A non-bank lender has announced updates to its serviceability assessment criteria, including changes to requirements for applications from self-employed borrowers.
Resimac has informed brokers that it will require full-year 2017 (FY17) and FY18 tax returns for all new self-employed full-doc applications submitted from 1 April 2019.
The non-bank added that Notices of Assessment (NOA) are required to prove lodgement with the Australian Taxation Office (ATO) and to verify there are no outstanding tax debts.
Resimac has also announced changes affecting Resimac Prime and Resimac Specialist applications where a purchase property has not been identified.
Also effective 1 April 2019, Resimac will provide “Approval in Principle” (or Pre-Approval) rather than “Conditional Approval” for such applications.
The non-bank noted that such applications will be subject to a system-generated assessment process with no physical review of the supporting documentation taking place.
Resimac added that an “Approval in Principle” letter issued will be based on information provided in the electronic application only and will be subject to the following conditions:
- Receipt and review of all supporting documents, including a purchase contract
- No significant changes in financial position
- Formal assessment of the application
- Satisfactory valuation
- Satisfactory credit check
- Identification of all borrowers
The lender claimed that the change is part of its “continued focus on process improvement”, and “enhancing the experience of doing business with Resimac”.
Citi lifts credit card buffer rate
Meanwhile, Citibank Australia has announced that it has increased the credit card serviceability assessment rate from 3.00 per cent to 3.80 per cent for new and existing customers, effective immediately.
Citi noted that the change was part of its commitment to aligning with regulatory requirements, following the Australian Securities and Investments Commission’s Credit Card Lending in Australia review.
The regulator noted that it expects credit providers to:
- take proactive steps to address problematic credit card debt and products that do not suit consumers
- minimise the extra credit provided to consumers who regularly exceed their credit limit
- allocate repayments for all credit cards in the more favourable way required for cards entered into after July 2012
[Related: Major bank raises rates on lines of credit]