Key points:
From Tuesday 28 July 2020, Advantedge Credit Policy is being updated to change the way they help customers with their repayment at retirement strategy, so they can better understand the potential impact on their home loan repayments
For imminently retiring customers, you’ll need to collect documentation showing the customer’s retirement strategy
For non-imminently retiring customers, you’ll need to record their repayment strategy (see table below)
We’re committed to continue lending responsibly and helping customers achieve their home ownership goals. A key part of this commitment is helping customers nearing retirement to understand the potential impact on their home loan repayments. This is especially important after they retire.
From Tuesday 28 July 2020, our Credit Policy will require you to ask about and document how your customers plan to repay their home loan when they retire.
Changes in Loanapp
To guide you through this new process, the Compliance tab in Loanapp will be updated with a series of new fields for you to complete which will both:
determine the customer’s retirement status
calculate and determine which strategies the imminently retiring customer satisfies.
When you start your application in Loanapp, the information you enter in the Applicants, Loan Details and Financial Position tabs will automatically flow through to the Compliance tab. Here, you’ll be asked to enter in your customer’s planned retirement age and the system will automatically determine which of the following retirement status categories your customer falls into: imminently retiring, non-imminently retiring, or not applicable.
The retirement status will determine the level of enquiry, supporting documents and verification required to satisfy the Credit Policy and the Compliance tab will display a set of questions you’ll need to answer. It will also show the acceptable repayment strategies for each customer.
(1) This test will be considered ‘passed’ where an individual applicant fails, but at an aggregated household level spouse/de-facto partner who are joint applicants have sufficient assets to ensure the test is passed. To do this the broker will need to lodge this request via the exception section in the lodgement system. This exception section is available once all three tests have been failed and is located within the downsize test in the lodgement systems.
Pipeline treatment
For guidance on applications already in your pipeline, please note the following:
For applications submitted before Tuesday 28 July, the existing Credit Policy applies until COB (AEDT) 31 October 2020 to achieve unconditional approval.
For loan applications and variations submitted from Tuesday 28 July, the new Credit Policy will apply.
For applications that have received a Conditional Approval or Approval in Principle (AIP) the existing Credit Policy criteria can be applied for up to 90 days from the most recent Conditional Approval or AIP decision if there has been no deterioration in the lending position. If the application requires re-assessment and falls out of the 90 days, the new Credit Policy will apply.
If you have any further questions please contact your Advantedge Business Development Manager.