requirements and objectives summary – broker...wbc0245 bsa stg bom 0618 page 1 of 10 requirements...

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Requirements and Objectives Summary – Broker

Date of Conversation DD/MM/YYYY

What is the predominant purpose of this loan?

Non-Business Business

A consumer loan is not available for a predominant business purpose.

APPLICANT DETAILS

Applicant 1 Date of Birth

DD/MM/YYYY

Applicant 2 Date of Birth

DD/MM/YYYY

PRODUCT and LOAN PURPOSE DETAILS

Select Product

Home Loan Portfolio Loan

If Home Loan, select the reason why the applicant is applying for this loan?

Buy Build Refinance Home renovations Personal use Invest Other, please provide details:

If Portfolio Loan, select the reason why the applicant is applying for this loan?

Buy Build Refinance Home renovations Personal Use Invest in non-residential asset

Travel and Holidays Other, please provide details:

RELOCATION LOAN Complete this section if Home Loan

Relocation Loan? Yes No

Interest on Relocation Loan to be capitalised? Yes No

If Interest on Relocation Loan is to be capitalised, acknowledge the following has been completed

I have discussed that when the interest payments are capitalised, the applicant will pay interest on the capitalised interest. Each applicant appears to understand and wants to proceed.


LINE OF CREDIT ENQUIRIES Complete this section if Portfolio Loan

Why has the applicant chosen a line of credit with interest only repayments rather than a loan where they are required to pay off the principal over time?

Flexibility of drawdown Flexibility of revolving line of credit Assists with investment purchases and tax planning

Ongoing need for funds – planning to make a few purchases over a period of time Other, please provide details:

What is the applicant’s plan for paying off the line of credit?

Savings from income Sale of assets Recurring income from rental property

Income from other investments Other, please provide details:

If the applicant’s line of credit is reduced or cancelled, how will they repay the amount owing?

Sale of Assets

Please provide details of asset/s to be sold:

Other, please provide details:

I have discussed the higher interest rates applicable to a line of credit as compared to a standard loan. Each applicant appears to understand and wants to proceed.

I have discussed that not paying off principal will result in more interest being paid over the loan term. Each applicant appears to understand and wants to proceed.

I have discussed with the applicant that line of credit loans require a high level of discipline on behalf of the applicant in order to pay off the loan principal. Each applicant understands and wants to proceed.


MIXED PURPOSE ENQUIRIES

A “mixed purpose loan” is one partly for personal, domestic or household purposes (where interest paid will usually not be tax deductible) and partly for business or investment purposes (where interest paid will often be tax deductible). A loan can be a “mixed purpose loan” from the time of establishment, but will more typically occur where either:

• the initial loan was for personal, domestic or household purposes and the applicant requests a credit limit increase for business or investment purposes

• the initial loan was for business or investment purposes and the applicant requests a credit limit increase for personal, domestic or household purposes.

Mixed Purpose Loan? Yes No

If Mixed Purpose Loan, complete the following

Would the applicant prefer separate loans (possibly secured over the same property), one for each purpose?

Yes No, please answer the question below

Given the possible complications in claiming tax deductions, what are the applicant’s reasons for wanting a mixed purpose loan?

Cost saving, please provide details:

Easier to manage Advised by tax adviser Other, please provide details:

I have discussed with the applicant that there may be complications in claiming a tax deduction in connection with a mixed purpose loan and whether the applicant has sought tax advice regarding the structure of their loan(s). Each applicant appears to understand and wants to proceed.

INTEREST RATE TYPE ENQUIRIES

Interest Rate Type? Fixed Interest Rate Variable Interest Rate Both (Fixed and Variable Rates)

If Fixed Interest Rate or Both (Fixed and Variable Rates) is selected, complete the following

What is important to the applicant about a fixed rate?

Certainty of repayments Make budgeting easier Lock in the applicable interest rate


I have discussed that restrictions to additional repayments apply when the interest rate is fixed. Each applicant appears to understand and wants to proceed.

I have discussed the possibility of expensive break costs if the additional repayments exceed the threshold, the loan is repaid in full or switched to another product or loan type within the fixed rate period. Each applicant appears to understand and wants to proceed.


REPAYMENT TYPE ENQUIRIES Complete this section if Home Loan

Repayment Type? Principal and Interest Interest Only Interest in Advance

If Interest Only and/or Interest in Advance is selected, complete the following.

Why has the applicant chosen interest only repayments?

Smaller initial repayments to boost cash on hand Flexibility to manage cash flow

Smaller initial repayments to maximise tax deductions (This loan is for investment purposes)

Priority is paying off non-deductible debts (This loan is for investment purposes)

Smaller initial repayments to free up cash flow for other personal purposes


I have discussed the higher interest rates applicable to interest only loans (where applicable). Each applicant appears to understand and wants to proceed.

I have discussed not paying off principal will result in more interest being paid over the loan term. Each applicant appears to understand and wants to proceed.

I have discussed that after the end of the interest only repayments period principal and interest repayments will be required and that these will be higher than they would have been if the loan had principal and interest repayments throughout its term. Each applicant appears to understand and wants to proceed.

I have discussed that the amount of equity that can be built-up in the home will be less with an interest only home loan than with a principal and interest home loan. Each applicant appears to understand and wants to proceed.

If Interest in Advance is selected, complete the following

Why has the applicant chosen to pay interest in advance?

For tax advantages Discounts on interest rate Helps maximise cash flow and budgeting


I have discussed that interest in advance is only available where the loan is on a fixed rate and the purpose is Investment. Each applicant appears to understand and wants to proceed.

I have discussed that an upfront payment equivalent to the chosen interest in advance period’s worth of interest only repayments, is required to participate in this option. Each applicant appears to understand and wants to proceed.


LMI ENQUIRIES

Is LMI Required? Yes No

If LMI is required, acknowledge the following has been completed

I have discussed that lender’s mortgage insurance protects the lender if the applicant is unable to meet their loan obligations but this does not relieve the applicant of their obligation to repay the loan. Each applicant appears to understand and wants to proceed.

I have discussed the extent to which lender’s mortgage insurance premiums are refundable where the loan is repaid early. Each applicant appears to understand and wants to proceed.

LMI To Be Capitalised? Yes No

If LMI is to be capitalised, acknowledge the following have been completed

I have discussed that adding the lender’s mortgage insurance premium to the loan will increase the size of the loan and repayments. Each applicant appears to understand and wants to proceed.

I have discussed that adding the lender’s mortgage insurance premium to the loan will mean that the applicant will pay interest on it for the term of the loan. Each applicant appears to understand and wants to proceed.

PURCHASE OF NON REAL ESTATE ASSET ENQUIRIES Complete this section if Home Loan

Is the applicant planning to use all or part of the loan proceeds to buy goods? Yes No

If purchasing a non-real estate asset, acknowledge the following have been completed

I have discussed that the goods may not hold their value for as long as the remaining term of the loan and so the applicant may be paying for it beyond the useful lifespan of the goods. Each applicant appears to understand and wants to proceed.

I have discussed with the applicant the option of a separate loan with a shorter term for the part of the loan required for the purpose of the goods. Each applicant appears to understand and wants to proceed with the specified loan term.


REFINANCE

If Refinance, is the applicant refinancing an existing loan that has a remaining term of > 6 months?

Yes , complete the following No

Loan 1 Loan 2 Loan 3 Loan 4

Name of Lender

What is the interest rate on the applicant’s existing loan?

What are the fees and charges on the applicant’s existing loan not included in the applicant’s repayments and how often are they payable?

How much are the applicant’s repayments?

How often does the applicant make the repayments?

What exit fees/break costs does the applicant need to pay to close the loan?What is the remaining term (in years) of the applicant’s current loan/facility?

Why does the applicant want to refinance the existing loan (answer for each loan)?

Loan 1 Loan 2 Loan 3 Loan 4

Reduced monthly repayments under the new loan

Lower interest rate under new loan

Increasing total amount of loan

Greater flexibility under new loan

Extra loan features under new loan

Want to reduce number of lenders

Dissatisfied with other financial institution


Other details:


If Refinance, acknowledge the following has been completed

I have discussed that any Lenders Mortgage Insurance (LMI) already paid may not be refundable. Each applicant appears to understand and wants to proceed.

If Refinance, is the applicant refinancing an existing loan that has a remaining term of > 6 months and less than the new loan?

Yes, complete the following No

Why has the applicant requested a new loan term that is greater than the remaining term on their existing loan?

Improved monthly cash flow due to lower repayments


DEBT CONSOLIDATION

Is the applicant consolidating unsecured debt (e.g. credit cards, personal loans or car loans) into a home loan?

Yes No

If consolidating unsecured debt into a home loan, acknowledge the following have been completed

I have discussed that despite consolidating the debt into a lower interest rate loan, the term will be longer and the applicant may end up paying more interest, particularly if following the debt consolidation the applicant incurs further unsecured debt. Each applicant appears to understand and wants to proceed.

I have discussed that if the applicant can’t make the repayments, the property being used as security may be at risk. Each applicant appears to understand and wants to proceed.


FORESEEABLE CHANGES

Examples of Foreseeable Changes which may adversely impact the applicant’s ability to meet their loan repayments include: • a change to employment which may result in reduced income; • parental or other extended leave; • an upcoming bullet or balloon repayment for an existing loan; • an interest only, no repayment or honeymoon interest rate period for an existing loan ending.

FORESEEABLE CHANGES – APPLICANT 1

Does the applicant anticipate or plan any significant changes to their financial situation that would ADVERSELY impact their ability to meet their loan repayments?

Yes No

If yes, what is the timeframe for the change (select one)?

Within 3 Years Beyond 3 Years

If the change is Within 3 Years, what is going to change (select one)?

Temporary decrease in disposable income

Permanent decrease in disposable income

Anticipated large expenditure

Provide details of what is going to change within 3 years:

If the change is Beyond 3 Years, what is going to change (select one)?

Extended unpaid leave (e.g. maternity)

End of contract/loss of employment

Reduced Income

Retirement

Leaving employment

Medical treatment/illness

Increased debt repayments

Large expenditure


What is the applicant’s plan for making repayments when this happens (select one)?

Using Savings

Securing Additional Income

Application reflects change

Reduced expenditure

Sale of Asset

Provide details of the applicant’s plan for making their repayments when this happens:

FORESEEABLE CHANGES – APPLICANT 2

Does the applicant anticipate or plan any significant changes to their financial situation that would ADVERSELY impact their ability to meet their loan repayments?

Yes No

If yes, what is the timeframe for the change (select one)?

Within 3 Years Beyond 3 Years

If the change is Within 3 Years, what is going to change (select one)?

Temporary decrease in disposable income

Permanent decrease in disposable income

Anticipated large expenditure

Provide details of what is going to change within 3 years:

If the change is Beyond 3 Years, what is going to change (select one)?

Extended unpaid leave (e.g. maternity)

End of contract/loss of employment

Reduced Income

Retirement

Leaving employment

Medical treatment/illness

Increased debt repayments

Large expenditure


What is the applicant’s plan for making repayments when this happens (select one)?

Using Savings

Securing Additional Income

Application reflects change

Reduced expenditure

Sale of Asset

Provide details of the applicant’s plan for making their repayments when this happens:


SPECIAL CIRCUMSTANCES

“Special Circumstances” refers to circumstances other than those covered by the questions in the application on marital/spousal status, number of dependants under 18 years and post-settlement residential address. Examples of special circumstances which may impact on living expenses include:

• children in private schools;

• dependants (i.e. persons financially reliant on the applicant) who are 18 years or older, other than a spouse;

• dependants with health issues, disabilities or special needs.

Living in a remote location or the number of dependants under the age of 18 is not relevant as to whether there are “special circumstances”.

SPECIAL CIRCUMSTANCES – APPLICANT 1

Does the applicant have any special circumstances which may impact on their living expenses?

Yes No

If yes, what are the special circumstances?

Are the financial impacts of the above stated special circumstances included in the figures for living and fixed expenses provided by the applicant?

Yes No

If no, provide details of the financial impacts of the applicant’s special circumstances?

ARREARS – APPLICANT 1

Is the applicant over the credit limit, in arrears or in hardship in relation to any existing credit or other fixed expenses?

Yes No

If yes, please provide details of the arrears?

SPECIAL CIRCUMSTANCES – APPLICANT 2

Does the applicant have any special circumstances which may impact on their living expenses?

Yes No

If yes, what are the special circumstances?

Are the financial impacts of the above stated special circumstances included in the figures for living and fixed expenses provided by the applicant?

Yes No

If no, provide details of the financial impacts of the applicant’s special circumstances?

ARREARS – APPLICANT 2

Is the applicant over the credit limit, in arrears or in hardship in relation to any existing credit or other fixed expenses?

Yes No

If yes, please provide details of the arrears?


RETIREMENT STRATEGY ENQUIRIES – APPLICANT 1

If the applicant is >= 45 years, at what age is the applicant planning to retire?

Already Retired

Plans to retire at age of years

Plans to keep working and not retire

Complete the following if the applicant

• Is not retired AND

• their planned retirement age is >= 75 years OR

• will reach their planned retirement age above during the loan term

How is the applicant planning to pay off this loan once they retire (voluntarily or due to circumstances which arise)?

Repayment of loan prior to retirement

Downsizing of home

Sale of assets

Recurring income from superannuation

Superannuation lump sum following retirement

Income from other investments

Other, please provide details;

Provide details of the applicant’s repayment strategies once they retire.

RETIREMENT STRATEGY ENQUIRIES – APPLICANT 2

If the applicant is >= 45 years, at what age is the applicant planning to retire?

Already Retired

Plans to retire at age of years

Plans to keep working and not retire

Complete the following if the applicant

• Is not retired AND

• their planned retirement age is >= 75 years OR

• will reach their planned retirement age above during the loan term

How is the applicant planning to pay off this loan once they retire (voluntarily or due to circumstances which arise)?

Repayment of loan prior to retirement

Downsizing of home

Sale of assets

Recurring income from superannuation

Superannuation lump sum following retirement

Income from other investments

Other, please provide details;

Provide details of the applicant’s repayment strategies once they retire.

OTHER REQUIREMENTS AND OBJECTIVES

Does the applicant have any other requirements and objectives not already stated which may affect the suitability of this loan?

requirements and objectives summary – broker...wbc0245 bsa stg bom 0618 page 1 of 10 requirements...

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