Vow Voice 7th February 2019

The Resi Renew/Restart product range can cater for nearly all loan scenarios.

Business we are seeing right now

1. Debt Consolidation - The refinance of multiple debts to one manageable payment continues to show strong enquiry. Near Prime allows for late payments on the home loan as well as unsecured debts like credit cards and personal loans - clients can refinance an "unlimited" amount of debts up to 90% Full Doc or 80% Alt Doc

2. ATO Debt - requests for ATO debt consolidation remains strong with clients having met with their accountant, completed their returns and now looking at placing their tax debt on arrangement. Recent feedback is that the ATO will no longer allow this to be paid back over long periods with most arrangements being 6-18 months. For a $100,000 tax debt, this places significant stress on the business cashflow which this is paid back - and at a 9% interest rate. The ATO also now has the power to report amounts outside of arrangement and > $10,000 to credit reporting agencies - We can consolidate these debts on Near Prime.

3. Company/Business Debt - Still getting a strong enquiry for consolidation of business debts. Most of these enquiries have the commercial loan (BTL or CRL) coming off interest only and the remaining P&I term is 5-10 years. These leave the borrower with large monthly P&I payments again causing cash flow issues on the business. We can consolidate these debts on Near Prime

Resi can help with the above by offering the following product niches with our Renew / Restart product range.

• Alt Doc + Accountant Letter or BAS or BBS
• 6 months ABN Registration
• Vacant Land Purchase
• Construction
• ATO debt
• Late payments
• Discharged bankrupts 1 day
• Defaults listed >24months ago
• Unlimited debt consolidation
• Business loans/cash out
• Unlimited cash out
• FTB and CSA (any aged kids)
• Favourable purchases
• PAYG 1 day in role INC probation
• Workers Compensation
• Non Genuine Savings
• No Notional Rent
• VISA's - 309, 457, 475, 487, 820, 100, 119, 120, 121,
  126, 134, 175, 176, 801, 855, 856, 857, 885, 886, 887

Plus

• 24hr SLA
• Servicing Calculator - OFI repayments at actual payment + 25%
• No credit scoring
• No Risk fees on most LVR bands
• Direct access to credit manager
• 95% LVR purchases / 90% refinance (full doc)
• 85% LVR purchases / 80% refinance (alt doc)

Policy Tip

Capacity Tests - The biggest reason we get declines for debt consolidation is due to clients not meeting out the capacity test. How do these work? Pretty simple...

1. While we accept clients with late payments or in arrears we need to ensure that the clients can meet the ongoing monthly commitments once we refinance them

2. Our credit managers will do up a simple spreadsheet (similar to the one below) listing down ALL debts and what the client has paid on these debts - evidenced over the last 3 months

3. On the below example the client is looking to get a new loan for $500,000 with payments of $2,836 per month - we need to show the clients have AT LEAST been paying $2,836 per month across all their current debts. As you can see below the clients paid $3,270, $2,910 & $3,630 - each month they paid more than the new proposed payment which would be a pass

4. If the client had a month where they didn't pay $2,836 then this would fail capacity and the loan would be declined

The below is a capacity test that Resi gives to brokers that are looking to submit a debt consolidation loan - Not only does this pre-qualify the client BUT is also looks very good in credits eyes when these are sent in with the application!

For further information or to discuss a scenario please contact the Resi scenarios team on 1800 737 448 or email scenarios@resi.com.au

Download the rate sheet here.

The year has only just begun and we're welcoming new members, including beginners, to the Vow Social Golf Club - a club for all brokers.

Here are some reasons why you should join in 2019:

Knowledge - an experienced group of knowledgeable brokers who meet for a game mid-week in a healthy and fun environment to exchange ideas.

Connections - We have a bank BDM come along to every round and share with us the latest news from the lender, creating great network opportunities.

Health - Golf provides a stimulating mental challenge combined with a healthy walk in pleasant surroundings and can be played by people of all abilities.

Longevity - long standing and committed network, meeting without interruption since January 2007, it has survived continuously because of the networks experience and knowledge.

Unique - the Vow Social Golf Club is unique to the Financial Services Industry in Australia and is the only group of its kind. Membership is restricted to Vow Brokers, management and support staff only.

Membership information:

Annual Fee of $150.00.

Download the Information Flyer here

In Australia, consumers have a number of channels they can use to obtain a mortgage. The most significant channels today are via a mortgage broker (broker) or direct with a lender (as known as the proprietary channel), with a minority of consumers using an online lender or bank.

Over the last three decades, demand for loans originated by a broker has risen steadily. Today, 59 per cent of all new residential home loans are written via the mortgage broker channel. (MFAA, 2019)

During the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, there has been significant focus on mortgage broker remuneration and its impact on consumers. In particular, there have been suggestions that Australians would be better off paying a broker a fee for their service rather than a broker receiving commission from a lender.

This report analyses the third-party mortgage distribution channel in Australia, its role in driving competition and ultimately what value it delivers to consumers.

The objective of the 'Consumer Access to Mortgages report' is to consider consumer satisfaction and the implications for Australian borrowers in any change to the current remuneration structure of mortgage brokers.

There are three major sections to this report:

Section one explores competition in Australia's mortgage lending market and consumer satisfaction with the broker and proprietary channels.

Section two analyses the current broker remuneration structure and explores its impacts on consumer outcomes, including consumer sentiments towards the current structure.

Section three considers the alternative; the economics and implications of a fee-for-service model in mortgage broking.

Download the report here.

VowNet: The Fundamentals Webinar Series

Please join Vow Financial and Salestrekker for The Fundamentals of Vow Net webinar series.

This webinar series will be conducted by our partners, Salestrekker and will cover the fundamentals of using Vow Net. These webinars run fortnightly and you must register in advance to attend.

The webinar will cover the following topics:

- Quick Tools (where to go to access funding worksheet, max borrowing, product search calculators)
- How to enter a Basic End to End Deal
- Client Portal Preview (what the client can see and do in the portal)
- Broker Tools (how to collect data for your application)
- Create Compliance documents
- Submission and where to for help and support

Click her to register for the webinar date and time of your choice
The first fortnightly session commences on the 13th February 2019
CPD Hours: 0.25

Vow Financial and CoreLogic: A National Housing Market Update Webinar

Please join Vow Financial and CoreLogic for A National Housing Market update webinar.

In this webinar Cameron Kusher, Head of Research Australia will an provide update on the current state of the national housing market and where CoreLogic sees it going in 2019.

He will provide a closer look at the following data:

- Dwelling values
- Sales volumes
- Days on market
- Discounting
- Housing supply
- Mortgage demand
- Rental markets
- Rental returns
- Outlook for 2019

GoTo Meeting Link: CoreLogic: National Housing Market Update

Thursday, February 21, 2019 1:00 PM - 2:00 PM AEST
CPD Hours: 0.50

Due to a sustained increase in the cost of funds ME Bank are increasing the interest rate for existing variable rate home loan customers by 18 basis points effective 7 February.

ME Bank are also increasing new business variable rates by 8 basis points effective 4 February following a 10 basis point increase to most of our advertised new business variable rates in December 2018.

ME Bank believe it is appropriate to share equally the impact of increased funding costs across both new and existing home loan customers.

Even after these changes ME's variable reference rates remain some of the most competitive in market.

Lenders ranked according to the price of four different variable home loans:
1) owner occupier principle & interest loans;
2) owner occupier interest only loans;
3) investor principle & interest loans;
4) investor interest only loans.
*SVR=Standard Variable Rate.

ME Bank advises that they will continue to assess market conditions and make pricing changes to maintain the appropriate balance between a reasonable rate of return for shareholders and fair and competitive interest rates for customers.

source: https://www.mebank.com.au/news/me-makes-interest-rate-changes/

Citibank's Basic Mortgage allows your clients to enjoy a low rate of interest with a great range of features including the ability to make extra repayments at no additional cost.

Features as part of the Citibank's Basic Mortgage offer include:

• No Account keeping fees
• Redraw facility
• Flexibility of repayments with weekly, fortnightly or monthly options
• The freedom to make extra repayments without penalty

Please note the promotion conditions below:

• Effective 16 January 2019. For new to bank applications only, does not apply to current pipeline or variation applications.
• Rates are subject to change at any time.
• Application fee of $399 applies. Other fees including legal fees and valuation costs may apply.
• No purchases or pre-approvals allowed.
• Loan Repayments are solely Principle & Interest.
• Salaried/PAYG applicants only.
• Maximum Loan to Value Ratio is 80%.
• Minimum Loan amount - NSW & VIC > $500,000, QLD, SA, WA, NT and TAS > $250,000
• No "Cash Out" - refinance of residential purpose (Owner Occupied and Investment) mortgages only.
• All loans and securities are subject to Citigroup's credit criteria.
• For Australian citizens and Permanent Residents only.
• No loans to be reliant on foreign income.
• Comparison Rate calculated on a loan amount $150,000 over a term of 25 years based on monthly repayments. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

For more information:
Contact your BDM or call 1300 651 059

Visit mortgagebroker.citibank.com.au