Guide for Mortgage Borrowers

Guide for Mortgage Borrowers

Here is the general information on the Credit Union and the mortgage product available and it also outlines some of the standards the Credit Union will uphold when lending.

About your Credit Union

St. Canice’s Kilkenny Credit Union Limited is an independent, member-owned financial institution regulated by the Central Bank of Ireland and registered with the Registry of Credit Unions under registration number CU144. The registered office of the Credit Union is 78 High Street, Kilkenny.

‘We’ or ‘Us’ or ‘the Credit Union’ refers to St. Canice’s Kilkenny Credit Union Limited. ‘You’ or the ‘Borrower’ or ‘the Member’ refers to the person applying for mortgage credit.

Key Milestones in the Application Process

• Enquiry: whether you are ready to apply for a mortgage now or are just looking for advice on how to save for a deposit our staff are happy to sit down with you to talk you through the process.
• Application: we will provide you with an Application Pack together with several documents for you to fill in. Please pay attention to the checklist at the front of the Application Form as it will speed up the process if you bring all the necessary documentation with you.
• Approval in Principle: when you first enquire about a mortgage with us, we will conduct a very basic assessment of the amount you could, in principle, borrow. This does not mean that we are offering to lend that amount but if you are looking to buy a home, it allows you to get started with house hunting.
• Underwriting: this is where we review and assess your application. We will look at all of the documents submitted and will also conduct other standard checks, like obtaining an independent valuation of the property and conducting credit history check.
• Full Approval: once we have reviewed your application and are happy to proceed, a letter of offer will be issued. This may contain several conditions and you should pay close attention to these as it will not be possible to draw down funds until those conditions are met. From here you should keep in close contact with your solicitor who will work with the solicitor of the person selling the property to ensure that the sale goes smoothly. We will also provide you with a European Standard Information Sheet (ESIS) that will provide specific details regarding your mortgage.

The Mortgage Product

We offer a variable rate mortgage; this is where the rate charged may rise or fall over the lifetime of the loan. Any change to interest rates will be communicated to borrowers in writing and in good time before the change takes effect.

Mortgages are offered for the following purposes;

1. Buying a house – Principle Private Residence
2. Switching Mortgage Provider – Principle Private Residence
3. Renovating a house – Principle Private Residence.

The current standard variable rate is 3.9%. The European Standard Information Sheets and the Letter of Offer will clearly display the applicable rate.

Example of Cost of Mortgage

• Amount Borrowed €100,000
• Term 35 years
• Interest Rate 3.9% (Annual Percentage Rate of Charge 3.97%)
• Monthly repayment €436.81
• Total Cost of Credit €83,411.55

In addition to the above costs, you will need to factor in the additional costs of insurances, an independent property valuation and legal fees. Your solicitor will advise you of the legal costs involved, including Property registration Authority fees and Stamp Duty.

Maximum Loan Values

• The Credit Union offers mortgages up to €350,000 over a maximum term of 35 years.
• The maximum Loan to Value (‘LTI’) is 90% for first time buyers and 80% for non-first-time buyers. This means that the total amount of credit offered can be no more than 90% of the value of the property as appearing in the independent property valuation.
• The maximum Loan to Income (‘LTI’) is 3.5 times your gross basic annual income.

General Mortgage Conditions

The Credit Union makes the following stipulations for mortgages. This list is a guide only and a comprehensive list of conditions is contained in the “Mortgage Terms and Conditions” document.

1. The mortgage will be secured on the property being financed by way of first charge. We may seek additional security such as a guarantee, but if we do, this will be discussed with you in advance.
2. We will accept monthly loan repayments only.
3. There is no charge for early repayment of a variable rate loan.
4. As the property is your main home or “principle private residence”, you are required to obtain Mortgage Protection Insurance to cover the full outstanding mortgage balance in the event of death. This policy must be assigned to the Credit Union.
5. The Credit Union requires buildings and contents insurance to be obtained for all mortgaged properties. This insurance must be maintained for the full duration of the mortgage.
6. An independent valuation of the property is required for the Credit Union to assess the application. The Credit Union will arrange for the valuation to be carried out by a member of their panel of local property valuers. The cost of this will be paid for by St Canice’s Credit Union.

Communicating with You

The Credit Union commits to, at all times communicate with the Members in a manner that is:

• Open
• Honest
• Transparent

We are obliged to fully assess your ability to repay so that you don’t take on borrowing that will put you under too much financial pressure. This will include stress testing your finances to calculate the impact of, for example, a reduction in salary or a rise in interest rates. If we are unable to offer you a mortgage, we will communicate this to you as soon as possible, explaining the reasons why.

If you are not satisfied with the service you receive or have a complaint, you can pick up a copy of our complaints procedure in any branch or download it from our website; www.stcanicescu.ie. The complaint will be treated in strict confidence and if the matter is not resolved to your satisfaction within 40 business days, we will provide you with a written response in accordance with our Grievance Policy. Should the matter not be resolved to your satisfaction utilising the Credit Union’s process, you have the right to contact the Financial Services Ombudsman:

Data Policy

The Credit Union will gather data through our interactions with Members and will comply at all times with our obligations set out under the Date Protection Acts. We will seek your consent prior to using any personal data for the purposes of assessing a mortgage application. You have a right to receive a copy of your personal data held by the credit union following a written request and the payment of a nominal fee. Should there be any mistake or inaccuracies in your personal data, you have a right to have this corrected free of charge.

Member Default

The Credit Union will always seek to assist Members who are in default or experiencing financial difficulty. If a Member is in difficulty repaying their mortgage, they should contact the credit union as early as possible to discuss potential options. The Credit Union may, if necessary, exercise our rights and remedies set out in the Mortgage Terms and Conditions.

Warning: Your home is at risk if you do not keep up payments on a mortgage or any other loan secured on it.

Warning: The payment rates on this housing loan may be adjusted by the lender from time to time.

Warning: The cost of your monthly repayments may increase.

Warning: If you do not meet the repayments on your credit agreement, your account will go into arrears. This may affect your credit rating, which may limit your ability to access credit in the future.

Warning: Credit cannot be granted where the information provided is insufficient for the lender to fully assess your creditworthiness.