A non-major bank has updated its income verification policies to “keep pace” with the changing landscape of employment in Australia.
Industry super fund-owned bank ME has announced changes to its income verification policies to address what the bank said is the “changing nature” of the Australian workforce.
In a note to brokers, the bank said it has changed the way it assesses income verification and restrictions to suit the growth of casual employment over the past three decades.
“This is to ensure that ME is keeping pace with the changing nature of work while ensuring appropriate verification of employment conditions,” the bank said in a statement.
From 4 February, ME made the following changes to the way it verifies income:
Changes to income variance rules
ME has also announced it is updating its policy around the use of variable income.
Where the variance from last year’s income exceeds 10 per cent, ME will now accept a greater variance when the borrower provides clear mitigating comments supporting the income to be used.
However, the borrower’s file must include a clear explanation as to why this income has been included (for example: applicants being on previous maternity leave; previously part-time; having a recent promotion, etc.).
Applicantions submitted prior to 4 February will be subject to ME’s previous policy rules.
For approvals in principal (AIP) that were issued prior to 4 February, new policies can apply where the loan amount has not increased, where there has not been any increase in the loan-to-value ratio, the customer’s financial position and employment details remain the same, and standard AIP criteria apply (for example, acceptability of security).
[Related: ME amends mortgage serviceability policy]
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.
Mortgage Choice and Smartline will operate under one brand, effe...
COG Financial Services has grabbed larger stakes in Westlawn and ...
The personal lender has announced a $200 million warehouse facili...