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Frequently Asked Questions about the Contributory FundWhat is a contributory mortgage investment? What return is paid to investors? How do I invest in the Contributory Fund? What information does the investor receive? When does the investment commence? Can I make additional investments? Is early withdrawal of my investment available? What happens if the loan is repaid early? What happens upon maturity of a Sub-Scheme Investment? How secure is a mortgage investment in the Contributory Fund? What fees will I be charged to invest in the Contributory Fund? Who can invest in the Contributory Fund? What happens to money held in the Cash Management Trust? What is a contributory mortgage investment? Investors are offered the opportunity to invest in a specific loan secured by a registered mortgage over legal interests in real property in Australia. Each approved loan in the Contributory Fund constitutes a Sub-Scheme, which is distinct from any other Sub-Scheme. Your entitlement to income or capital is based entirely on your investment in a chosen Sub-Scheme and therefore you have no rights to the income or capital of other Sub-Schemes in the Contributory Fund. A Sub-Scheme or mortgage loan may have more than one investor. No new investor will be placed in a Sub-Scheme that has a mortgage loan which is in default. Applicants should note that there is no right to withdraw from a Sub-Scheme after your Approval Form has been received and your mortgage investment moneys have been allocated to the Sub-Scheme by VMIL. What return is paid to investors? The interest rate offered for investments in Sub-Schemes of the Contributory Fund will vary from time to time due to changes in market interest rates. However for Fixed Interest Rate loans, once an Approval Form is accepted for a particular Sub-Scheme, the interest rate is fixed for the Investment Term. How do I invest in the Contributory Fund? To invest in the Contributory Fund, you must complete the Contributory Fund Application Form contained within the Product Disclosure Statement and return it to VMIL, along with a cheque for the investment amount. Upon acceptance of your Application Form, unless you have already approved a particular Sub-Scheme, your investment money will be held in the Cash Management Trust pending allocation to one or more Sub-Schemes. You will be sent a confirmation statement. What information does the investor receive? The Investment Advice will provide the following information about the Sub-Scheme:-
When does the investment commence? The Investment Term will commence on the day the investment funds are allocated to the Sub-Scheme by VMIL. Can I make additional investments? You may add to an existing Sub-Scheme investment in additional amounts of $5,000 at VMIL's discretion but only if the interest rate for the additional investment is the same as the interest rate for the initial investment. Completion of a new Approval Form will be required in this situation. Is early withdrawal of my investment available? There is no entitlement to withdraw from a Sub-Scheme investment before the Review Date. An application to redeem the mortgage investment before the Review Date due to unforeseen exceptional circumstances or hardship will be considered, provided a substitute investor can be placed into the investment. An Early Withdrawal Fee will apply. What happens if the loan is repaid early? Repayment of a loan by a borrower before the end of the Investment Term may occur in situations which are generally outside of VMIL’s control (e.g. sale of the security property by the mortgagor). Early repayment will be subject to the terms and conditions of the mortgage loan and may attract an early repayment charge. Following repayment of the loan, you will be offered an alternate Sub-Scheme investment, or you may elect to withdraw your funds at this point. Pending receipt of your written instructions, your funds will be held in the Cash Management Trust . What happens upon maturity of a Sub-Scheme Investment? When a Sub-Scheme loan is repaid, your funds are held in the Cash Management Trust pending receipt of written instructions. VMIL will send you information about further investment opportunities or you may elect to withdraw your funds at this time. In some circumstances, a Sub-Scheme loan may be extended. Each Sub-Scheme loan is reviewed by the Review Date set out in the Investment Advice. If the loan conduct has been satisfactory, an offer of Renewal may be made to the borrower. A new valuation of the Sub-Scheme property is obtained. At this point, VMIL will write to the investors in the Sub-Scheme to inform them that Renewal negotiations have commenced with the borrower and to quote an indicative interest rate for the new Investment Term. You may elect to redeem your mortgage investment as at the Review Date or you may elect to renew. When the loan renewal process has been satisfactorily completed, you will be provided with a Renewal Form, detailing the new Review Date and interest rate. If you wish to renew your mortgage investment on the terms offered, you are required to sign and return the Renewal Form. If you wish to redeem your mortgage investment you must notify VMIL in writing within 14 days of receipt of the Renewal Form (or such longer period as VMIL determines). Please note - If the borrower indicates that the Sub-Scheme loan will be repaid or if VMIL declines to renew the loan, repayment of your funds will not be available until the loan repayment is effected. In this situation, you will be advised of an estimated time frame for repayment. Interest will continue to accrue beyond the Review Date until the loan is repaid . How secure is a mortgage investment in the Contributory Fund? Return of capital invested in the Contributory Fund is not guaranteed. Your Sub-Scheme investment is secured by registered first mortgage over real property which is the subject of an independent valuation obtained at the time of loan approval. The LVR for each Sub-Scheme is disclosed as part of the application process. You should make your own assessment before approving the allocation of your money to a particular Sub-Scheme investment. What fees will I be charged to invest in the Contributory Fund? No application, withdrawal or on-going fees or charges are generally imposed on investors in the Contributory Fund, if the Sub-Scheme investment is held to maturity. If a management fee is to be deducted for a particular Sub-Scheme, this will be disclosed in the Investment Advice. Who can invest in the Contributory Fund? Investments are open to individuals, partnerships, trusts, superannuation funds and incorporated bodies. What happens to money held in the Cash Management Trust? Money held in the Cash Management Trust earns income at the rate paid by the Bank and is credited to your nominated bank account after deduction of VMIL’s management fee. The earning rate is currently 5% per annum, calculated daily and payable monthly in arrears but you should be aware that past performance is not a reliable indication of future performance. The rate may vary depending on the total sum invested on behalf of all members from time-to-time. The rate may also be affected by changes to the cash rate or monetary policies of the Reserve Bank of Australia from time-to-time. Money held in the Cash Management Trust is represented by units. Unit holders have a beneficial interest in the Cash Management Trust in the proportion that the number of units held bears to the total number of units issued in the Trust. You may withdraw your money from the Cash Management Trust at any time by giving VMIL 48 hours’ prior written notice. The minimum withdrawal amount is $5,000. (If your withdrawal request would result in your Contributory Fund investment falling below $5,000, VMIL may treat the request as being for a total withdrawal from the Contributory Fund). << Previous | Background | Directors | Directory | Chart | Next >> |
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Victorian Mortgage Investments Limited - Invest in consistent and attractive returns backed by the security of registered first mortgages over quality real estate
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