Q. What is loan payment protection?

A. Loan payment protection is valuable cover you can take out to make sure you can pay your loan if the unexpected happens. Having loan payment protection cover means that if you can't work due to an illness, accident or redundancy, your repayments could be made on your behalf. In the event of your death, or if you should suffer from a critical illness, the outstanding balance of your loan could be
paid off in full. If you are retired or over 72, (and less than 80) other benefits apply including accidental injury, accidental death and hospitalization cover.

Q. What are the important documents that I need to provide?

A. You will need to furnish only the following documents if you are an existing customer of the Bank:
· Passport size photograph
· Proof of official address for self employed individuals and professionals. This can include shop and establishment certificate/Lease deed/Telephone Bill
· Latest Salary clip and Form 16, in the case of salaried persons
· IT returns for the last two financial years, in the case of self employed individuals and professionals

If you are not an existing bank customer you would also need to establish your identity and give proof of residence.

Q. What costs are involved in setting up the loan?

A. The costs associated with purchasing a property and/or taking out a loan can be substantial, and it is important that you budget for them in determining how much you can afford to pay for a property

Q. Are there any on-going fees and charges?

A. Yes, monthly administration fees are charged on both our loan and 100% offset accounts. Currently this fee is $5.00 per month. If you have a Split Rate loan however, you only pay the administration fee on one loan.

With Professional Package loans the administration and offset fees are replaced by a $300 annual package fee.


Q. How many home equity loans can I have?

A. borrower may have only one equity loan at a time. Furthermore, it cannot be refinanced more frequently than once a year. Because of this limitation, it is crucial to shop for the best terms among lenders. It is also important, as in any credit transaction, to compare the total costs of a home equity loan to other types of credit available to the consumer. For example, a borrower might not face a prepayment penalty for early payoff of a home equity loan. However, if the loan is paid off early, a home equity loan could end up being more expensive than an unsecured loan with a higher interest rate if you paid closing costs and points.


Q. Can you explain how construction loans work? Why is it so difficult to find construction loan information on the Web?

A. Construction loans are story loans. That means that the lender has to know the story behind the planned construction before they're willing to loan you money. Because it's a story loan, it's not going to be standardized like mortgage loans. That said, there are some common features to a construction loan. Construction loans typically require interest-only payments during construction and become due
upon completion. Completion for homeowners means that the house has its certificate of occupancy.

Construction loans are usually variable-rate loans priced at a spread to the prime rate or some other short-term interest rate. You, the contractor and the lender establish a draw schedule based on stages of construction, and interest is charged on the amount of money disbursed to date.

Q. What's the best strategy for converting a construction loan?

A. You should take out a mortgage to pay off the construction loan. Construction loans aren't meant to be a method of long-term financing. A first mortgage is a better choice than a home equity loan because you can borrow for longer periods, generally at a lower interest rate.

A typical home equity loan is a second mortgage. It carries a higher interest rate than a first mortgage because there is more risk to the lender. That's because the first mortgage has to be satisfied before any sale proceeds go toward satisfying the second mortgage. With no other lender having priority in the event of foreclosure, you've given the home equity lender all the benefits of being the primary lender.


Q. What is an equity loan?

A. An equity loan is secured by the equity you have in your homestead. Your "equity" is the value of your homestead minus any outstanding debt already secured by your homestead.


Q. What is a home equity loan?

A. A home equity loan is a financial product that allows a borrower to use the market value of a home as collateral for a loan. Loans secured by real estate generally are considered safer by lenders, resulting in lower interest rates than for other types of loans.
Equity is easily calculated by subtracting the amount owed on the home from the current market value. For example, if a house with a market value of $100,000 has an outstanding mortgage of $30,000, the homeowner has equity of $70,000. If there were no mortgage or other type of lien on the house, the homeowner would have $100,000 in equity.


Q. How often does the interest rate change?

A. That depends on the loan. Changes can occur every six months, annually, once every three years or whenever the mortgage dictates.