Loan Process Stages
STAGE 1– REFERRAL
You are referred to ART Homes Ltd (AHL) by your Local Authority. You will be asked to give your permission for this and to sign a form.
STAGE 2– INTRODUCTORY LETTER
A letter is sent to you introducing AHL and explaining AHL’s role.
STAGE 3– VALUATION
An independent valuer is instructed if applicable. A valuer will make direct contact with you to arrange an appointment to come and value your property.
STAGE 4 - FINANCIAL ADVISER APPOINTMENT ARRANGED
You will be contacted by AHL to arrange an appointment for a Financial Adviser to visit you in your own home.
STAGE 5 – FINANCIAL ADVISER VISIT
A fully qualified Financial Adviser will come and visit you in your property to discuss the suitability of loan products to cover the cost of your repair work.
STAGE 6– ASSESSMENT AND CREDIT CHECK
A full assessment of your circumstances and credit check will then be carried out by the Financial Adviser at AHL. Using the Local Authorities guidelines a financial arrangement form will be completed stating the maximum amount you could borrow. This will be sent to the Local Authority arranging your repairs and they will contact you for your signature.
STAGE 7– ADVANCE LOAN OFFER
An advance loan offer stating the amount you can borrow is then sent to you at home. In some cases you will be sent a product recommendation rather than an advance offer. The duplicate copy of this letter must be signed and returned if you are happy to continue with the loan.
STAGE 8 - FORMAL OFFER
Seven days later or upon receipt of a signed product recommendation, a formal offer is sent to you for signature along with other necessary documents. This must be returned to AHL if you wish to continue.
STAGE 9– LEGAL CHARGE
Once the signed offer has been received by AHL we will send it to our solicitors to arrange the legal charge. This part of the process generally takes up to 4-6 weeks. The legal charge document is then sent to you for signature. Your signature will need to be witnessed. This is then returned to AHL.
STAGE 10– COMPLETION AND RELEASE OF FUNDS
AHL sends all the documentation to the solicitor for instruction. This part of the process generally takes between 2 and 4 weeks. The solicitor then instructs AHL that all the processes are now complete and it is ok to release the money and the loan begins. The money is paid directly to the Local Authority overseeing your repairs. Once AHL have notified the Local Authority the funds are available for the work, the Local Authority will contact you to arrange for the work to start.
Frequently Asked Questions and Answers
Below is a selection of frequently asked questions. If your question is not answered here or by the information provided in the Loan Products (please provide direct link to loans info section) section please contact call us on 0121 327 3344 or email.
1. Why does it take so long to approve the loan?
From the time the local authority refers your enquiry to us, there are several stages in the process for having a loan with these schemes. Once AHL have visited you we make a recommendation to the Local Authority based on what you are able to borrow. The schedule of works is then fully confirmed between yourself and the LA. Once this is finalised we are advised of the final costs and your agreement and can then proceed to make you a formal loan offer. Queries may arise during this process around the amount of work or about the loan, which may cause delays. Generally this part of the process takes between 6-8 weeks.
2. Would my home be repossessed if I couldn’t keep up the repayments?
No, most of the loans provided come with a guarantee of no repossession. We will work with you to ensure that you are able to afford any loans that we recommend. If you subsequently experience difficulty repaying a loan you should contact us immediately. We are happy to discuss problems that arise and understand that unforeseen expenditure can cause short-term issues.
3. What if my situation changes and I can no longer afford the repayments on a Capital and Interest only Repayment Loan?
We will work with you to make suitable arrangements in order for you to repay the loan. This may mean looking at different payments levels, extending the time of the loan and other such options. Each case is looked at individually so there is not one single answer.
4. What happens when I want to move house?
If you took out a Capital and Interest Repayment Loan, or an Interest Only Loan you will have to pay off what remains of the loan, including interest to the date of redemption, either before or on the date of sale.
With a Property Appreciation Loan (PAL®) you repay the proportion of the value of the property that you borrowed, based on its market value at the time of sale – a revaluation of the property will be required (current cost £40.00).
5. The house is in joint ownership with my wife/husband. What happens if one of us were to die?
Ownership of the property would revert to the survivor, and the Loan or PAL would continue as before. You could repay the loan at any time. If you were never in a position to repay the loan, it would be repayable when ownership of the property is eventually transferred to someone not on the original loan arrangement.
This includes transferring to any children as inheritance. Arrangements will either be made to repay the loan or discuss the situation with the Local Authority.
6. If the sole home owner dies and there were other people living in the house, what would happen?
The Loan must be repaid when the sole surviving owner vacates the property or transfers ownership, however should this cause difficulties in extreme circumstances the individual case will be reviewed by AHL and the Local Authority.
7. Could there be any problems with the Bank/Building Society who have my mortgage?
We always seek the permission of the first lender prior to placing our charge. Sometimes there are delays in the lender responding to us and we may ask you to contact them in order to speed up the process.
8. What if my house is in my will, do I need to change my will?
No, but we recommend that you make close family members aware that you taking out the loan prior to the works starting. If you have any concerns or reservations you should independent financial and/or legal advice before proceeding.
9. Do I need to take out life assurance on the money I borrow?
No it is not necessary to take out life insurance; however if you wish to, you should seek independent financial advice if you have concerns over life cover.
10. When do I have to repay a PAL?
You can pay the loan back at any time. There are no time constraints while you remain the owner in residence of the property. However, the loan must be repaid when ownership of the property changes or the owner(s) ceases to occupy the property as their main residence.
11. What if my property decreases in value and I sell?
When you come to repay your loan if your home has decreased in value from when the PAL was originally arranged the original loan amount is repayable. There are no penalties or charges for early repayment; however you would be responsible for the cost of the re-valuation of your property.
12. What if my situation changes and I want to repay my PAL?
You can repay at any time. The current market value of your property at that time will be used to calculate the amount repayable (subject to the minimum amount as described above). There are no penalties or charges for early repayment; however you would be responsible for the cost of the re-valuation of your property.
13. When a PAL is to be repaid is there a maximum amount that it can increase to?
There is no CAP (limit on the amount) on the amount a PAL can be repaid at. The amount will remain the same percentage amount of current value originally borrowed. As your home increases in value so does the PAL redemption value.
Redemption Process
This section gives you information on how to redeem your ART Homes Loan. If you wish to redeem your loan please put your request in writing and send to Stacy Edkins, ART Homes Ltd. Gee House, Holborn Hill, Aston, Birmingham B7 5JR.
Please clearly state your name, address, type of loan and date you wish to redeem. Please also state how you will be redeeming the loan i.e. through house sale, re-mortgage or capital (cash or cheque).
Once we have received your request to redeem your loan you will receive a letter from us acknowledging receipt of your request and detailing the next steps.
If you are redeeming a capital repayment or interest only loan this will also include the amount you have to pay to clear the loan.
If you are redeeming a property appreciation loan an independent valuer will need to be instructed to determine the current value of your property. The current cost of this is £40. Cheques can be sent in with your request to redeem and should be made payable to ART Homes Ltd.
If you have any queries regarding redeeming your loan please contact Stacy on 0121 327 3344 or email sedkins@mercian.org.uk.
Back Office Service
Once your loan has completed the administration of your loan will be carried out by LAMAC our back office partner.
LAMAC contact customers once AHL have completed your loan to arrange set up of a system for repayment.
If there is a change in the amount you need to repay, LAMAC will contact you directly. They will also provide you with annual statements of your loan account.
However, if you have any difficulties in meeting your repayment commitments it is important you contact AHL as soon as possible. AHL has qualified Financial Advisers who will help you deal with the problem positively and sympathetically. Your options will be explained and it may be possible to switch the type of loan you have to one which does not require monthly repayments.
AHL’s Financial Advisers can be contacted on 0121 327 3344 or email Peter Lewis - Senior Financial Adviser on plewis@mercian.org.uk.