Frequently Asked Questions

Repayments

Loan repayments are fixed principal and interest at the same amount each month for the term of the loan.

Valuation

All houses are subject to independent inspection and valuation prior to settlement however valuations are generally in accord with the contract price of the new home.

Loan to Value Ratio (LVR)

The LVR (loan to value) is between 80% to 85% of the home purchase price.

Land Lease Site Agreement

All site agreements have GenMoney noted as an interested party in respect of the lien we have on the home. This is to protect our interest in the event of a homeowners’ default and details the process of repossession, sale, settlement and disbursements for both loan and any outstanding site rent due to the developer or community operator.

Risk

All loans are subject to normal credit worthiness assessment and provide for personal guarantees. In addition, our risk is limited to the house only loan and the provisions in our loan agreement which provides for waiver, warranties and remedies that comprehensively protect and limit our exposure to the value of the loan on the house. 

Licensing

The loan facilities GenMoney provides requires licensing with the Australian Securities and Investments Commission (ASIC) for an Australian credit licence under the National Consumer Credit Protection Act 2009 (National Credit Act).

Term

The term of the loan is generally calculated over a 20-year term with a balloon payment that can be refinanced at each 5 years roll over interval. The balloon or residual payment is set as a percentage of the original loan at between 60% to 70% which has the effect of lowering homeowners’ monthly payments. A balloon payment or residual amount is an amount that's not paid off until the end of the loan agreement. The higher the balloon payment, then the lower the homeowners’ monthly repayments.

Insurance

There is a mandatory loan and home replacement insurance policy. The premium for this is calculated and included into the monthly mortgage repayments and GenMoney is noted on the policy as an interested party. 

Market Size

The size of the existing land lease market is estimated at circa 10,000+ new homes annually but is growing exponentially. There are forecast demands exceeding 50,000 homes per annum as new and larger industry heavy weights recognise this very lucrative housing development option. More significantly however is that our new home loan model opens the market to all age and buyer types with the inevitable growth likely to propel house numbers into the tens of thousands as home buyers come to realise the cost effectiveness of this model compared to conventional housing.

Stamp Duty Implications

There are no stamp duty costs for the purchaser of a home in a land lease community.

Responsible Lending

GenMoney is required to comply with the responsible lending conduct obligations in Chapter 3 of the National Consumer Credit Protection Act 2009 (National Credit Act). These include those steps mentioned at “Risk” and include making reasonable inquiries about loan applicants’ financial situation, their requirements, and objectives, and taking reasonable steps to verify an applicant’s financial situation.