Understanding Your Credit Facility Agreement – Part 3

    JN Group

    Hello JN Members,

    Welcome to part three of Understanding Your Credit Facility Agreement.

    In this series, our aim is to assist you to understand what a credit facility agreement is, and break down the different credit products offered by JN Bank, and how they work.

    Last month, we discussed peril and life insurance as it relates to your mortgage. This month we will be discussing Redemption of Mortgage.

    Partial Redemption (Principal Payment):  You are permitted to make lump sum payments towards the loan principal two times within a twelve-month period. Ensure that if such payments are intended as partial redemptions, they are accompanied by your written authority (or completion of prescribed forms at our branches) and your account is up to date i.e., not in arrears.

    The minimum partial redemption payment accepted is $50,000.00 or the equivalent of three months’ monthly payment (whichever is more). The maximum partial payment accepted is 90 per cent of the principal balance.

    Partial redemption payments will automatically result in an adjustment to the term of your loan, however, you have the option to request an adjustment to the monthly payment instead.

    Members wishing to make partial redemption payments within 12 months of the disbursement of their loan will be required to pay a penalty equivalent to six months’ interest charged on the principal balance, prior to the partial redemption payment.

    An amendment to the Mortgage Deed (the mortgage agreement) will be required whenever an adjustment is made to either the monthly payment or loan term, consequent to a partial redemption payment.

    There is a cost for the processing of the agreement to amend the Mortgage Deed. This cost is payable at the time of making the partial redemption payment. You may visit our website at www.jnbank.com for our Schedule of Rates and Charges.

    Full Redemption (Early Closure): You can elect to repay the loan prior to expiration of the loan term. It should be noted, however, that six calendar months’ notice is required if the loan is being repaid within the first 12 calendar months of disbursement and three calendar months’ notice if the repayment is made 12 months of disbursement. All such notices must be given in writing and acknowledged by the Bank.  Should such notice not be given, you will be charged a penalty equivalent to six months’ interest for accounts being repaid within the first 12 months of disbursement and three months’ interest for accounts being repaid after 12 months of disbursement.

    If the loan is not repaid by the expiry date of the notice, further notice is required.

    In March’s newsletter, we will continue the focus on your mortgage contract, as we discuss Discharge of Mortgage and Closure of Accounts, as well as Servicing Your Mortgage.

    Was this article helpful?