Service charge loan

Conditions

The following conditions apply:

• you must be a Southwark Council leaseholder
• all leaseholders on the property title must be applicants and will be liable for the loan
• the leaseholder cannot be a company
• the loan can only be given for service charges for major repairs and improvements
• there must be enough equity in the property to secure the loan
• all lenders and others on the property title must consent to the charge being registered against the property

The borrower:

• must provide the council with details of current mortgages and charges on their property
• must provide details of income and expenditure
• consents to us contacting their mortgage provider 
• consents to us carrying out credit and affordability checks on them
• must provide a medical document of their condition from a qualified medical professional in cases of hardship due to a medical condition

Terms

The loan will be:

• secured by a legal charge on the borrower’s property
• repayable in monthly instalments on both capital and interest for the duration of the contract (does not apply for the voluntary lifetime discretionary loan)

Repayment loans and loans for exceptional hardship will be repayable upon:

• the death of the leaseholder (or last surviving leaseholder if joint purchasers)
• the sale of the property
• a remortgage 

The borrower:

• will pay a fee of £747.00 (subject to change) to cover admin and legal fees to complete the mortgage deed
• will pay a redemption fee of £136.50 (subject to change) on final settlement of the loan and any further advances 
• may repay the loan in full at any time without penalties
• may make extra capital payments from time to time of more than £100 per payment (at the council's discretion) you must instruct to do so in writing
• must apply again if they want to add additional service charges to the loan
• must pay additional administration and legal fees if the extra borrowing is agreed

The rate of interest will be variable and will track the Bank of England base rate. 

The rate depends on the product:

• resident repayment discretionary loans: 2.5% above the base rate
• non-resident repayment discretionary loans: 4% above the base rate
• 'voluntary' lifetime discretionary loans for exceptional hardship: 2.0% above the base rate

Postponements are at the Council’s discretion.