Investors Information

 

Key Facts for Investors:

  1. 1st Mortgages held by Farm Mortgages Ltd on your behalf on reliable non- consumer credit properties usually dairy, beef or other types of farms.
  2. Mortgages last for 3 years (or 2 or 4 by agreement) with a possibility of early redemption for a small fee if we can arrange for another investor to take your place.
  3. Interest of at least 7.00% on your investment paid to you every three months.
  4. Minimum contribution is $5,000.00.
  5. You know where your money is and have a share in a specific mortgage (rather than a pooled fund).

 

 

Lending Particulars:

This Company has for very many years made arrangements in which Borrowers are enabled to borrow on Mortgage Security from other investors of this Company on the following basis:-

1).  Security:

  1. These advances are only on 1st Mortgages as we do not arrange Second Mortgages unless in special circumstances. We have first priority on a sale as we hold the Title on behalf of the Investors.
  2. The Mortgages are normally Dairy Farms or other farms in the Western District of Victoria. We also receive requests for other rural properties in other areas of Victoria or Sheep or Cattle properties.
  3. The very maximum that we would lend on is 70% of the valuation and we normally prefer under 60% of the valuation.

2).  Requirements:

  • All our Mortgages are required to comply with the guidelines laid down by the Australian Securities and Investment Commission (ASIC) and our own Financial Auditors and Compliance Auditors reporting to ASIC.

3).  Title:

  1. The 1st Mortgages are held (because they are normally contributory Mortgages with a number of lenders) in the name of Farm Mortgages Ltd as trustees for the various investors in the shares in which they contributed towards the Mortgage. This is normally necessary now because the amounts needed for such Mortgages have become larger as farms have become larger.
  2. If you would prefer that the Mortgages are held directly by you, then provided of course you can provide the whole of the money for a particular Mortgage then there would be no problem as to this.

4).  Term:

  • The Mortgages are normally for 3 years but are sometimes for 2 years and very occasionally, if all parties agree, for 4 years. If the Mortgage is conducted satisfactorily, prior to the expiration of the term, we will contact you with regards to potentially extending your investment for a further three years. As an example one of our oldest Mortgages was running for over 36 years.

5).  Early Redemption:

  1. If you needed to obtain your money earlier than the expiry of the term of the Mortgage, we should normally be able to make the necessary arrangement for the transfer to another investor within 3 or 4 months or less.
  2. The only costs of such a redemption would be our charges for arranging for further investors to take over the Mortgage which would be 1.1% of the principal invested provided that the Mortgage was held in the name of our company. If the Mortgage was held in the name of yourself, then of course it would be necessary to pay any additional legal fees, disbursements and Stamp Duty on the Transfer of the Mortgage. Thus if there was any chance that you might need to redeem early, it would obviously be preferable to hold the Mortgage in the name of the Company provided of course your regulations allow it. There is no extra charge for the Mortgage being held in the name of our Company.

6).  Deductions:

  • There is no charge to the Investor for establishing the Mortgage or administering the Mortgage. Our administration costs are met by an additional slice of interest added to the quarterly instalments payable by the Borrower but this does not affect you or the interest that you will receive.

7).  Procedures:

  • We would send you full details of the particular Mortgage and a copy of the Valuation and Mortgage Authority for your approval and signature before you commit any funds at all.

8).  Your Audit Requirements:

  • We should be happy to comply with any annual requirements of your Auditors either by writing confirming the details of any investments held by you or alternatively if they would prefer by showing them the particular Mortgages.

9).  Current Yearly Rate of Interest:

  • This is currently steady. See our Rates pages for the current rate applicable. The rate payable under a respective Mortgage would routinely be varied once a year to the current rate, unless an investor required at the start of the Mortgage that his interest rate be fixed for a longer period and the Borrower agreed.

10).  Amounts Applicable:

  • Most Mortgages are under $1,000,000.00. The minimum contribution would be about $5,000.00. Larger investments may need to be split amongst various mortgages, thereby limiting any risk to your investment and potentially allowing for a steady source of income. A Lender who wished to invest say for example $150,000.00 might make contributions to 2 or 3 Mortgages if preferred.

11).  Advantages to You:

  • The Lender has a specific share of a specific Mortgage which your Auditors can inspect if they wish at any time, unlike in a pooled fund where you only receive a piece of paper acknowledging a loan to the Company and do not have a particular share of any particular Mortgage and never know in what mortgage or mortgages your money has been invested.

 

We look forward to hearing from you.  

 

 

 

 

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