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Credit Union Loan - Bank Prioriy Agreement

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  • 30-04-2015 7:41pm
    #1
    bob2oo7
    Registered Users Posts: 378 ✭✭


    Hi guys

    I have loan approval from my credit union subject to a priorities agreement with the bank

    I have received legal advice from my solicitor and I have approached AIB (whom my mortgage is with)

    AIB however are not very receptive to the idea

    My understanding of it is that in the event of the house needs to be sold (for whatever reason), that AIB will get paid everything they are owed, including any legal fees etc. Any money then left over will be given to the credit union to pay off that debt?

    Is this correct? If so, 2 questions

    1) Any money left over should be mine? So why do I even need AIB to agree to this?

    2) Why wouldn't they agree to this? They still get their money, anything left over wouldn't be theirs anyway?

    Am i understanding this correctly? or missing something?

    My solicitor has worded it as a 2nd charge on the mortgage

    Is a 2nd charge and priority agreement the same thing?

    Thanks in advance


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    #2
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    Never heard of a priorities agreement. Might be new terminology. However it seems like your CU is asking for a 2nd charge on your property which is a legal mortgage (just like the one you have with AIB).

    The CU will not be likely to proceed if AIB are unwilling to note the impending 2nd charge. Its called the rule in claytons case, and will effectively prevent AIB from advancing you any fresh monies after the CU lends to you, unless on an unsecured basis. The reason AIB are unhappy, is that ANY loan they give you, whether personal or credit card or overdraft is currently covered under their 1st legal mortgage. Their position is weakened if they allow/note the 2nd charge.

    You can check out Claytons Case on Google if you wish

    Anyway, be sure as to what you want to do before putting your house on the line TWICE, and legal advice is always the best in a situation like this

    Good luck………………..


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    #3
    bob2oo7
    Registered Users Posts: 378 ✭✭bob2oo7


    George Bernard wrote: »
    Never heard of a priorities agreement. Might be new terminology. However it seems like your CU is asking for a 2nd charge on your property which is a legal mortgage (just like the one you have with AIB).

    The CU will not be likely to proceed if AIB are unwilling to note the impending 2nd charge. Its called the rule in claytons case, and will effectively prevent AIB from advancing you any fresh monies after the CU lends to you, unless on an unsecured basis. The reason AIB are unhappy, is that ANY loan they give you, whether personal or credit card or overdraft is currently covered under their 1st legal mortgage. Their position is weakened if they allow/note the 2nd charge.

    You can check out Claytons Case on Google if you wish

    Anyway, be sure as to what you want to do before putting your house on the line TWICE, and legal advice is always the best in a situation like this

    Good luck………………..

    Cheers for the info... makes a bit more sence now

    I have also approached them to ask about a top up on the mortgage but because I started a new job recently, they said I have to wait 6 months before I can apply.


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