Advice on Loan Contract and Commercial Lease
Added on 2023-04-07
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Date: 10/03/2019
To
Mr and Mrs Wang
Subject: Advice regarding the loan contract and commercial lease
Respected Sir/Madam
We have come to know that you have made arrangement for finance to purchase the
property located at 282 Lawrence Street, Alexandria. We would initially like to advise you in
relation to the confusion regarding the 4% and the 6% interest rate. The financial table of the
loan document provides that Annual interest rate is 4.00% per annum percentage rate.
However if you make a delayed payment you have to provide for a arrears fees which is $50.
In addition the default rate at any time equals the annual percentage rate at that time plus a
margin of 2 % per annum. At the disclosure date, it is 6.00 % per annum. We would also like
to advise you on whether the mortgage allows u to make extra payments of principal or
interest in the event that you have extra funds available. The loan contact provides that you
may prepay any part or all of the balance at any time. If you do, you must pay the bank any
applicable fees and charges payable under the National Credit Code on the day you do so.
Therefore prepayment is allowed under the contract. We also came across you question that
whether the mortgagee would be able to take possession of the property, sell it and then
recover any shortfall from your end in case of non-payment even if you did not come across
the terms in the memorandum. Under the relevant sections of the Consumer Credit Code it is
provided that the credit provider can take possession of the property to sell it, if it has the
court’s approval or the written consent of the occupier which is given after the occupier is
informed in writing. It is also an implied terms in the mortgage contract that the mortgagee
would be able to take possession of the property, sell it and then recover any shortfall from
your end in case of non-payment of debt. We would like to draw your attention to the
question that whether you have any specific obligations in respect of the state of repair of the
property. Under the third paragraph of the memorandum it is your responsibility as the
mortgagor to during the continuance of this security, whether the mortgagee shall or shall not
To
Mr and Mrs Wang
Subject: Advice regarding the loan contract and commercial lease
Respected Sir/Madam
We have come to know that you have made arrangement for finance to purchase the
property located at 282 Lawrence Street, Alexandria. We would initially like to advise you in
relation to the confusion regarding the 4% and the 6% interest rate. The financial table of the
loan document provides that Annual interest rate is 4.00% per annum percentage rate.
However if you make a delayed payment you have to provide for a arrears fees which is $50.
In addition the default rate at any time equals the annual percentage rate at that time plus a
margin of 2 % per annum. At the disclosure date, it is 6.00 % per annum. We would also like
to advise you on whether the mortgage allows u to make extra payments of principal or
interest in the event that you have extra funds available. The loan contact provides that you
may prepay any part or all of the balance at any time. If you do, you must pay the bank any
applicable fees and charges payable under the National Credit Code on the day you do so.
Therefore prepayment is allowed under the contract. We also came across you question that
whether the mortgagee would be able to take possession of the property, sell it and then
recover any shortfall from your end in case of non-payment even if you did not come across
the terms in the memorandum. Under the relevant sections of the Consumer Credit Code it is
provided that the credit provider can take possession of the property to sell it, if it has the
court’s approval or the written consent of the occupier which is given after the occupier is
informed in writing. It is also an implied terms in the mortgage contract that the mortgagee
would be able to take possession of the property, sell it and then recover any shortfall from
your end in case of non-payment of debt. We would like to draw your attention to the
question that whether you have any specific obligations in respect of the state of repair of the
property. Under the third paragraph of the memorandum it is your responsibility as the
mortgagor to during the continuance of this security, whether the mortgagee shall or shall not
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