Credit Guidelines Booklet. Credit Guidelines Booklet

Transcription

1 Credit Guidelines Booklet Credit Guidelines Booklet Version 1603 Issued May 2016

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3 Table of Contents Loan Provision Page How to read the Credit Guidelines Booklet... 2 Program Description... 3 Acceptable Loan Purposes... 3 Excluded Loan Purposes... 3 Cash Out Policy... 3 Lender's Mortgage Insurance (LMI)... 4 Acceptable Security Properties... 4 Unacceptable Security Properties... 5 Maximum Loan Amounts... 5 Applicants... 5 Serviceability Requirements... 6 Acceptable Income and Documentation Required...6 Genuine Equity Guarantees Treatment of Rental Income Purchase of Security Property Refinance of Security Property Loans Secured Against Clear Title Vacant Land Loans Construction Loans Procedure and Documentation FASTLend Security Location Guide FASTLend Serviceability Calculator Instructions FASTLend Serviceability Calculator Example

4 How to read the Credit Policy Guidelines Booklet How to read the Credit Guidelines Booklet FASTLend Loan Provision Policy QBE LMI Insurer Requirements Loan provisions listed here apply to all lending under FASTLend s loan programs. These provisions must be adhered to for a loan to be funded by FASTLend Pty Ltd ACN Credit Representative (FASTLend). Specific QBE LMI loan provisions which must be adhered to for a loan to be approved by the LMI insurer. These provisions are in addition to any provision outlined for a loan to be funded by FASTLend. If you are unsure of a particular credit guideline please contact your Broker Platforms BDM. 2

5 FASTLend Program Description Individuals Are currently employed and are subject to PAYG taxation; Have been selfemployed, or have been fulltime investors for at least the past two years; Are permanent residents/australian citizens and reside in Australia. Corporate Entities Are currently trading as a registered Australian company and subject to company taxation; Are a trustee company acting on behalf of a family trust; Are a partnership; At least one Director/Trustee/Partner must be an Australian citizen/permanent resident and reside in Australia. Program Description FASTLend Acceptable Loan Purposes Policy FASTLend will consider a loan for any worthwhile purposes. Some exclusions are set out in the Cash Out Policy and Excluded Loan Purposes Policy. Acceptable Loan Purposes FASTLend Excluded Loan Purposes Policy Loans for the repayment of any tax related debt. Loans to repay director s loans. Loans that are for the refinance of any loan that is currently in arrears. Loans that are not arm s length transactions. Loans for the purchase of a new business that will employ the applicant. Loans that are for working capital or payment of personal or business tax liabilities. Loans where the aggregate amount of debt being consolidated exceeds 100,000. Excluded Loan Purposes FASTLend Cash Out Policy QBE LMI Insurer Requirements In addition to any LMI insurance requirements, documentary evidence is required where: Loan to Valuation ratio (LVR) exceeds 80%; or Equity Release / Cash out is > 250,000. Where verification is required, documentary evidence must be provided and must verify at least 80% of the loan amount. Documentary evidence can include, but is not limited to, quotes, invoices, sale contracts, and written professional advice such as financial planner/adviser advice that supports the proposed use of the funds. IMPORTANT: The amount and purpose of the Cash Out must be appropriate and in line with the applicant's financial position. Where LVR >80% cash out will be subject to LMI insurer requirements. All applications are subject to satisfactory FASTLend and insurer (where applicable) credit assessment. FASTLend, at its sole discretion, reserves the right to reject or approve any request for Equity Release/Cash Out. In addition, FASTLend reserves the right to: (i) Limit the disbursement of cashout proceeds. (ii) Control the disbursement of loan proceeds inclusive of cashout proceeds. LVR >75% to 90%: Cash out limited to 100,000. Purpose for use of funds must be disclosed. Amounts >100,000 considered by providing supporting documentation to evidence use of funds. Evidence includes: Builder s quote; Purchase contract; Confirmation from a financial planner or accountant as to the intended use of funds. LVR >90%: No cash out allowed. Cash Out Policy 3

6 Lender's Mortgage Insurance (LMI) FASTLend Lender's Mortgage Insurance (LMI) Policy Required on all where the LVR is greater than 80%. LMI insurers are Genworth Financial and QBE LMI. Some conditions apply. LMI premium can be capitalised up to a maximum LVR of 95% for Owner Occupier purchases only, excluding construction and vacant land purchases. For all other Owner Occupier loans including refinances, construction, and vacant land loans, LMI premium can be capitalised up to a maximum LVR of 93%. For Investment loans LMI can be capitalised up to a maximum LVR of 90%. Where the borrowing relates to a top up on an existing facility, the maximum LVR is 90%, excluding the portion of LMI which relates solely to the top up. LMI and LMI approval is not required for loans where the LVR is 80%, subject to security location. Acceptable Security Properties FASTLend Acceptable Security Properties Policy QBE LMI Insurer Requirements Properties must be in a location which is listed in FASTLend's Security Location guide. Properties must be of a residential nature and zoned accordingly. Properties must be located in Australian cities or major regional centres. Properties must have no more than one existing residence on title. For properties where more than one residence is to be constructed on title, refer to below section Properties with more than one residence on title. Vacant land must be comprised of an area less than 2.2 hectares (5 acres). All standard services must be connected or readily available to the property. All properties must have legal and unrestricted road access. Rural Residential (or similar zoned) properties Units/flats/ apartments Restricted Postcodes Properties with more than one residence on title Must have mains power. The property must not be of an income producing nature (properties producing rental income from tenants are accepted). Properties (with a completed dwelling) must not comprise an area exceeding 10 hectares (25 acres). Each must comprise an area of at least 50 square metres (includes car space and/or balconies). Each must have a separate Certificate of Title. Maximum 80% LVR if high density developments involve offtheplan purchases or completed property purchases directly from a developer. Where an innercity apartment security property, as indicated in FASTLend's Security Location Guide, is not owner occupied: A maximum LVR of 70% will apply where there is no requirement for LMI cover. Applications with a LVR >70% will require Lenders Mortgage Insurance cover, payable by the borrower. Properties located within Restricted Postcodes will be bound by the following LVR limits: Restricted Postcodes Group A: Max LVR 70% for any loan purpose. Restricted Postcodes Group B/Innercity apartments: Max LVR 80% for any loan purpose. Please refer to FASTLend Acceptable Security Location Guide for postcodes which are classified as Restricted. Maximum of 3 dwellings to be constructed on title. Construction of dwellings only with standard construction procedure and documentation requirements to be adhered to. Intent to subdivide or strata title property upon completion of construction to be evidenced by providing plan of subdivision at time of loan approval. Valuation is the lesser of 'as is' (land) plus construction costs or estimated 'on completion' before subdivision or strata title value. Maximum LVR of 90%. LMI insurer policies to be complied with where LMI cover is required. Duplex or standalone properties allowed. Standard construction procedures and documentation processes to be followed. Refer to QBE LMI Location Guide for acceptable property locations and applicable loan size and LVR limits. High density securities may be considered up to 80% LVR where the loan facility is up to 1,000,000. High density securities are => 4 floors and > 30 units and must be a minimum of 50 square metres (including balconies and car space). Further conditions apply refer to QBE LMI. Vacant land (zoned residential with all services connected) is acceptable for one block of land up to 1,500 square metres. 4

7 FASTLend Unacceptable Security Properties Policy QBE LMI Insurer Requirements Rural or similar zoned properties (including broad acre land holdings). Commercial zoned properties. Properties that have not been provided with town services. Ownerbuilder construction projects. Properties with more than one existing residence on title (except for construction). Mobile and kit homes (i.e. transportable properties). Properties with construction of more than 3 residences on title or construction of up to 3 residences on title where there is no evidence to subdivide or strata title. Properties adversely affected by heritage, environmental or planning issues. Properties evidenced by stratum/company share titles. Properties that are unique or unusual in character or construction or with overcapitalised improvements. Properties affected by hightension power lines, frequent flooding (or flood zoning), traffic abnormalities and industrial sites. Properties in poor condition. Combination shop/residence. Inner city high rise conversions. Display homes. Properties (with a completed dwelling) that are in excess of 10 hectares (25 acres). Vacant land that is in excess of 2.2 hectares (5 acres) and/or loan facility is greater than 600,000. Vacant land that is in excess of 1,500 square metres. High density securities where the LVR is greater than 80% and/or where the security size is less than 50 square metres (including balconies and car space). Unit in strata hotel/motel. Unit in a retirement complex. Motel/hotel conversions. Unacceptable Security Properties FASTLend Maximum Loan Amount Policy Security Location LVR Range Vacant Land All other lending Metro <=80% 600,000 2,000,000 > 80% 400,000 1,000,000 Regional <=80% 400,000 1,000,000 > 80% LMI insurer dependent 750,000 Country <=80% 200, ,000 > 80% LMI insurer dependent 500,000 Maximum Loan Amounts FASTLend Applicants Policy QBE LMI Insurer Requirements Third party mortgages are specifically excluded. Exceptions may apply in the instance of married couples or current defacto relationships. Where beneficial owner is not listed as a director, the loan is not to proceed. Individuals PAYG employed in their current position for at least three months. Are not currently employed under a probationary period. Have been selfemployed for at least the past two years. Are permanent residents/australian citizens and reside in Australia. Corporate entities Are currently trading as a registered Australian company and subject to company taxation. Are a trustee company acting on behalf of a family trust. Are a partnership entity. Guarantees from company directors or proprietors are required. At least one Director/Trustee/Partner must be an Australian citizen/permanent resident and reside in Australia. PAYG minimum employment requirements: Completion of 6 months in current position, OR at least 12 months continuous employment within same industry. Completion of probationary period. Selfemployment requirement: Provision of last two years tax returns, financial statements and tax assessment notices. Applicants 5

8 Serviceability Requirements FASTLend Serviceability Requirements Policy QBE LMI Insurer Requirements You must use the FASTLend Serviceability Calculator to undertake a preliminary assessment of the borrower s loan serviceability. All loans are qualified using repayment based on: (i) For Principal and Interest (P&I) loans: the Qualifying Rate on a P&I basis over the contracted loan term; (ii) For Interest Only (IO) loans: the Qualifying Rate on a P&I basis over the P&I term at the expiry of the IO term (i.e. contracted loan term less any IO term) The qualifying rate used must be the greater of: (i) 2.25% p.a. above the effective borrower rate; or (ii) the serviceability floor assessment rate of 7.40% p.a. For all existing home lending facilities (excluding debt to be paid out or refinanced), the repayment must be recorded and a loading applied as follows: For Principal and Interest facilities, the repayment amount entered must be the current contracted monthly loan repayment amount or verified customer advised repayment amount. A repayment loading of 1.30 will be applied to this repayment amount. For Interest Only or Line of Credit facilities, the monthly repayment amount is calculated by multiplying the current effective borrower rate and the current loan limit, divided by 12. A repayment loading of 1.30 will be applied to this repayment amount. Acceptable loans must have a positive FASTLend Serviceability Calculator result. Advantedge Financial Services may consider including deductible interest when calculating servicing capacity for a loan application. Where this is applied, the following must be considered: Amount of deductible interest to be used for servicing calculation must not exceed total taxable income from all sources. LMI insurer policies must be complied with where the loan application requires LMI cover. Acceptable loans must have a positive FASTLend Serviceability Calculator result. Type of income Income Verification Required Minimum Employment Period FASTLend QBE LMI Acceptable Income and Documentation Required Salary (PAYG) Full Time and Part Time (i) One computer generated payslip with YTD showing at least 2 pay cycles*. The payslip should contain at least: Applicant's name; Employer's name and ABN; Pay period; Gross and net income for pay periods and break up of income (base, overtime, leave loading); Superannuation details; Year to date (YTD) income details; OR if No Year to date (YTD) income details; (ii) Two of the three most recent* computer generated payslips. The payslip should contain at least: Applicant's name; Employer's name and ABN; Pay period; Gross and net income for pay periods and break up of income (base, overtime, leave loading); Superannuation details; OR (iii) Three months bank statements from a financial institution, no older than 60 days as at the application submission date, showing two salary credits, with the name of the employer evident. Transaction listings are not acceptable. Documents that do not include a barcode will require additional verification. * Most recent must not be more than one month old as at application submission date. Note: If salary deposit amounts are inconsistent and variance is <20% use lower figure, if>20% obtain payslip. Note: Genworth insured loans are limited to option (ii) or (iii) for salary PAYG income verification. For Full Time: If current employment is less than 6 months, applicant must not be on probation and must have held previous employment (in same field) for at least 12 months. For Part Time; Must be 12 months in current employment. Primary earner must have 6 months in current position or 12 months continuous employment within the same industry. 6

9 Type of income Income Verification Required Minimum Employment Period FASTLend QBE LMI Salary (PAYG) Full Time and Part Time (cont.) Return to Work Income: Where income is being used to service a loan from a borrower that is returning to work within 60 days of the application submission date, a letter from the borrower's employer must be obtained. This letter must contain the following details: recommencement date, income details, and employment status (i.e. Full Time, PartTime). This letter must be on the employer's letterhead and signed by an authorised signatory. Examples of types of extended leave taken can include (but are not limited to): Career Break/Long Service Leave/Parental Leave/Sabbatical. Parental Leave Income: Where customer is about to commence Parental Leave or is currently on Parental Leave (and does not meet Return to Work Income requirements) PAYG Base Income (excluding Overtime, Bonus, Commissions, etc.) can be used where the following criteria are met: Permanent employee (ie: not a casual) Has worked for employer for a minimum of 12 months; and Will have primary responsibility for caring for the child during the parental leave period. Requirements: Ensure Responsible Lending (NCCP) requirements are met by noting on application that the customer has Foreseeable Changes. Input PAYG income values based on the customer advised intended return to work employment details after parental leave period expires (eg: Full Time, Part Time, Hours, etc) Example: Customer is presently Full Time and intends to return to employment as Part Time (3 days a week). Would verify 60% of the current Base PAYG income value. Record how customer is going to meet debt servicing commitments over the period of parental leave, in addition to the loan contract term. i. Applicable personal, partnership, trust and/or company taxation returns for the last two financial years and the two latest Australian Tax Office Assessment Notices (as required). or ii. The last two financial years Accountant Prepared (Reviewed or Compiled) or Audited balance sheet and profit and loss statements Note: Where applicant(s) income is unclear from company documentation provided, 2 years of personal tax returns and ATO notices for the applicant(s) must be supplied. The income figure to be used (provided from last two financial years) for serviceability assessment must be calculated using the following methodology: 1. Where the income in the latest financial year has increased by less or equal to 20% compared to the previous year, the latest financial year's income amount is to be used for serviceability purposes. 2. Where income in the latest financial year has increased by more than 20% compared to the previous year, 120% of the previous year's (year 1) income amount is to be used for serviceability purposes. 3. Where income in the latest financial year has decreased compared to the previous year, the latest financial year income amount is to be used for serviceability purposes. 4. The following are deemed acceptable addbacks for self employed applicants: (i) Directors'/Partners' salaries (if not used separately in servicing calculations); (ii) Interest on any loan facility that is being refinanced as part of the application; (iii) Superannuation (where amount is greater than current Government requirements); (iv) nonrecurring expenses; (v) Business depreciation expenses can be added back as Net Income (untaxed). At the discretion of FASTLend, depreciation expense addback may be reduced or be deemed as unacceptable. FASTLend reserves the right to request further information on the depreciation expense such as requesting the provision of a depreciation schedule. Note: Loan applications with LVR greater than 80% must comply with QBE LMI policy: Letter from accountant certifying accounts may also be required. Self employed (Personal, Partnership, Company, Trust) 2 years trading in the current business with full financial statements. 2 years trading in the current business. Acceptable Income and Documentation Required (Cont.) Depreciation expense addback amount must not exceed 30% of assessable income 7

10 Type of income Income Verification Required Minimum Employment Period FASTLend Same as PAYG QBE LMI Employee Allowances Letter from employer stating conditions of the allowance. Including (but not limited to) shift allowances which are fixed/recurring, verifiable and not discretionary may be included as PAYG income. Must be confirmed as an industry standard. Must be confirmed as being: within the nature of the applicant s employment, regular, and has been received for a minimum of the most recent six months. The calculator will shade aftertax Overtime by 20% Income verification must be supplemented by: Payslip YTD figure representative of minimum of six months, or Where Payslip YTD reports a figure less than 6 months, obtain Payslip/s, PAYG Payment Summary, Personal Tax Return for the last financial year or a signed contract of employment or letter of offer that specifies regular overtime as a condition of employment Centrelink statement of benefits. Acceptable if considered: Regular and of consistent amounts, Has been received for a minimum of the most recent six months. Note: Unemployment benefits, carer's benefits, study benefits and sickness will not be considered. Acceptable providing: shares are listed on the ASX or Managed Fund is managed from Australia (eg. MLC), and investments are current at the time of application and are included in the application form. The calculator will shade aftertax Investment Income by 20%. Verification documentation may include any one of the below: A Shareholding certificate or current dividend statement or notice Managed Fund current statement or notice A Letter from a financial planner with our Bank A Bank statement or internet banking transaction listing that identifies at least two direct credits as investment income. Share Registry advice Term Deposit certificate The most recent tax return (must be no more than two years old and either prepared by a tax agent or containing evidence of lodgement to ATO) Verification documents (excluding bank statements and transaction listings) must confirm the name of the publicly listed company in which the investment is held, the specific name and type of investment held, the name of at least one of the customers. Where any of the investment is being redeemed to use as equity in this transaction then income is not deemed acceptable. Must be consistent and fully supported by previous 2 financial year s tax returns and trading statements. Refer to selfemployed income details for further clarification. Must be confirmed as being: within the nature of the applicant s employment, regular, and has been received for a minimum of the most recent six months. The calculator will shade aftertax Commission by 20%; Minimum of 6 months commission receipts and Must be supplemented by: Payslip YTD figure representative of minimum of six months, or Where Payslip YTD reports a figure less than 6 months, obtain Payslip/s, PAYG Payment Summary, Personal Tax Return for the last financial year or a signed contract of employment or letter of offer that specifies regular commission as a condition of employment. Overtime Same as PAYG Acceptable Income and Documentation Required (cont.) Government Benefits Investment income (Interest and Dividends) Must be permanent and ongoing for next five years. Business income Commissions Income Same as PAYG 2 years in current employment. 8

11 Type of income Bonus Payments Company car Housing allowance (Provided by employer or Government departments) Superannuation Income (Drawing on income NOT on capital) Contract employment Casual employment Income Verification Required Acceptable providing received for the most recent two financial years, with the lesser of: average bonus payment received over the most recent two financial years, or the most recent financial year bonus. The calculator will shade aftertax Employment Bonus Income by 20% Must be received for the most recent two financial years. Must be supplemented by: Payslips, PAYG Payment Summary, or Reward Statements issued by the employer with details of all bonus payments received or Personal Tax Return over the two most recent financial years, or Signed letter from the employer detailing the bonus payment amounts paid over the most recent two financial years. Car allowance Where allowance is fixed/recurring, verifiable and not discretionary it may be included in PAYG income. The allowance should be verified using applicant payslips, or where this is not possible, via a letter from employer stating allowance is permanent. Packaged (optional) Treat packaged cost as gross income. Packaging should be verified using applicant payslips, or where this is not possible, via a letter from employer stating stating packaging. Fully maintained No income will be accepted which is associated with a fully maintained company car. Letter from employer confirming allowance or benefit statements from Government. Letter from employer detailing salary packaging. Statement of superannuation benefit. Acceptable providing: from Guaranteed Superannuation Income Scheme, Guaranteed Annuity Income Scheme, Defined Benefit Income Scheme, or Defined Death Benefits Scheme, and the customer is presently drawing income from their superannuation fund scheme at the time of application. Payslip, not more than one month old as at the application submission date, reporting greater than 6 months YTD figure; Where Payslip YTD reports a figure less than 6 months, Payslips, PAYG Payment Summary or Personal Tax Return for the last financial year. Six months bank statements from a financial institution, no older than 60 days as at the application submission date, showing regular salary credits, with the name of the employer evident. Transaction listings are not acceptable. Documents that don t include a barcode will require additional verification. Payslips, PAYG Payment Summary or Personal Tax Return for the last financial year is required to support income verification. Payslip, not more than one month old as at the application submission date, reporting greater than 6 months YTD figure; Where Payslip YTD reports a figure less than 6 months, Payslips, PAYG Payment Summary or Personal Tax Return for the last financial year. Six months bank statements from a financial institution, no older than 60 days as at the application submission date, showing regular salary credits, with the name of the employer evident. Transaction listings are not acceptable. Documents that don t include a barcode will require additional verification. Payslips, PAYG Payment Summary or Personal Tax Return for the last financial year is required to support income verification. Minimum Employment Period FASTLend 2 years in current employment. 12 months in current employment or Employment in similar role or related industry for minimum of 12 months. 12 months continuous employment with consistent income levels or Employment in similar role or related industry for minimum of 12 months. QBE LMI 2 years in current employment. 6 months in current employment or 12 months continuous employment within the same industry. 12 months continuous employment. Acceptable Income and Documentation Required (cont.) 9

12 Acceptable Income and Documentation Required (cont.) Type of income Income Verification Required Minimum Employment Period FASTLend QBE LMI Second job Same as PAYG. 2 years continuous employment. 12 months continuous employment. Probationary employment period Not acceptable. N/A N/A Child support or maintenance The Maintenance Agreement/Child Support Assessment is registered with the Child Support Agency, A minimum of six continuous months of payments have been received and can be verified via the customer's bank account statements not older than two months, Use lower of amount stated in Maintenance Agreement/Child Support Assessment or monthly average received for minimum of the most recent six months; Is considered permanent for the next 5 years, and Must not represent the predominant income source of the application. Unemployment benefits Not acceptable. N/A N/A Workcover Not acceptable. N/A N/A Income from boarders, tenants, dependants residing in same property Not acceptable unless income is declared on borrower s taxation return. Seasonal work Not acceptable. N/A N/A N/A N/A Guarantees Genuine Equity FASTLend Genuine Equity Policy QBE LMI Insurer Requirements FASTLend Guarantees Policy Where equity contribution is a gift, an inheritance or FHOG this must be disclosed in all cases. Gift recipients may be required to provide additional information or evidence of funds. Sale of shares is acceptable. Sale of motorvehicle or other assets is not acceptable. Borrowed funds are not an acceptable source of genuine equity. Loans >85% LVR Genuine equity of at least 5% of purchase price must be evidenced for a minimum of six months and can comprise of the following: Bank savings; Term deposits; Shares; Existing equity in real estate. First home buyer loans irrespective of LVR, at least 5% of purchase price must be provided from genuine savings. For all other loans where the LVR is >85%, at least 5% of purchase price must be provided from genuine savings. FASTLend reserves its right to request a guarantee at any time. Where director(s) is/are borrowing funds for private use a company guarantee is not required. Where funds are being raised on behalf of the company then a supporting company guarantee is required. Where the borrower is trustee of a unit trust, each unit holder will also be required to provide a guarantee. Treatment of Rental Income FASTLend Treatment of Rental Income Policy FASTLend will take into account rental income in determining loan serviceability, subject to the provision of the following documentation: New rental income: One of the following: Copy of current executed lease agreement; Market appraisal from registered real estate agent; Market appraisal contained in a sworn valuation. Existing rental income: One of the following: Copy of current formal residential tenancy agreement (can include a Contract of Sale Rental Schedule); Copy of rental receipt issued by the real estate agent that is not more than 60 days old showing 4 weeks of rental payments; Bank Statements or transaction listings no older than 60 days showing at least 2 direct credits; Rental property schedule contained in a current tax return^ (must be no more than two years old and either prepared by tax agent or containing evidence of lodgement to ATO). ^ Use of tax returns retained especially for complex transactions from astute investors. Allows assessor to evidence that applicant is receiving rental income over a longer period of time Board or rental derived from borrower's own home is not used in assessment, unless it is declared on the borrower's taxation return or is evidenced by a formal residential tenancy agreement. 10

13 FASTLend Purchase of Security Property Policy A copy of the contract of sale (executed by all parties) must be provided. Evidence of applicants equity contribution is required. Purchase of Security Property FASTLend Refinance of Existing Debt QBE LMI Insurer Requirements Satisfactory loan repayment history is required. There must be no evidence of: default/penalty interest arrears/missed repayments/dishonours legal costs balances in excess of agreed limit there has not been more than two late payments, overdue fees, or other penalty charges evident across all facilities. Where a loan is refinanced, you must ensure that there is a benefit to the consumer in doing so see ASIC's RG 209 Responsible Lending Guide for further details. For refinanced loans (excluding credit cards), obtain consecutive loan statements, and/or transaction listings, showing six months of loan conduct, no older than 60 days from the application submission date. (Note: Documents can be a combination of the above and must show a minimum of customer/s name, loan account number and lender details). For refinanced credit cards (excluding loans): Obtaining three consecutive months of statements for the card being refinanced. The latest statement must not be more than three months old at the application submission date. Only pages within the statement showing the customer's name, card limit and card balance are required. Documentary evidence that council rates, water rates and body corporate levies are paid to date at time of approval is required. Must provide a copy of most recent annual or quarterly notice together with a receipt to verify payment. Refinance of Security Property QBE LMI Insurer Requirements Documentary evidence that council rates, water rates and body corporate levies are paid to date at time of approval is required. Must provide a copy of most recent annual or quarterly notice together with a receipt to verify payment. Loans Secured Against Clear Title FASTLend Vacant Land Policy Vacant land loans are available for Code and noncode regulated loans to purchase land for either owner occupied or investment purposes. A vacant land loading will apply from land settlement until a property is complete and all progress payments have been made. Vacant land funding is only available on the variable rate Performance Plus product. The maximum LVR is 90% of the land value of the land. The valuation will be for the vacant land only on an 'as is' basis. The maximum loan amount for vacant land is as per the Maximum Loan Amount policy. FASTLend offers no guarantee that it will approve further requests for additional funds in the future. FASTLend requires full credit information to be provided for any requests for additional funding. Where existing loans/securities change to vacant land by either substitution of securities or subdivision of land, vacant land/construction conditions apply. Where the loan is not redocumented, the Borrower's Guide to Vacant Land and/or Construction Funding must be issued to the borrowers. No redraw of additional payments or available credit permitted via direct card. FHOG proceeds are not available to fund vacant land. FHOG will only be released during construction. For approved land and construction loans: Ability to advance an amount equal to approved government grant (e.g. FHOG) for use at vacant land settlement. Amount will be advanced from the approved construction loan and is only to be used at land settlement. At first progress payment, approved government grant will be credited to construction loan to ensure adequate construction loan funds are held to meet construction costs. To apply, FASTLend must process the government grant application on behalf of the applicant(s), application is noted for this option to apply and all government approvals must be held prior to land settlement. Please refer to "Fact sheet & FAQs Advancement of amounts equivalent to FHB Government Grants" for further details. For any request for cashout proceeds secured by vacant land refer to FASTLend's Cash Out Policy in this guide. For further details refer to the FASTLend Vacant Land and Construction Loan Fact Sheet. Vacant Land Loans 11

14 Construction Loans FASTLend Construction Loan Policy Construction loans are available for Code and noncode regulated loans to purchase land, build a residential property or renovate a residence for either owner occupied or investment purposes. A Construction Drawdown fee applies, please refer to the Fees and Charges brochure. Construction funding is only available on the variable rate Performance Plus product. Residential construction must be completed within 12 months of the first progress payment. No redraw of additional payments or available credit permitted via direct card during construction period. The documents required to fulfil construction conditions are: Before loan approval: Executed Fixed Price Building Contract Prior to the first progress payment: A copy of the stamped Council Approved Plans and specifications; A copy of the Builders All Risk Insurance Policy, which covers the builder for fire and storm damage whilst the property is under construction; Note: This policy can be provided on Insurance broker's letterhead provided that the following information is contained on the document: correct names of borrowers, property address, amount of cover provided, interested party/mortgagee, start and expiry dates of policy, stated policy number and insurer's underwriting policy. Certificate must be provided on broker's letterhead with appropriate contact details and ABN. Handwritten certificates are unacceptable. FASTLend reserves the right to request the Builder's All Risk Insurance on the Insurance underwriter letterhead for any cause that may arise. Home Owner s Warranty Certificate. At final payment: Copy of Occupancy Certificate (new homes only). Not applicable for SA or WA. Copy of Building Insurance Policy, Acceptable valuation confirming all works have been completed as per plans and specifications. For further details refer to the FASTLend Vacant Land and Construction Loan Fact Sheet. Procedure and Documentation FASTLend Procedure and Documentation Policy Documents to be completed by applicant(s): Documents to be provided with all applications: Application form containing: Business Purpose Declaration (nonncc regulated only) 100 point identification form Privacy Notice and Consent form (in FASTLend s approved format). Copy of Preliminary Assessment. Completed Application form. Income evidence for all applicants to be verified by FASTLend. Existing home loans not being refinanced evidence of current repayment amount, limit and effective rate as applicable. Refinances Satisfactory conduct of any loan being refinanced. Refinances Executed discharge authority from other lender. Purchases Copy of executed Contract of Sale. Purchases Evidence of equity to complete the purchase. Copy of FASTLend Serviceability Calculator worksheet. A copy of the Fixed Price Building Contract, executed by all parties; For lending involving trusts: Copy of the original executed Trust Deed(s) (and any amendments) with completed declaration question on Broker Summary and Declaration section of loan application form. A copy of plan of subdivision where up to 3 residences are to be constructed on title. 12

15 FASTLend Security Location Guide Effective from Monday, 28 September 2015 Metro Regional Country Inner City* Restricted Postcodes Group B^ Group A ~ NSW VIC QLD SA TAS NT WA ACT FASTLend Security Location Guide This location guide is to be used to identify applicable locationbased lending restrictions. Where LMI is required, applicable LMI insurer location guidelines must be followed. *Maximum LVR 80% for any loan purpose. For applications where an innercity apartment security property is not owneroccupied, a maximum LVR of 70% will apply under the No LMI parameters. Applications with an LVR > 70% will require Lenders Mortgage Insurance cover. ~ Restricted Postcodes Group A: Max LVR 70% for any loan purpose. ^ Restricted Postcodes Group B: Max LVR 80% for any loan purpose. All applications are subject to FASTLend s underwriting guidelines. 13

16 FASTLend Serviceability Calculator Instructions FASTLend Serviceability Calculator Serviceability tests Entering data into the worksheet Data items Loan Details Applicant name Security value Start date Loan applicant(s) household composition No. of Adult Couples and/or Single Adults and No. of Children Applicant(s) specified living expenses (per annum) Commitments This Loan Loan Number Loan Amount Effective Rate Qualifying rate Interest Only Period Commitments Other From this loan Other mortgages Rent Hire Pur./Lease Personal loans Credit cards Other The FASTLend Serviceability Calculator has been designed to enable a preliminary assessment to be made as to a borrower s ability to service a FASTLend loan based on the requirements of FASTLend. The following information is provided to assist users with the operation of the program. BEFORE you use the program please make sure that: your computer is set to English Australian, not English American you enable macros to ensure correct operation of the worksheet. The calculator computes loan serviceability calculations based on Cash Flow Test. Enter data only in the white boxes, and only use whole numbers for financial items. Shaded boxes do not require entries and may contain formulae that cannot be overridden. The items to be entered in the worksheet are as follows: Enter the borrower name exactly as shown on loan application. Enter the amount of the total value of all proposed securities, based on the anticipated or actual valuations. The start date will automatically be entered and will be the date that you are completing the calculator. Select from the drop down menu the number of Adult Couples and/or Single Adults applicable to the Household and then enter the number of dependants for each Adult Couple and/or Single Adults. Entry of this data is mandatory. Enter total annual expenses after loan. Includes food housekeeping, utilities, transport, education (excluding HECS), medical/health, entertainment, insurance, child maintenance and other but excluding rent, personal loan and credit card payments. Entry of this data is mandatory. Enter loan number for this loan. Enter loan amount for each loan split. The calculator will automatically calculate the repayment amount at the Qualifying Rate and the Effective Rate. Enter the borrower interest rate. For split facilities ALWAYS enter the highest borrower rate. All loans are qualified using repayment based on: For Principal and interest loans: The Qualifying Rate on a P&I basis over the contracted loan term; For Interest Only loans: The Qualifying Rate on a P&I basis over the P&I term at the expiry of the IO term (i.e. contracted loan term less any IO term); This field will automatically update once the effective rate has been entered. The qualifying rate used must be the greater of: (i) 2.25% p.a. above the effective borrower rate; or (ii) the serviceability floor assessment rate of 7.40% p.a. Advantedge assesses a borrower s future ability to service a proposed debt at a higher qualifying interest rate that takes into account possible future interest rate increases. Enter interest only period if the loan is interest only. The calculator automatically calculates the amount of annual repayments on all loans shown at the qualifying interest rate. Enter the commitment amount(s) on the Other Mortgages worksheet for repayments on all other home loans not being refinanced. Refer to Other Mortgages. Enter any annual rental paid by borrowers who do not own their residence, and who will continue to pay rent after settlement of the proposed loan. Enter the annual instalments on any hire purchase or leasing arrangements. Enter the annual instalments on any personal loans. Enter an amount of 30% of the limit of any credit cards. Enter the amount of any commitments not shown in any other boxes. 14

17 Data items Income Applicant name Gross annual income Gross Other PAYG Income Rental income Investment Income Allowances Deductible interest Data items Company Income Company income description Amount (of Company income) Rental Income Investment Income Deductible Interest Amount (of addback items) Business tax Enter the names of each income earner in each box there are four boxes provided. Do not enter business names here these should be entered under the company income section. Enter the same amounts as they appear on the borrower s current personal tax returns, PAYG Payment Summary, payslips, etc. Enter Overtime, Bonuses and Commissions. (Shaded 20% net of tax) Enter the actual or estimated total gross rental income received from investment properties. Multiple boxes allow for the allocation of rental to each borrower/ guarantor. (Shaded 20% net of tax) Enter Dividends, eligible superannuation and interest.(shaded 20% net of tax) Enter Eligible Child Support and Government Allowances only (Not taxed or shaded). Enter the amount of interest payable by the borrower in respect of the loan that should be taxdeductible, together with any rental deductions and any other allowable deductions that should reduce taxable income (the calculator automatically recognises the taxation effects of negative gearing in determining aftertax income). The deductible component is based on the actual interest rate to be paid by the borrower. Multiple boxes allow for allocation of deductions amongst various borrowers/guarantors. Deductible interest may be included when calculating servicing capacity. Note: Amount of deductible interest to be used for servicing calculation must not exceed taxable income. In addition, where the application requires LMI cover, LMI insurer policies must be complied with. The company income section has been included to take into account corporate borrowers or guarantors whose taxable income is not assessed at personal rates of tax. The calculator automatically assumes that any net profit will be assessed at the prevailing corporate tax rate. Enter the name of the entity from which income has been included. Typically only one box will be used, however provision has been made for up to four entities. Enter the amount of net profit of each business exactly as it appears on the borrower s current financial statements. Enter amount of total gross Rental Income. (Shaded 20% gross of tax). Enter amount of Dividends, eligible superannuation and interest. (Shaded 20% net of tax). Enter amount of Tax Deductible Interest from investments. Enter the amount of any noncash and other addback items including depreciation expense as per current financial statements. The calculator automatically assumes that any business tax will be calculated at the prevailing corporate tax rate. If you consider that any other basis of calculation is applicable, enter the revised amount of tax in the business tax box, and state by way of a separate note the reasons for the change. Summary calculations Debt Servicing Net cash after addbacks This means: Net cash after tax + company income after addbacks. Living expenses Living expenses are automatically calculated using the data shown in the living expenses table. These amounts are considered to be the minimum living allowances for adults and dependent children for the purposes of the assessment. Net available This represents the sum of net cash after addbacks less living expenses. Total outgoing This represents the total of all debt commitments. Surplus cash available This represents the net available cash less total outgoings. Cash Flow Test including deductible interest This represents: Net available cash Total outgoings (Net available cash will be higher when deductible interest included as tax applicable will be lower only if PAYG income entered, does not affect business tax). Cash Flow Test without deductible interest This represents: Net available cash Total outgoings (Net available cash will be lower if deductible interest is not included as tax applicable will be higher only if PAYG income entered, does not affect business tax) FASTLend Serviceability Calculator Instructions (cont.) 15

18 Other Mortgages FASTLend Serviceability Calculator Instructions (cont.) Number of Loans Lender Loan Type Recording existing home loan commitments Borrower Rate Loan Limit Enter number of loans. Enter the Lender of each loan. Enter the repayment type of loan. Principal and Interest (P&I): enter the contracted monthly loan repayment amount Interest Only (IO) or Line of Credit (LoC): enter the borrower effective rate and the loan facility limit. IO and LoC only: Enter customer effective borrower rate. IO and LoC only: Enter loan facility limit. Monthly Repayment Amount For Principal and Interest (P&I), enter the contracted monthly loan repayment amount. Please note carefully part or all of the above commentary is subject to change at any time without prior or further notice. All loans are subject to approval by FASTLend and compliance with all of their Terms and Conditions. No responsibility is assumed by any of these companies or their employees for any loss or damage (whether caused by negligence or not) arising from the use of the information and advice contained herein, or from the use of any of the computer programs, software and applications to which this memorandum refers. Any conclusions arrived at as a result of the use of the programs to which this memorandum relates by any person will not constitute acceptance or approval of a loan by FASTLend. 16

19 IMPORTANT : PLEASE ENSURE YOU HAVE ENABLED MACROS FOR THIS CALCULATOR TO WORK SERVICEABILITY CALCULATOR v Loan Details SERVICEABILITY Applicant Name(s) CALCULATOR John and Jane Smith v Security Value 1,000,000 LVR 80.00% Loan Details Use custom Applicant fields when Name(s) simulating repayments Jane & Ben for a given Smith date range, otherwise select a predefined maturity Security date for normal Value serviceability calculation based on our available loan terms. 600,000 LVR 58.33% Start Effective Date Rate 3Dec2015 Custom 4.00% Start Date Qualifying 3Dec2015Rate 7.40% Maturity Date/Loan Term 25years Custom Maturity Date 3Dec2045 Use custom fields when simulating repayments for a given date range, otherwise select a predefined applicant(s) maturity household date composition for normal serviceability calculation based on our available loan terms. Loan 1. Please select from drop down menu the Use number predefined of Adult Couples and/or number of Single Adults. Use custom 2. Enter number of dependents (if applicable) 3. Enter the applicant(s) Start specified Dateliving expenses per 10Apr2015 annum. Custom Start Date Maturity Date/Loan Term 30years Custom Maturity Date Number of Adult Couples 1 Applicant(s) specified living expenses (per annum) Loan applicant(s) Adult Couple 1 household composition 1 Children 2 24, , Please select from drop down menu the number of Adult Couples and/or number of Single Adults. Number of Single Adults 2. Enter number of dependents (if applicable) Single Adult 1 Children 3. Enter the applicant(s) specified living expenses per annum. 24, , Specified Living Expenses = Total annual expenses after loan. Includes food housekeeping, utilities, transport, education (excluding HECS), medical/health, entertainment, insurance, child maintenance and other but excluding rent, personal loan and credit card payments. Commitments This Loan Commitments Other Number of Adult Couples 1 Specified living expenses (per annum) (and if combined with another loan application, enter total new lending as separate item) Adult Couple 1Loan Amount Effective 1 Rate Dependant Qualifying Rate ChildrenInterest Only Repayment 3 at Repayment at 30, , Loan Number Period Qualifying Rate Effective Rate Annual Amount 800, % 7.40% 4years 6, , From this Loan 75, Number of Single Adults 7.40% 7.40% Not Applicable Not Applicable Other Mortgages Rent 7.40% Not Applicable 30, Hire Pur./Lease 41, % Not Applicable Personal Loans 7.40% Not Applicable Credit Cards 7.40% Not Applicable Other Commitments This Loan Commitments Other 7.40% Not Applicable Total 75, % Not Applicable Total Loan Loan Number Commitments 800, Repayment 7.40% at Qualifying i Rate Not Applicable Repayment at Effective Rate 6, , Annual Amount 350, , , From this Loan 29, Income Use predefined Other Mortgages 25, Applicant Name Gross Annual Income Gross Other PAYG Rental Income Investment Income Allowances Deductible Interest Tax Applicable Rent Net Cash After Tax Income Jane Smith 100, , , Hire Pur./Lease 31, , , John Smith 50, , , Personal Loans 19, , Credit Cards 1, Total Loan Commitments 350, , , Other Total Commitments 60, Income Totals Applicant Name 150, , , Gross Annual Income Rental Income 20, Deductible Interest 5, Tax Applicable 50, , Net Cash After Tax Jane Smith 35, , , , , Company Ben Smith Income 95, , , Addbacks 23, , Description Gross Annual Income Rental Income Investment Income Deductible Interest Addback Description 64, ABC Pty. Ltd. 200, , , Depreciation Business Income After Addbacks Interest 159, Totals 130, , Superannuation 27, , Totals 200, , , Business Income Addbacks QBELMI: depreciation expense addback amount must not exceed 30% of assessable Description Amount Addback Description Amount income Business Tax 15, ABC Pty Ltd 50, Depreciation Business Income After Debt Servicing Net cash after addbacks 307, Interest Refinanced Addbacks 35, Less Living Expenses 44, Minimum living expense index utilised. Superannuation Net Available 263, Less Total Outgoing 75, Other Surplus Cash Available 188, Totals 50, Cash Flow Test (Pass) 3.51 Debt Servicing Net cash after addbacks 158, Less Living Expenses 41, Minimum living expense index utilised Net Available 116, Less Total Outgoing 60, Surplus Cash Available 56, Cash Flow Test (Pass) Use custom Specified Living Expenses = Total annual expenses after loan. Includes food housekeeping, utilities, transport, education (excluding HECS), medical/health, entertainment, insurance, child maintenance and other but excluding rent, personal loan and credit card payments Amount Other Please note: For all loans with a base LVR greater than 90% the cash flow test must be 1.25 Business Tax LVR is >80%, please ensure the depreciation expense addback amount complies with LMI policy: FASTLend Serviceability Calculator Example Please note: For all loans with a base LVR greater than 90% the cash flow test must be FASTLend Pty Ltd ABN

20 18 Notes