Managing loan renewals and maturity dates

We take a lot into consideration when managing loans on your behalf. With recent news around banks being difficult, new home consents being at a 48 year high, house prices fluctuating, a range of supply shortages, and construction delays, we want to highlight our maturity dates and renewals process.

Firstly, let’s talk about maturity dates:

COVID-induced disruptions are still being felt today throughout the property market and broader supply chain. Throughout the pandemic we’ve seen loans slip past their expected maturity date with extension requests because of these disruptions.

We always like to reiterate that a maturity date is only an estimate. Just because there is an estimated maturity date on the loan doesn’t mean funds will automatically be repaid on that date.

However, rest assured that all loans, and all investments linked with those loans, remain valid and continue to earn interest until the loan’s repaid in full. Regardless of maturity date.

Secondly, let’s address renewals:

Every renewal can take some time as we gather and assess updated information from the borrower. This is part of our detailed due diligence process for each mortgage term. Below is an outline of the information we gather:

• Affordability. We want to make sure the borrower’s financial position hasn’t changed. We’ll often ask for a statement position to ensure this is the case.
• Credit checks. An updated credit check is obtained and scrutinised, with any discrepancies queried.
• Value. We may require an updated property valuation. Depending on the term requested (if short), the location, and the LVR (if low), we may be happy to use the original valuation obtained when the loan was approved.
• Reason for renewal. As most of our borrowers come to us via a mortgage advisor their advisor will obtain this information from them.
• Compliance. Our compliance team checks that the loan still passes requirements under the Anti-Money Laundering and Countering Financing of Terrorism legislation.
• Account conduct. How a customer has handled their current loan with us is important. For example, have they met payment deadlines? These types of questions play a part in the renewal decision.

There are no shortcuts when it comes to due diligence, which is why it may take time between a maturity date passing and a renewal notice being issued. Rest assured, that we are working hard to get the latest information in order to make the smartest loan decisions for our investors.

You of course always have the option of exiting the loan via our Secondary Market program, once a renewal is completed, where we on-sell your investment on your behalf via the Investment platform to another investor. For more information please go to our website here.

We’re always here to answer your questions, so if you are unsure about anything to do with your loan maturity deadline or renewal process, give any one of us a call and we can talk you through it.