Vow Voice 23rd August 2019

With the ever-changing lending market, RESI remains your dedicated YBR Lender of choice

Product Highlights:

• Construction up to 90% LVR
• Investment Purchase and refinance and construction
• Owner occupied Purchase, refinance, cash out and construction
• No need for Genuine savings if LVR is below 90%
• 6 months rental statements can be used as genuine savings contributions
• FHOG can be used as funds to complete (released at slab stage construction)
• Cash out up to $250,000 with just letter from applicant for use.
• Vacant land purchase up to 95% LVR (90% for Investment) INC LMI
• Flexable maternatity income policy
• Tax debt can be refinanced as a Prime application

Acceptable income type:

• Disability Pensions - exempt from asset/income test, i.e. Permanent Blindness
• Widow Pensions
• Foster Care Payments
• Supplement Payments (related to certain pensions)
• Defence Force Reserve Income
• Family tax A & B (child must be under the age of 12)
• Employee allowance, Bonus, Commissions, Overtime
• Self employed more than 2 years
• 6 Months Casual or contract employment
• No Min employment term for Perm or Perm Part time applicants

Rural Security:

A Home Loan Product can be offered up to a maximum LVR 70%, subject to the following criteria being met:

• Less than 50 hectares (120 acres) in size
• Property not generating (or be 'intended' to generate) gross trading income of more than $20,000 per year and
• Any debt servicing not being reliant on the trading income generated from the Rural Property

Current Smartpro Promotion:

NO ongoing fees, NO valuation fee (standard valuation), NO application fee and only $330 legal fees.

**** 2 year fixed rate now 3.17% P & I**

For any scenarios or detailed policy questions please email brokersupport@resi.com.au or call 1800 737 448 (Option 1)

By Paul Bennion, Managing Director, DEPPRO

DEPPRO is finding that the start of 2019/2020 financial year has seen a big upswing in investors buying apartments.

Traditionally, buying apartments has been very popular with investors at the start of a new financial year for taxation reasons.

Many investors decide to buy an apartment after visiting their tax agent who point out the tax benefits of such an investment including depreciation.

For example, the tax benefits obtained through depreciation can be equivalent to 60% of the total purchase price of apartment. In some cases these tax benefits can total $300,000 based on a purchase price of $500,000.

DEPPRO if finding that there has been even stronger interest amongst investors in buying apartments for property investment reasons at the start of this new financial year due to a number of factors.

Firstly, the price of apartments has declined significantly especially in the inner city markets of Melbourne, Sydney and Perth due to oversupply factors.

At the same time, interest rates have fallen for investors while obtaining an investment loan is much easier due to greater competition amongst lenders and the easing of lending restrictions imposed by APRA.

With more interest rate cuts being predicted over the next twelve months, DEPPRO predicts activity by investors in the apartment market will continue to increase.

If an investor is planning to buy an off the plan apartment or a new/ established apartment in the coming months, there a simple tips they should consider to ensure they achieve the best financial outcome.

*When buying an off the plan apartment, it is important to research the track record of the developer to ensure they deliver what they are promising. One good tip is to speak to some of their previous clients who also bought off the plan and now hold a fully completed apartment from the developer.

* Make sure you claim your full tax benefits associated with owning an apartment for investment purposes. For example, tax depreciation benefits can be substantial and can add up to several thousand dollars each year in tax savings for a single apartment.

* Check the exact internal floor space of the apartment. The price of the apartment should be measured in the cost per square metre and this will give you a good comparison compared to similar apartments in the same area.

* Before purchasing an apartment, check the average weekly rent for a similar apartment in the same location. This will give you an indication of future rental returns.

* Check the quarterly strata fees and if there are any plans to upgrade the complex.

* Check how many apartments in the complex are owner occupiers. Owner occupiers tend to take a much more active interest in the upkeep of the complex. If more than 50% of the apartments are owned by owner occupiers then the complex should be well maintained.

* The views that the apartment can offer is important. If you are buying an apartment with good views, check that nothing in the future will interfere with these views i.e. the construction of a new building in front of your apartment.

* Parking is also very important when buying an apartment. Check that your apartment has a dedicated car bay and the ownership structure of car bays in the complex.

* One bedroom apartments as opposed to two and three bedroom apartments are very popular because more people are tending to live alone.

* Obtain finance approval before making an offer on an apartment as this will increase your negotiation position.

We've collated a few of the lender updates that we've recieved over the last week. Make sure you are aware of the these lender updates.

AMP Bank Commission Arrangements Implemented

At AMP Bank we're constantly looking for ways to improve outcomes for our customers and business partners. In line with our focus on continuous improvement, we have reviewed our approach to commission arrangements implemented in January 2019 as part of the Sedgwick recommendations.

What is changing

Effective immediately, we will cease clawbacks for decreases in loan utilisation. We will retrospectively apply this new methodology from 1 January 2019.

At the same time, we will continue to apply the following:

• At 180 days after settlement, a review will allow for payment of additional commission should overall loan utilisation increase
• Apply clawback for full and partial loan discharges as per current timeframes

What this means for you

In the interim and as we go through the process of updating our system to reflect our revised position, utilisation commission payments and clawbacks will continue to appear on your monthly statements. However, we will make a manual adjustment to reverse the transactions if they have occurred due to an overall net utilisation decrease.

For more information on the process please review the FAQs or reach out to your Business Development Manager with any questions.

We thank you for your continued support.

Kind regards,
Adrienne Smith
Director, AMP Bank Distribution

ANZ Application Assessment Times Update

CBA Serviceability Rate Updates

Calculating the Assessment Rate

• System, Servicing Calculator and CommBroker have all been updated with the new Serviceability Rates.
• The Servicing Calculator will automatically calculate the assessment rate on Continuing Commitments once you input the current interest rate.
• For example on a Standard Variable Rate in the Proposed Loan Details, you must enter the assessment rate as the higher of the following:
  • 5.75% p.a.
  • Loan Rate + 2.50% p.a. less any discounts given
  • 5 Year fixed rate less any discounts given

• For a full table of assessment rates per product e.g. Extra, VLOC and Fixed visit CommBroker

Dept to Income Prompt

• The Serviceability Calculator has now been updated to display the following prompt when the DTI is higher than 6 "The debt to income ratio is high. Ensure all income sources and account variations are captured accurately"
• An application can still be submitted with a high DTI.
• To support an application, provide detailed comments on the stability of the customer's overall income position. Credit will consider your comments during their assessment. For example
  • High income stability (such as income predominantly comprising of base income, net profit or consistent sources).
  • High stability of employment (with details of years in current employment, same industry or current business).

For more information visit CommBroker

2019/20 Tax Rates, Medicare & HEM

We recently updated our systems to reflect the new 2019/20 Tax Rates, Medicare Levy & Living Expenses Thresholds - you can download the new calculator from CommBroker.

Adhering to these thresholds is an important regulatory requirement that ensure our customers can continue to service their loan and maintain their financial security.

We understand that some impacts of these changes may be frustrating, particularly considering conversations previously held around borrowing capacity.

These benchmarks are set through a variety of factors, including inflation, wage growth, and the overall cost of living, all designed to enable us to adequately protect our customers against future economic changes that may impact their financial position.

As always, we will review your feedback and explore options to continue providing support in future.

NAB Broker Website Refresh

As the bank behind the broker we're always looking at ways to make it easier for you to do business with us.

We have refreshed NABbroker.com.au today to bring you a new look and feel website which is more intuitive and secure. This is the first of many planned updates to the site.

How will Brokers be notified of these changes?

Brokers should have already received communications in July about the new refreshed site. NAB will be re-communicating to brokers also this week that will include the Quick Reference Guide in the BDM Update.

Which browsers does the portal work best with?

The website will work best if viewed on the following browsers:

• For desktop: Google Chrome (latest version and version minus last), Internet explorer^® V11, Safari 10.0+, Firefox^TM(latest version and version minus last) or Microsoft Edge 15.
• For mobile: Safari 9.0+, Chrome mobile browser (latest version and version minus last) or Samsung default browser 4.0

Further information/support:

• Check out the Quick Guide NAB have put together to help you see what's changed and find the sections you need.
• If you still have queries about portal access, please contact the Broker Response Centre Team at brokerresponsecentre@nab.com.au or 1300 622 276 for more information.

In addition to the new website - there is lots happening at NAB which they have communicated over the last couple of weeks.

Last week NAB launched their Spring Home Loan Campaign - 'The Story of Progress'. Supported by their new affordability and buffer floor rates, as well as their current pricing offers, you'll see the campaign promoted across a number of channels including TV, radio and social media.

The campaign will showcase the following ways they offer support and flexibility to brokers and their customers:

• Flexi repayments - the ability to modify repayments, switch loan type, take a repayment breather
• Cash back offers - new lending and refinance customers get $2,000 cash back when they take out a home loan with NAB - for all NAB offers refer to http://partner.nabbroker.com.au/offers/
• NAB Check-in - our email program which checks in with customers and provides insights to ensure they're making the most of their NAB product/s
• Tools & calculators - property reports, borrowing/repayment calculators, loan selector tools
• The NAB App - a quick view of equity, redraw access, My Goals section to save towards a property

Any questions / issues relating to the information contained here please direct to Kristy Clucas on Kristy.Clucas@nab.com.auor Nicole Triandos on nicole.triandos@nab.com.au

St George Home Loan Process Update

Background

Today, we're announcing some changes to the home loan process when submitting a home loan through business channels.

What do you need to be aware of?

• From 17th August 2019, Consumer Only will be making home lending changes to ensure we continue to meet the needs of our customers, communities and regulators responsibly. As part of these changes, Consumer will be introducing new application forms with updated expense categories. New rules will also be in place for calculating the Debt to Income Ratio.
• As a result, there is a change to your current process for home loans submitted via Business Bank channels.

What do I need to do?

From Monday 19^th August 2019 you must:

• Stop using ApplyOnline to submit deals via SBG Business Banking
• Download and complete a separate home loan application form titled Home Loan Application Form - SME and Commercial (Form ID: STG32015 0419, BSA30500 0419, BOM32015 0419).
• Document the Requirements and Objectives (R&O) conversation via the Responsible Lending - Requirements and Objectives Form
• Access the SBG Broking portal for the forms
• Include your Aggregator name, your name and Agent ID on the application form - if you do not enter all the required information, you may not receive your commission correctly

Please note:

• If you submit the wrong application form, you will be asked to re-submit using the Home Loan Application Form - SME and Commercial (Form ID: STG32015 0719, BSA30500 0719, BOM32015 0719)
• Whilst your Business Banker will liaise with the customer to complete the serviceability assessment, you will still need to meet your own preliminary assessment as part of your Responsible Lending obligations before paperwork is submitted

When is this happening?

From Monday 19^th August 2019, you must download and use Home Loan Application Form - SME and Commercial and Responsible Lending - Requirements & Objectives Form when submitting a home loan via business channels. You can no longer submit via ApplyOnline from Monday 19^th August 2019.

More Information

Please contact your local Commercial BDM if you have any questions

Commercial Intermediaries

St.George Banking Group