BROKER CREDIT ASSESSMENT TOOL (BROKER CAT) USER GUIDE

Transcription

1 BROKER CREDIT ASSESSMENT TOOL (BROKER CAT) USER GUIDE Version 1.2 February 2015

2 CONTENTS Contents...2 Overview Loan Payment Calculation Total applicants Applicant 1 and Costs Associated with the Loan Total Funds Required Other Potential Costs Assessment Result Printing and Clearing Information Page 2

3 OVERVIEW The Broker Credit Assessment Tool (Broker CAT) is used to calculate the applicant s ability to pay the proposed loan and must give a PASS or REFER result if the application is to be considered for approval. ** Please note that when first opening the Broker CAT you may have to click on the Options button and then choose Enable this content to allow macros to run.** Page 3

4 1. LOAN PAYMENT CALCULATION The first component of the Broker Cat is the Loan Payment Calculation section. Existing ME Mortgage - if the application is increasing or topping up an existing ME mortgage the existing debt (balance plus any redraw) must be captured in the Existing ME Mortgage field. Total Funds Required - as requested by the applicant. May include capitalised LMI (refer Section 3). Loan amount predetermined by the addition of Existing ME Mortgage and Total Funds required Loan Term - the maximum mortgage loan term is 30 years (360 months). On the Broker CAT the term must be entered as total months on the remaining term, or as requested by the applicant. Product Type the product that the applicant has chosen to best suit their objectives and requirements. Interest rate option choose the rate option as requested by the applicant. If the applicant has opted for partial or full loan fixed term (1, 3 or 5years) or Interest Only loan this loan will revert to variable rate and the loan term is up to 30 years. Interest rate predetermined by the choice of Product type and Interest rate Option. Other rates may be chosen via the Other rate box. Payment Frequency - this is the frequency the applicant has requested on the application form. This can be left as the default monthly if preferred. Payment Amount - the actual mortgage payment amount based on the information entered. Total Payment The minimum repayment as determined by the inputs above. Buttons: the clear button clears your entry. The split button is used to determine repayment amount on a split loan and the calculate button calculates the total payment amount. Page 4

5 2. TOTAL APPLICANTS Total Applicants - the total applicants as per the loan application. TAS or NT Loan - for loans above 80% LVR where the security property is located in TAS or NT. There are restrictions around maximum mortgage exposure to these states. No Savings Loan - check this box if the LVR is above 85% and the applicant is not contributing a minimum of 5% genuine savings. Page 5

6 3. APPLICANT 1 AND 2 Gross Income: Base Salary & Other Income - select the appropriate type of employment. The selection includes the choice of Full time, part time, Self Employed OR casual. This can be determined by evidencing the payslip and or other supporting paperwork submitted with the loan application. If the applicant has more than one PAYG position or additional income such as self employed income this can be entered in the Other Income field. The base income only should be entered in the Base salary field. Other items such as Overtime, Superannuation and Investment Income need to be entered into Other Income. Tax-Free Income - enter Rental Income, Maintenance and other income. The Broker CAT automatically calculates 80% of the rental figure entered. Other MEB Loan Contracts - this is all other ME Bank mortgages that the applicant is associated with. A calculation needs to be completed using the balance and any redraw, the remaining term and an interest rate calculated as the highest of: The current standard variable rate plus a buffer of 1.50% The floor rate of 7.4% The current fixed rate (if applicable) on the current ME Bank mortgage Page 6

7 Living Expenses: Customer Identified Living Expenses - it is a requirement of ME Bank that an application is completed disclosing the customers estimate of their monthly living expenses. Enter the applicants estimate in the Customer Identified Living Expenses box. The Broker CAT uses the higher of the Customer s Identified Living Expenses or the default living expenses amount. Please note that for married/defacto couples the Customer Identified Living Expenses need only be entered for Applicant 1. Liabilities Personal Loan - enter any personal loan commitment which is not being paid out within the loan application. All liabilities can be found in the liabilities section of the loan application form. Other commitments - notional rent, pre or post tax deduction or any other liability that does not fit within other options. Other Mortgages - this is any other Mortgage the applicant has declared held with other financial institutions which is not being paid out within the loan application. Credit Card Limit - Credit card limit of credit card held with any other financial institution which is not being paid out and finalised as part of the current application. A payment of 3% of the limit is calculated by the Broker CAT. ME Master Card limit - ME Master card limit must be entered in this filed. A payment of 3% of the limit is calculated by the Broker CAT. Does applicant X have a HECS debt? - If the applicant has a HECS debt declared on the application or on their payslip this box needs to be selected. Is applicant X married? - Marital status must be entered for all applicants. Dependants Applicant X - The number of dependants declared on the application form must be entered here. BUTTONS (on the bottom of the CAT): o o The MORE INFO is for internal ME use only. The Add button is used to add details if there are more than 2 applicants. Page 7

8 4. COSTS ASSOCIATED WITH THE LOAN TOTAL FUNDS REQUIRED The Broker CAT can also be used to give an estimate* on Lenders Mortgage Insurance (LMI) and other costs such as stamp duty and transfer costs. LMI can be capitalised into the loan to max 95% LVR (including capitalisation) or, for First Home Buyers, up to 97% LVR (including capitalisation) and by using the Total Funds Required box can be either manually input or automatically calculated: To manually input calculated LMI and other costs enter the following: Base Loan Amount Enter the amount (excluding any additional charges) that the applicant/s wish to borrow LMI Costs Enter the LMI costs Stamp Duty on LMI Enter the amount of stamp duty payable on the LMI premium Other MEB Balance on same security Enter the current balance (including any redraw) of any other ME Bank mortgage secured by the same property/ies as the current application. Total Security Value Enter the total amount of all securities associated with the current application. If LMI is to be capitalised click on the Capitalise LMI into Loan Payment Calculation box. The information is then transferred into the Total Funds Required box in the Loan Payment Calculation area of the Broker CAT. * Both LMI and Government charges are estimates only. The final amount paid is determined prior to settlement. Page 8

9 To automatically calculate LMI and other costs undertake the following: Calculate LMI On the Assessment Worksheet page click on this to transfer to the Mortgage Costs Calculator page of the Broker CAT Once in the Mortgage Costs Calculator page the following must be completed to calculate the LMI costs payable: First Home Owner Drop down box to choose Yes or No Owner Occupied Home - Drop down box to choose Yes or No Loan Purpose Drop down box to choose loan purpose. This area is critical in calculating the required amount of LMI as all other purposes apart from Purchase and Construction carry a 5% LMI premium buffer. Loan Amount Enter the base loan amount requested by the applicant/s Are new securities being added Drop down box. Always choose Yes Property Value For each individual security property fill in the value and state location Value of investment properties secured by this loan Enter the total of the value of all investment security properties being taken as security by the application. This area is critical as if more than 50% of the total security value is investment a 12.5% LMI premium buffer is charged. Page 9

10 Are any of the borrowers or guarantors self employed If any of the borrowers or guarantors are self employed select Yes, otherwise select No. An LMI premium buffer of 10% will be added to the premium if any of the borrowers or guarantors are self employed. Click on the Calculate box to calculate the LMI premium and stamp duties. If LMI is to be capitalised click on the Transfer to Assessment Worksheet box. This will automatically transfer the information from this page to the Total Funds Required box in the Assessment Worksheet. If LMI is not to be capitalised choose the Back to Assessment Worksheet box If LMI is to be capitalised, on the Assessment Worksheet page click on the Capitalise LMI into Loan Payment Calculation box. The information is then transferred into the Total Funds required box in the Loan Payment Calculation area of the Broker CAT. Page 10

11 5. OTHER POTENTIAL COSTS In the Other Potential Costs, the Stamp Duty on Mortgage and the Mortgage Registration Fee areas can be either filled in manually or automatically (via the Mortgage Costs Calculator page). The Stamp Duty on Transfer of Land and Registration of Transfer of Land must be entered manually. Please note that this area is optional and does not have to be completed. Page 11

12 6. ASSESSMENT RESULT The income and expenses data populates the Assessment Result section as other data is entered. This area shows the Net commitments, net expenses, Net Disposable Income (NDI) (that is income left after tax and commitments), Repayments with inbuilt to the Broker CAT 1.5% buffer on the current variable interest rate (or 7.4% floor rate whichever is higher). Maximum Amount is the total amount of new funds the clients has the ability to repay using all the details entered in the Broker CAT. Click the Assess button. The Assessment result gives a PASS, REFER or FAIL result. o o o Pass On the details entered into the Broker CAT, the applicant can service the proposed debt. Refer - On the details entered into the Broker CAT, the applicant can service the proposed debt, however, internally the application may have to be reviewed by a higher sign off authority or the Mortgage Insurer Fail - On the details entered into the Broker CAT, the applicant cannot service the proposed debt. PASS or REFER results may be submitted to ME. FAIL results should not be submitted, however, these may be discussed with an ME Bank BDM. Page 12

13 7. PRINTING AND CLEARING INFORMATION The above boxes appear on the left hand side of the Assessment Worksheet page of the Broker CAT. Clear All Clears all information from the Broker CAT and allows fresh information to be entered Print Assessment Click this button to print out the Broker CAT to include with loan submission to ME Bank. Save Choose to save the Broker CAT Please note that the Administrator box is for internal ME Bank use only. Credit Induction Module 4 Credit Principles and Policy 26/02/15 Version 1.2 Page 13