ANZ announces policy changes

As it stands, for home loan applications with a loan-to-value ratio of more than 85 per cent, evidence is required of three months’ genuine savings, on top of evidence of funds to complete.

The new ANZ policy will see owner-occupier FHBs allowed to provide history of rental payments as evidence of their ability to consistently save.

Satisfactory evidence of rental payment history can be demonstrated through either:

• three consecutive months’ rental statements from the customer’s real estate agent, evidencing rent paid in the name of at least one of the borrowers; or
• three consecutive months’ transaction account statements (of an account in the name of at least one of the borrowers) showing clearly identified rental payments being made.

Further, rental payments must be shown to have been consistently paid on time in order to be applicable to the new policy, with any payments overdue by seven days or more being considered “unacceptable”.

The evidence provided, such as rental statements, must be accurate within 60 days of the home loan application date.

The new genuine savings policy is only applicable for loans in which every borrower is a first home buyer.

Tax return validity period changes

In addition to the FHB genuine savings policy changes, the major bank has announced an amendment on the acceptance of tax returns in relation to home loan applications.

Effective from today (23 March 2020), ANZ will extend the tax return validity period for home loan applications by 7.5 months, extending validity from 31 December to 15 May, resulting in a total validity period of 22.5 months.

Under the previous policy, only 2019 tax returns were required as of 1 January 2019; however, under the new policy, the bank can accept 2018 tax returns and financials for any applications submitted on or prior to 15 May 2020.

This change will align with the ATO’s final cut-off for return lodgement.

According to ANZ, the extension of the validity period is applicable to any income verification that requires a tax return/NOA. This includes when a tax return is required for PAYG income verification, rental income etc.

For self-employed applicants, the required documents to verify income include the borrowers individual tax return as well as:

• ATO Notice of Assessment (NOA); or
• ATO lodgment receipt, as well as written confirmation from accountant stating that the tax return provided is final and the one that has been lodged; or
• the previous year’s NOA, as well as written confirmation from accountant stating that the tax return provided is final and has been lodged or will be lodged to ATO; and
• profit and loss statement and balance sheet for the trading entity; or
• the detailed business income and expenditure must be clearly evident in the borrower’s supplementary income self-employed worksheet of their individual tax return.

[Related: NAB to freeze repayments for distressed mortgage customers]