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Auswide rolls out new investor loan, updates policy

The non-major bank has announced a swathe of changes, including income policy for servicing calculations and a new product launch.

Auswide Bank has announced that its Basic Home Loan product, which was launched in June for owner-occupiers, has been expanded to investors.

Commenting on the launch of the product, the bank said: “At Auswide Bank, we understand that for many customers, their investment loan does not need to come with all the bells and whistles.”

“They just want their investment loan to be simple, easy to manage, with little or no fees and a great rate.”

Effective from 8 October, customers who want to build or buy an investment property will be able to access what the bank has called its new “no fuss” Basic Investment Home Loan.

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According to the bank, in conjunction with a credit policy change to its investment loan-to-value ratio (LVR) bands, investors will be able to access up to 80 per cent LVR (including lender’s mortgage insurance) for both principal and interest and interest-only investment lending,

Borrowers can borrow up to 80 per cent of the security value. Other features include no monthly or ongoing fees, free online redraw, ability to make payments weekly, fortnightly or monthly, and no penalties for additional or lump sum repayments. It is available for construction purposes.

The Basic Investment Home Loan will be made available to select as a product in ApplyOnline and in aggregator software from 8 October. The broker website will include updated interest rate information sheets for the product on this date.

Serviceability update

The bank has announced that effective 8 October, it is reinstating its casual income policy, where an applicant’s income that meets its criteria can be used in servicing calculations.

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The criteria include:

  • PAYG – casual employment 100 per cent: Minimum 12 months continuous employment with the same employer;
  • Supporting documents required: Must provide PAYG summary or ATO statement for the last financial year, in addition to two current payslips dated within 30 days of the loan application date; and
  • Calculating allowable income: Adopt the lower of the current payment annualised or the PAYG summary/ATO statement annual figure.

Process and policy changes

Along with the launch of the investment loan product, the ASX-listed bank has announced that it is introducing new technology to improve time frames for completing the verification and validation of supporting documents.

“The bank has adopted the same technology currently used by lenders who have market-leading turnaround times and deliver an enhanced broker and customer experience,” the bank said.

Supporting documentation will no longer be required to be uploaded into ApplyOnline. Instead when brokers submit applications in ApplyOnline, they will receive an auto-generated email. They will need to reply to the email attaching all of the required supporting documentation for the application.

The new process for lodging supporting documents is effective from 12 October.

Updated checklist

As a result of adopting the new technology, the bank has updated its broker pack and supporting documents checklist, which will be available from 8 October.

Brokers lodging loan applications with the bank are required to use the new documents in preparation for the release of the new technology.

The following documents will be mandatory to use from 12 October:

  • Part A – broker loan summary and application: The broker pack has now incorporated aspects of a customer’s loan application that were not catered for in previous versions in order to reduce the number of more information required (MIR) requests sent to brokers; and
  • Part B – supporting documents checklist and broker declaration: The checklist has been updated to provide better clarity regarding details of the documents required to support a loan application. Some aspects of policy that need to be considered have also been included in general information, while the broker declaration page has been updated to identify the type of interview that has been conducted.

The bank has noted that AOL auto-population functionality for part A, as well as the broker declaration page, are currently being built by NextGen. This functionality is scheduled to be available in ApplyOnline in the late November release.

[Related: Lender hits FHLDS limit]

Auswide rolls out new investor loan, updates policy
Auswide rolls out new investor loan, updates policy
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Malavika Santhebennur

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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