Home Improvement Loan


Please find below a summary of the 'golden rules' of Home Improvement Loans. Welsh Government have provided the Council with funding specifically for this purpose. The funding available shall be recycled i.e. loan repayments are collected ready for allocation as new loans to new customers.

All loan agreements are made between the Council and the loan applicant(s). Loans are only available subject to applicant status and subject to available funding. Loans are initially offered on a first come first served basis.

The loan fund shall be available from March 2015.

Please click the following link for further information:

http://gov.wales/topics/housing-and-regeneration/grants-and-funding/home-improvement-loans/?lang=en

Who can apply? Owner-occupiers, landlords and investors
Loan Set up fee 15% inc. vat. Fee can be paid up front or added to loan
Min and Max Loans £1,000 - £25,000
Max Loans per applicant

£150,000 per applicant at any one time (e.g. x6 @ £25,000 per unit

Loans MUST satisfy the 80% loant to value (LTV) rule. That is, any mortgage or other debt secured against the property, PLUS the value of loan applied for, MUST NOT exceed 80% of the CURRENT property value.

Where there is any doubt or dispute about the current property value, the Council can request the applicant provides an RICS valuation report (at the applicant's cost).

Interest Payable 0%
Permitted Works Any works which make a residential property - warm, safe and/or secure. Conversion of commerial or other types of property are also permissable
After works Properties can be lived in by applicant, sold or rent out
Eligibility

Applicants must be 18 yrs+

All owners of the subject property must be loan applicants

All applicants are subject to credit checks, affordability assessments and risk assessments

Loans approved subject to status

General terms & conditions

The purpose for which the loan is given must be approved by the Council

If the loan recipient sells the property during the term of the loan, the loan amount must be repaid upon sale

Owner-occupiers have greater discretion with regards to works they wish to fund

Landlords and Investors, must ensure the proposed works remove any Cat 1 Hazards present in the property

Proof of all household income and outgoings is required

Failure to provide all necessary information or to provide deliberately misleading information could lead to prosecution 

 

Loan periods

Between 1 and 5 yrs for landlords

Between 1 and 10 yrs for owner-occupiers

How will MTCBC pay loan funds?

Funding will be transferred via BACs to the loan recipient's bank account in one of two ways:

i) Full loan payment up front, prior to the commencement of works; or

ii) 50% payment up front, and 50% upon completion of works

The Council will decide which option is most appropriate in the circumstances

Who arranged the works?

The loan recipient.

However, the Council can offer its Home Improvement Agency Service at a fixed cost of £850, providing total piece of mind for customers. The Agency Service shall schedule works, appoint the contractor, oversee works and make payments to the contractor on behalf of the customer.

Repayment Terms

Either monthly repayments or at the end of the loan term (or upon sale if appropriate)

Council shall decide on repayment terms in each case.

Risk Mitigation Measures

The Council will register a Legal Charge on property owned by the applicant(s)

The Legal Charge must be first charge, or may be second charge, only where the first charge (usually mortgage company) consents to the second charge.