Weekly Kath's Credit Crunch 16th December 2024

Merry Bloody Christmas Finance Friends!!! TWO AMAZING policy changes to end our 2024 Credit Crunch's with!

NAB and Advantedge - 1 year tax returns acceptable for self-employed income verification.

From Friday 13 December, you can submit a one-year tax return, accompanied by confirmation that it’s been lodged to the ATO, to verify self-employed income for home lending applications with an LVR 80% or under.

• • Over the coming months, we’ll update our credit policy and systems to reflect the change in policy. From March next year, tax returns will be the only document we accept to verify self-employed income for these applications.
  • While we do this, you can continue to provide two years of financial statements (profit & loss) to verify self-employed income for applications with an LVR 80% or under until further notice.

  For home lending applications with LVR over 80%:

  • There will be no change to the requirement to provide two years of financial information to verify self-employed income for home lending applications with an LVR over 80%.
  • However, you’ll now be able to provide either two years’ tax returns or two years’ financial statements (profit & loss).

  For home lending where financial statements are used to verify income:

  • If you provide two years’ financial statements and want these to be assessed based on the most recent year, this option is still available when you provide commentary outlining why recent performance is a more appropriate indicator of future performance – as you do today. 

CBA - LMI Waiver for Nurses! YES!!!

CommBank is helping more nursing professionals by waiving the LMI or Low Deposit Premium (LDP) cost for eligible registered and enrolled nurses. Please note there are a limited number of spots available with the offer beginning Friday 13 December 2024. 

Eligibility:  

• All practicing Registered and Enrolled Nurses, Midwives and Nurse Practitioners who are registered on the Nursing and Midwifery Board. 
• There is no minimum income criteria for this offer. 
• Additional eligibility criteria: 
  • Personal borrowers only 
  • Owner Occupied loan purpose only with Principal and Interest repayments
  • ​Standard Variable Rate (SVR), Fixed or Extra home loans 
• ​Off the plan purchases must have a signed contract of sale and be ready to proceed with settlement within 90 days. 
• Standard Loan to Valuation Ratio (LVR) restrictions apply. Note that these LVR limits differ from existing professional LMI LDP waiver offers (maximum LVR with LMI LDP is not to exceed 95%). 
• There is no change to how LMI LDP operates in the event of a shortfall. 
• This offer is not available for: 
  • Home Seeker, Bridging, Land or Construction loans 
  • Non-personal borrowers 
  • Investment home loans 
  • Top Ups 
  • Internal Refinance of existing CommBank home loans 
  • Please note: external refinance of a new security with a consolidation of other debts e.g. credit card, personal loan (excluding existing CommBank home loans) is allowed.   

Procedure: 

• Check eligibility by visiting the Nursing and Midwifery Board of Australia’s national register website and confirm your customer is a:  
  • Registered or Enrolled Nurse: checking the Division / Registration Type is a Registered or Enrolled Nurse. 
  • Midwife: checking the status is registered the profession is Midwife. 
  • Nurse Practitioner: checking the status is registered or enrolled and the profession is Medical Practitioner.  
• Upload evidence of the register check to support your customer meets the eligibility.   
• Add application comments to confirm you are applying for the LMI LDP offer. 
  • Nurse LMI LDP offer, I attest that: 
    • At least one applicant is a Registered or Enrolled Nurse, and evidence has been provided. 
    • I have confirmed with the applicant/s that as a limited offer, CommBank will be covering the associated LMI LDP charge for eligible nurses. This offer can be removed at any time and may not apply to any future lending.
    • I have sent the Low deposit options guide to the applicant/s 

Bank Australia - Clean Energy Loan Update

New qualifying criteria includes:

• All homes must be all-electric; no gas utilities are applicable.
• Stricter eligibility requirements to protect customers from sub-standard products and suppliers.
• The Clean Energy Home Loan - Key Information document, which includes specific criteria and required evidence for Renovate and New Build loans. It also features new interactive online tools to help you determine if your client qualifies for these loan products.

Clean Energy Home Loan pipeline - Applications received before 3 January 2025 that have not been contracted or funded:

• will be accepted under the Eco/Eco Upgrade and Eco Plus reduced rates. After this date, no further applications will be accepted under this criteria.
• that qualify for Renovate or New Build reduced rates (all-electric property, meets criteria, and required evidence provided) will be updated to the new rates before contracting.

Applications already contracted but not yet funded will be reviewed to determine if they qualify for the new reduced rates under Renovate or New Build.

• If the property meets all of the qualifying criteria and the customer is able to provide the required evidence, the relevant Renovate or New Build rate should be applied at funding.
• If the property does not meet all criteria, it will continue to be funded under Eco/Eco Upgrade or Eco Plus.
• Please note that existing Clean Energy Home Loan customers are not eligible for the new reduced rates under Renovate or New Build.

 The Brokers' Bible News:

• Annual Memberships now available offering a ONE MONTH DISCOUNT!

  • Buy now Individual

  • Buy Now Business

• Coffee and Credit Webinars starting up again in Feb 2025 – what policies do you want to deep dive on? Send me an email with any suggestion!

• Kath's Credit Crunch Back in Jan!

Have a wonderful, safe Christmas, my finance friends, and I look forward to serving you next year!

Kath