NAB implements changes to mortgage application process

NAB has announced that it will require brokers to submit further documentation when submitting a mortgage application, in addition to a broker declaration form.

NAB currently requires brokers to submit:

• a broker interview guide (BIG)
• a customer/company consent form
• a customer identity check form and ID
• income verification
• a living expense worksheet

Effective today (26 February), where applicable, the following three documents will need to be provided upfront with all new home loan applications:

• valuation/s (attached or requested)
• contract of sale (if applicable)
• refinance statements (if applicable)

SMSF policy changes

Further, NAB has also announced changes to its self-managed superannuation fund (SMSF) loan offering, as part of its “ongoing review of products and policies”.

From Friday, 29 March 2019, NAB customers will be required to meet the following criteria in order to be eligible for SMSF business lending:

• existing relationship with NAB (at least 2 years)
• borrowing needs of $1.5 million or greater (per transaction)
• minimum of $5 million in total net assets in SMSF

Other credit parameters to be put in place by NAB include:

• fully amortised principal and interest repayment over the term of the loan
• cash reserves remaining in the SMSF at settlement being the equivalent of 12 months
• all members of the SMSF must be in accumulation phase when the funding is provided and for the duration of the loan tenor

NAB stated that it will no longer accept new SMSF applications, unless all of the above criteria are met, but noted that it would continue to support existing SMSF lending arrangements.

The major bank stated that its decision followed a review of its policies and products.

“Lending to SMSFs is more complex and requires additional consideration, and for this reason, NAB has altered the SMSF offering to ensure our customers are in the best position to obtain their desired financial outcomes,” the bank noted.

[Related: Bank adjusts credit policy for bridging loans]

NAB implements changes to mortgage application process

Reporter

Last Updated: 25 February 2019 Published: 26 February 2019

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Written by Reporter

Last Updated: 25 February 2019

Published: 26 February 2019