I received a memo from my solitors last week where they explained in detail the proposed interest free loans by Grehan and McNamara. Some details explained that may not have reached the public domain and clearly highlights the insanity of it all - they firm (won’t name them for obvious reasons) were clearly against the idea and warning all their clients not to consider such madness…
Some details on the schemes
McNamara is offering 30% “loans” to facilitate the purchase of apartments in the new Elm Park development. If these are paid back within 5 years, the amount payable is the 30% “loan” with no interest being charged. **If the loans are repaid beyond five years, Mr McNamara’s company will be entitled to 3% interest per annum in addition to the repayment of 30% of the value of the property, at that point in time, whether or not this exceeds the principal amount lent (the 30% “loan”). If the loans are not repaid within 8 years then Radford would be entitled to repossess the property pursuant to a second mortgage over the property. **
Grehan is offering loans of 15% of the purchase price of homes in its Grange, Ballintyre and St Edmunds developments. These loans are to be repaid within 7 years and the amount to be repaid is 15% of the then current value of the property, determined by the average of two professional valuations, even if the value of the property has declined since purchase. There is no interest payable on these loans. Again, a failure to repay the loan within 7 years could result in repossession of the property.