Frequently Asked Questions
What is Money Mog?
Money Mog is the brand name of a property backed peer to peer lending product operated by The House Crowd Limited. It is designed for people with medium to long term investment goals who wish to invest regular monthly amounts and occasional one off lump sums.
What is peer to peer lending?
Traditionally people put money in a bank account and the banks lend money to borrowers and make their money from the interest paid. ‘Peer to peer’ (P2P) simply means to you are lending directly to a borrower via a P2P platform and, by cutting out the banks, you get to earn a larger slice of the interest paid.
What is The House Crowd?
The House Crowd Limited is a peer to peer lending platform authorised and regulated by the Financial Conduct Authority ((FRN 725648). It has been trading successfully since March 2012.
The House Crowd is also an authorised ISA manager.
You can read our Trust Pilot Reviews here
What is an ISA?
An ISA is used by savers and investors to store capital, earning interest tax-free. The tax-efficient wrapper has traditionally come in types: Cash ISA and Stocks & Shares ISA. In 2016, the government introduced an third main category: The Innovative Finance ISA. Money Mog’s Innovative Finance ISA offers you the ability to join forces with other investors to make loans to property developers and other property owners secured against the value of the borrower’s property.
How is the Innovative Finance ISA different to other ISAs?
In simple terms, the rates offered by the Money Mog Innovative Finance ISA are higher than the rates offered by Cash ISA providers. It allows investors in the lucrative peer-to-peer property lending market to take advantage of the tax incentives offered by an ISA. An Innovative Finance ISA lets you use your tax-free ISA allowance while investing in peer-to- peer (P2P) loans to established property developers and other companies with all loans secured against the borrowers’ property.
But please note that with the chance of higher rewards comes higher risk and that, In contrast to a cash ISA, your capital is at risk and your money is not protected by the Financial Services Compensation Scheme (FSCS).
The underlying investments in an Innovative Finance ISA (peer to peer loans) are not directly comparable to the investments in a stocks & shares ISA as they different characteristics from each other.
Can I have more than one ISA?
Yes. You can spread your annual allowance over different ISAs but may only have one of each type in any one year i.e. one cash ISA , one stocks and shares ISA and one Innovative Finance ISA
How is my money invested and who am I lending it to?
Your money is automatically spread across a diversified portfolio of peer to peer property loans in accordance with our underwriting policies. The majority of borrowers are small to medium sized property developers with a proven track record, though some may be individuals or businesses that own suitable property against which the loans can be secured.
House Crowd Finance acts as the Trustee on behalf of all investors and will instigate legal proceedings on behalf of investors if a loan is not repaid.
How much can I invest tax-free in my Innovative Finance ISA
With Money Mog’s Innovative Finance ISA once you have registered your account and made the initial deposit of £100 you can invest from as little as £50pm and up to a maximum of £20,000 in each tax year.
What checks do you do on borrowers?
We undertake full professional due diligence on every borrower and the loan application, including the borrower’s track record and experience, their solvency and credit history, the land / property values, and we instruct a professional RICS valuation on all properties and a full feasibility study by experienced professionals on every development project.
Can I transfer my existing ISA over to Money Mog?
Yes. Please refer to the transfer section of the website. A £40 transfer fee applies for amounts under £5000.
How is my investment secured?
Your money is secured by way of a legal charge (registered at the land registry) over the borrower’s property which means that, in the event of defaults, the properties could be repossessed and sold to repay investors. However, the value of these properties could fall, which means that you might not get all of your capital back.
While your money is invested (i.e. lent out, it is not covered by the Financial Services Compensation Scheme (FSCS). This is a key difference to placing your money on deposit with a bank or building society, including in a cash ISA, and is part of the trade-off to potentially earning greater rewards.
While your money is uninvested, it will be held in a segregated client account or in a solicitor’s client account and may be protected by the FSCS up to £85,000. However, as the intention is to maximise the returns from your investment it is envisaged that your money will be invested (and therefore excluded from FSCS protection) for the majority of the time, so you should generally assume that you will not benefit from FSCS protection.
What are the risks?
Despite the due diligence we do to mitigate risks, unexpected things can happen. There is always a risk that a borrower cannot repay for some reason and we have to step in to repossess the property or take over the development, sell the properties and the proceeds of sale of the property are not sufficient to repay the loan. Therefore, your capital is at risk and returns are not guaranteed and, in contrast to a savings account, your investment is not protected by the Financial Services Compensation Scheme (FSCS).
Read our full Risk Warning here.
What is the minimum term?
Once your money is invested, the minimum term of investment is 12 months and following that 30 days’ notice is required, subject to our terms and conditions.
How do you make money?
We do not charge investors anything. Our revenue is generated from the fees we charge borrowers and the margin between the interest rate we receive from them and the amount we pay to investors.
Creating an Account
If I create an account does that commit me to investing
No. Joining is free and without any obligation.
How long does ID verification take?
Our ID verification checks can take up to 24 hours. Once you have created your account you will be asked to upload a photo of your ID. You can do this straight away (we’d advise doing this so you’re not delayed when you choose to invest), but you can upload it another time if you don’t have details to hand
To make our ID checks as quick as possible, please ensure you provide photographs of the documents requested and that they are clear and legible
Can I open an account in my partner or family member’s name?
You may, if you wish set up an official trust. Please note that we are only able to pay out the proceeds to you as the account-holder but you are free to distribute it as you wish from that point (although if a trust is in place it must be in accordance with the trust deed). You are responsible for checking the legal and tax implications of any such arrangement.
However, with regard to an ISA account, your annual ISA allowance is specifically for you personally. Your family member’s ISA allowance is for them. You may give them the money to do what they want with, but it legally becomes theirs as soon as you do (and therefore any Money Mog account will be in their name and under their control).
How do I pay for my investment?
You can make one off payments by bank transfer and regular payments by standing order. You may cancel the standing order at any time after 1 year.
How do I add my bank account details for repayment?
Simply select the ‘My Profile’ tab within your account, add your bank account details to the ‘Notes’ section at the bottom of the page. Click ‘Save’ then notify us by email of your account details having been submitted.
Who can invest?
Standard account: anybody over the age of 18 provided investment is allowed by their country of residence.
ISA account: UK residents and tax payers who are over 18.
You will also have to verify your ID and email address before investing as well as agreeing to our terms and conditions.
What is the minimum amount I can invest?
The minimum investment level is £50 per month with a minimum commitment of 12 months. If you stop making monthly contributions before the minimum term has expired, we reserve the right to withhold any interest payments that would otherwise have been due.
If you want to try and reach your investment goals quicker, you can make one off payments at any time or increase your monthly contribution at any time.
How can I track how my money is invested?
You will be able to see a record of the investment(s) made on the dashboard within your account showing how it has been diversified. You will also receive regular progress reports on developments your money has helped to fund.
When will my money start earning interest?
You will start earning interest 14 days from the date your funds are received. This is to give us time to utilise your money and also allows you a cooling off period so you can cancel if you wish without penalty.
Where does my interest get paid to?
You can choose to roll up your interest and reinvest it or have it paid into your e-wallet.
What do I get as proof of interest earned for my end of year accounts?
You will receive an annual statement showing interest earned.
Are there any fees or tax deducted from my returns?
No. Your returns are paid as a gross figure as we do not make any deductions for tax. This is the responsibility of the individual investor. Returns made from an IF ISA are tax free. We do not charge investors any fees.
Post Investment Information
When is interest paid?
Interest is paid twice a year at the end of October and April
You can choose to withdraw it or roll it up and compound it to maximise your tax-free nest egg.
Can I compound my interest?
Yes, you opt to do so prior to the interest being paid out. Visit our calculator to show you how much quicker your nest e.g. will grow if you choose to roll up and compound your interest.
Note that when you compound your interest this means that it is re-invested in further loans. Therefore, it will be ‘at risk’ alongside your original capital.
Can I withdraw funds at any time?
The minimum term of our Money Mog ISA is 12-months and you cannot withdraw funds during that time. Following the minimum term, you may apply to withdraw funds on 30 days’ notice and we will repay your capital within that period subject to our terms and conditions.
How much interest will I earn?
Your agreed base interest rate is 3.5% p.a. but you can increase this, by 0.5% for each person you refer to us who invests with us, up to a max of 5.5% in total.
In contrast with a savings account, this is a target rate and is not guaranteed; for example if we had an unusually large number of defaults and bad debt it may affect the rate you would receive.
What are my options after the minimum term?
After the minimum term you may choose to keep your capital invested or withdraw your funds. If you choose to withdraw funds you must give 30 day’s notice for Money Mog to return your money. However, you will not be able to withdraw any part of your money that has been allocated to a loan that is currently in default, until that loan has been repaid.
If part of your fund is invested in a loan that is yet to reach redemption, we will attempt to transfer it to a replacement P2P investors (and hence return your capital). This should be possible in normal market conditions, however it is not guaranteed and in unusual circumstances you may need to wait longer and may need to wait for the loan to redeem before you can access that part of fund. Please see the Terms & Conditions for further details.
What happens if The House Crowd becomes insolvent?
We have a living will agreement in place with another FCA regulated company. In the unlikely event of insolvency, they will take over the business and implement contingency plans to manage investors’ money.
Therefore, your existing investments in loans made via Money Mog would continue to be administered and protected by legal charges against properties.
What is your complaints procedure?
Should you have a complaint you may report it by emailing: email@example.com
You must state your full name and the nature of the complaint. The House Crowd will:
Log the complaint.
Treat the complaint fairly and advise on the next steps.
We will send you an acknowledgement of your complaint within 7 working days and if we can resolve your complaint within 3 working days we will send you a ‘summary resolution communication’ outlining how we can/have put things right/resolved your complaint.
Aim to resolve the complaint within 10 working days.
Provide regular updates until the complaint has been resolved.
Use any complaints to review the area of business to which it relates.
Investors may also contact the Financial Ombudsman Service (FOS), to carry out an independent review of the complaint if they are not satisfied with how we have handled or responded to the complaint. The initial complaint must be forwarded to ourselves for review prior to being sent to the Financial Ombudsman Service, otherwise you will not have our consent to forward the complaint.