Mortgages

Loans are only granted against a mortgage.

Existing mortgages, in addition to the fund's loan, may not exceed 65% of the property's assessed market value, as determined by a certified real estate agent or other specialist designated by the fund. The borrower pays the assessment cost.

Notes on mortgages

The Pension Fund of Commerce wishes to draw the attention of those who permit mortgaging of their property by applicants for loans to the fund, to the following:

1. Mortgages are intended to guarantee prompt and indemnified payments on the loan/bond, i.e. instalments, interest, indexation, penalty interest and other costs.
2. The fund's loans are usually long-term loans, for up to 40 years. The mortgage thus often exists for a long period.
3. In the case of default on the loan/mortgage, reminders are sent to the debtor, and not to the person who has granted the mortgage on his/her property.
4. Should the debtor not respond to reminders of payment, an application is made, in accord with the terms of the bond and the relevant legislation, for the mortgaged property to be sold at auction.
5. Experience has shown that this can lead to severe problems for the owner of the mortgaged property, who may be forced to pay off the loan in order to avert his/her property being auctioned. In some cases, the owner of the property has not been able to make such payment, and the property has then been auctioned.
6. When applying for a loan from the Fund, and putting up as collateral a property not owned by the applicant him/herself or his/her spouse, partner or civil partner, the applicant must submit a credit rating from the bank or other recognised financial body, confirming the applicant's ability to meet the payments on the loan.
   
   With the consent of the loan applicant, the person who is intending to provide collateral in a property may have access to the result of the credit rating. If the credit rating indicates that the loan applicant will not be able to meet his/her obligations, but the property owner is nonetheless willing to provide collateral, he/she shall confirm this in writing.
7. For this reason, the fund wishes to point out these issues, and urges the parties to study these points well, and be aware that if they are to permit a person to mortgage their property, they must have great trust in that person.