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With an EFM you:
| • | Have full title to the home - it remains in your name (subject to a first mortgage granted to a traditional home loan lender and a second mortgage granted to Permanent Custodians Limited, which is the EFM lender of record); | | • | Can refinance (ie, discharge) the EFM loan at any time at your discretion; | | • | Only have to repay the EFM if:
| ° | you sell your property; | | ° | the EFM gets to the end of its 25 year term; | | ° | the property passes to your estate; | | ° | your property changes hands for any other reason; or | | ° | you are in default. |
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You can refinance your EFM or repay it early--the choice is yours--but the EFM lender will not share in any decrease in your property value at the time you repay if you do not actually realise the loss (ie, by selling your property).
While the EFM lender will share in real losses, they will not share in "paper" losses that have not actually been realised in a proper third-party sale.
In situations when you repay the EFM without selling your property, and the value of your home has declined, you would normally just repay the original dollar value of the EFM loan amount with no interest whatsoever.
And don't forget, except in extreme circumstances (for example if your property is destroyed and is uninsured or if you are in default), you will always get a minimum 60% of any increase in the value of the property (assuming you take out a 20% EFM).
Of course, if you only took out a 15% EFM, you would always capture 70% of the growth since in this scenario the EFM lender is only entitled to 30% of the growth.
We strongly recommend that you obtain independent legal and financial advice in relation to this EFM loan prior to entering into the EFM loan contract.
Please carefully read and review the EFM Disclosure Document available on this website or through one of our accredited lenders. This website does not take into account your personal objectives, financial situation, or particular needs. You should obtain a copy of the EFM Disclosure Document (available on this website) and the EFM Terms and Conditions Booklet from one of our accredited lenders and consider them before making a decision about whether to enter into an EFM. |
Copyright 2008 Rismark International. All rights reserved. Fees, charges, terms, conditions and lending criteria apply. Full details are available on application. EFM loans have been developed by and will be provided by Rismark International Funds Management Ltd ABN 15 114 530 139 AFS licence number 293881 (trading as Rismark International) ('Rismark', 'we', 'us' or 'our'). EFM loans are offered in conjunction with certain traditional home loans offered by approved lenders and their originators. Rismark has appointed Adelaide Bank a division of Bendigo and Adelaide Bank Limited ABN 11 068 049 178 AFS licence number 237879 ('Adelaide Bank') as an approved lender Adelaide Bank and its originators ('Adelaide Bank originators') will distribute and manage EFM loans. Rismark has consented to Adelaide Bank and Adelaide Bank originators branding EFM loans as Adelaide Bank or Adelaide Bank originator-branded EFM loans. Rismark may over time also appoint other financial institutions to distribute and manage EFM loans. Rismark has appointed Permanent Custodians Limited ACN 001 426 384 ('Permanent') as lender of record, custodian and mortgagee for Rismark. This means Permanent will enter into the EFM loan contract and Mortgage on behalf of Rismark.(R) Equity Finance Mortgage (EFM) and EFM are registered trade marks of ARES Capital Management Pty Limited ABN 93 113 861 046. TM Equity Finance Mortgage is a pending trade mark of ARES Capital Management Pty Limited ABN 93 113 861 046. ARES Capital Management Pty Limited's ABN 93 113 861 046 intellectual property relating to the EFM product is protected by Australian Innovation Patent Numbers 2005100 871, 2005100 869, 2005100 868, 2005100 867, 2005100 865, 2005100 864, 2007100 445, and 2007100 448.
