). However, you
are guaranteed that it can never rise by more
than 2% over the rate at the time of taking out the mortgage.
So, in this case, while the
loan may commence at 5.95% APR, the interest rate on the
loan can never rise higher than
7.95% APR. This loan can be repaid after 5 years without
any additional cost i.e. capital
and rolled up interest can be repaid. However, it is not
designed to be repaid in the initial
5 year period as additional costs may be incurred in doing
so (See: “Consumer Credit Act
Notices”).
Remember,
the above products are designed as Lifetime Mortgages
and there are no
monthly repayments to be made. The loans are repaid on
the death of the mortgagors or
where a property is left vacant for 12 months or more (for
example, in the case of longterm
nursing care). At this stage the family or estate have
the first option to repay the
loan or, alternatively, the property is sold to repay the
loan with the remaining funds going
to the estate.
How much can I borrow?
The amount
that you can borrow depends upon your age and the open
market value of
your home. The amount you can borrow is determined by the
age of the younger
applicant in the case of couples or other joint applications.
If
we take a loan of €100,000 and assume a property
value of €500,000, the table
above illustrates the repayment that would be owed at
the end of each year over a 20
year period (interest and capital). Amount Borrowed on
Jan 1st, Year 1 - €100,000.
Interest Rate 6.95% APR.*
Therefore, for example, the amount left if the loan is
repaid after year 20 depends
on what the value of the property is. In this case, if
the loan of €383,521 was repaid
the amounts underlined would be left.
Please
note that the term shown above is a 20 year term used
for illustration purposes
only. In this example the rate is fixed for the life or
lives of the customers so interest will
continue to accrue at the same fixed rate until the last
survivor dies and the loan is repaid.
*Rate is accurate at time of printing and is subject to
change without notice.
When are Lifetime Mortgages repayable?
No
repayment occurs until one of the following events
happens:
-
You leave your home for a period of 12 months (consecutive)
or more (for example in
long-term nursing care), or
- You die (in the case of a couple, the last survivor
dies).
When
one of the above happens, your Lifetime Mortgage must
be repaid. This can be
repaid by any means but it will normally entail selling
the property. Where the property is
sold, the Lifetime Mortgage is repaid and the remainder
of the sale proceeds will revert to
your estate.
The complete Terms and Conditions will be detailed in the
legal documentation which your
solicitor will explain to you.
Can
I repay or partially repay my Lifetime
Mortgage early?
Lifetime
Mortgages are designed to run for the duration of the
life/lives of the Applicant(s)
and would normally only become repayable on the occurrence
of one of the two events as
outlined above. However you can make early repayments but
additional costs may be
incurred. If you are quite sure that you will want to pay
the loan off early, then you should
be aware that the Lifetime Mortgage (2) can be repaid after
5 years without any additional
cost. With the Lifetime Mortgage (1), because the interest
rate is fixed for your expected
life, if you decide to repay the loan in the absence of
one of the above events happening,
then an additional cost may apply.
This is something you should think about at this stage.
Lifetime Mortgages are designed as
a long term loan. Further information is given under the
section ‘Consumer Credit Act
Notices’.
How are Lifetime
Mortgages repaid?
No repayments
are made during the life of the loan. Instead the interest
accumulates and
is added to the loan balance as illustrated herein.
Correspondence
relating to your Lifetime
Mortgage
Each year
you will be sent a statement which will show you the
transactions that have
taken place on your Lifetime Mortgage account for the previous
year. If at any time you
have any questions regarding your loan our staff will be
happy to answer them for you.
Negative
Equity Pledge
This
means that when the time comes to repay the loan and
accrued interest, the amount
owed will never exceed the net sale proceeds of your property.
For further information, or to arrange a confidential consultation,
please contact S.H.I.P.
on 1890 60 70 80.
S.H.I.P. operates an internal complaints procedure whereby
complaints are considered by a
senior member of its management team. All complaints should
be addressed to:
The Manager, Customer Services, S.H.I.P., 23 Ely Place,
Dublin 2.
As a mortgage lender S.H.I.P. is subject to oversight by
the Financial Services Ombudsman.
If you are not satisfied with the outcome of S.H.I.P.’s
internal complaints procedure you
may raise your complaint with The Financial Services Ombudsman’s
Bureau, 32 Upper
Merrion St., Dublin 2, or online at www.financialombudsman.ie
If you would
like to receive some further information from NMS about
SHIP, click here
Consumer Credit Act Notices
Valuation
S.H.I.P. requires that a valuation be carried out on the
property(ies) offered as security. This
valuation must be completed by a valuer acceptable to S.H.I.P.
and any such valuation or report
remains the property of S.H.I.P.. No responsibility whatsoever
is implied or accepted or warranty
given by S.H.I.P. for the value or condition of the property
by reason of such valuation. You are
responsible for the payment of the valuation fee. You are
entitled to your own copy of the
valuation report.
Fees and Costs
S.H.I.P. requires that a valuation be carried out by a
valuer acceptable to S.H.I.P. and that the
appropriate fee be paid by you directly to the valuer.
In the event that your application for a
Lifetime Mortgage is refused the valuation fee will be
refunded to you.
Legal fees (excluding costs associated with S.H.I.P.’s
legal investigation of title for the purpose of
the Loan) are payable by the borrower to his or her solicitor.
Please ask your solicitor for an
estimate of his/her fee for investigating Title and completion
of a Certificate of Title. In addition
there will be outlay comprising Stamp Duty, Registration
Fees and Search Fees etc.
Redemption - Where the interest rate is fixed for life:
The rate of interest applicable to this loan
will be fixed for the life of the Applicant(s) from the
date of drawdown. In the event of early
repayment of the loan in whole or in part for any reason
S.H.I.P. may charge a redemption fee to
cover any costs incurred by S.H.I.P. in amending or terminating
any interest rate hedging contract
entered into by or on behalf of S.H.I.P. in order to provide
the Applicant with the certainty of a
fixed rate of interest for the life of the Applicant. The
redemption fee is calculated using the
following formula:
Redemption fee =
PV(f) - PV(f1)
Where:
PV(f) = Present Value of remaining flows under the original
interest rate hedge; and
PV(f1) = Present Value of remaining flows based off current
market rates.
Redemption - Where interest rate is variable and capped:
In the event that the home loan is
repaid (in whole or in part) within 5 years of the Drawdown
Date other than as a result of (1) the
death of the Applicant or where there are two or more Applicants
the death of the last survivor,
or (2) where the Applicant’s by agreement in writing
with SFIL cease to actually reside in the
Property for a period of twelve consecutive months or for
a cumulative period of twelve months
in any eighteen month period SFIL may charge a redemption
fee to cover any costs incurred by
SFIL in amending or terminating any interest rate cap contract
entered into by or on behalf of
SFIL in order to provide the Applicant with certainty that
the interest rate applicable to the home
loan is capped for the life of the loan. The redemption
fee (if applicable) is calculated using the
following formula:
[Initial cost of interest rate - residual cost of interest
rate cap]
WARNING: YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP PAYMENTS
ON A LOAN OR ANY
OTHER LOAN SECURED ON IT.
PURCHASING THIS PRODUCT MAY NEGATIVELY IMPACT ON YOUR ABILITY
TO FUND FUTURE
NEEDS.
*S.H.I.P is a registered business name of Seniors Finance
Ireland Limited (Company number 393642), a wholly
owned subsidiary of Shared Home Investment Plan Limited,
having its registered office at 23 Ely Place, Dublin 2.
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