Welcome to part one 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.
This month, we will be begin with your mortgage contract, but first:
‘WHAT IS A CREDIT FACILITY AGREEMENT?’
Your credit facility agreement, sometimes known as a loan facility agreement, establishes the terms and conditions under which a lending institutions is prepared to make a loan available to you. It normally follows a decision by the institution to offer you a loan, for example, a personal loan or mortgage, or a credit product, such as line of credit or credit card.
UNDERSTANDING YOUR MORTGAGE CONTRACT
Similar to any credit product or loan, when a financial institution makes a decision to lend funds to you for the purpose of purchasing property, a contract will be presented. In the case of a mortgage from JN Bank, this credit facility agreement is presented as a Mortgage Contract, which is a legally binding agreement between the lender, JN Bank- known as the mortgagee- and you, the borrower- refereed as the mortgagee.
Under this agreement, the you, as the mortgagor must honour the conditions of the mortgage by paying to JN Bank the agreed sum of money with interest (variable) at a certain time monthly, until the mortgage has been fully repaid.
Making your monthly payments
Your monthly repayment consists of principal, interest, and where applicable, peril and/or life insurance premium(s). Monthly payments become due and payable one month after the date of full disbursement of the loan. You have the option to select a preferred payment due date; however, you will be required to pay additional interest from the date of disbursement to the day before the preferred due date.
You have the option to change your payment due date at any time during the life of the loan; however, you will be required to pay additional interest from your existing payment due date to the day before the new payment due date.
We hope this helped you to better understand your mortgage contract.
In January’s newsletter, we will continue the focus on your mortgage contract, as we discuss peril and life insurance payments, as well as property taxes.
