The non-major bank has amended its home loan policy to reflect the financial impacts of COVID-19 on customers.
Bank of Queensland (BOQ) has announced changes to its home lending policy, effective from 11 May.
The temporary changes to the policy include the tightening of – and an increase in – income verification requirements from customers before deciding whether to proceed with a funding request.
“In these uncertain times, it’s important that we understand a customer’s ability to tolerate any financial impacts that may result from COVID-19 before deciding whether to proceed with a funding request,” BOQ said in an update to brokers.
BOQ outlined changes it has implemented across various income types, including commission and bonus income, BASE PAYG income and self-employed borrowers.
Commissions, investment income, bonus income
The bank has applied the temporary changes to customers who receive commissions, investment income (interest or dividends) and bonus income.
Income streams remain acceptable by the bank, but the use of commission, investment income and bonus income must be referred and accepted by retail credit risk assessment. The bank will require additional supporting commentary to be provided around income stream.
BASE PAYG income
The applicant’s PAYG income must now be validated via either:
In addition to current self-employed requirements, self-employed applicants must provide their most recent business activity statement (BAS) at the time of the application, with turnover supporting financial information utilised.
BOQ has joined several lenders in tightening serviceability standards for lending as individuals bear the economic impact of COVID-19.
Other lenders who have announced changes to their lending policies include major banks Westpac and NAB, and non-major banks such as Bankwest, ING, Gateway Bank, MyState Bank, Heritage Bank and a number of non-banks.
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.
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