Westpac pulls 95% loans

[Buzz]

Effective 26 April 2009 the Bank is making the following Credit Policy changes:

MAXIMUM LVR
• Maximum LVR of 92% for new customers to the Bank
• Maximum LVR of 97% for existing customers of the Bank Existing Customer

AIPS must be made formal by that date

SERVICEABILITY
• The monthly interest rate buffer, used to assist in serviceability calculations, has increased to from 0.10% to 0.13% (+0.03%).

GENUINE SAVINGS
• The Non Genuine Savings product has been removed from sale
• 5% Genuine Savings is to be validated for all:

RAMS rumoured to follow suit Monday.

Jane

 

[JamesGG]

I'm curious, Jane; what does existing customer mean?

Like, only someone already holding a mortgage... or, could someone say, open a cheque account or take out a credit card with Westpac, and then get access to the higher LVR that way...?

 

[sash]

CBA has the same policy...I queried my rep there and they said it does not apply to me. Not bcause I was important...they are simply trying to ensure that the FHBs a sub prime mess is created when rates eventually go up.

I am still able to get 95% loans.....

FHB in recent years have only consituted less 11% of the market....then suddenly they were like 25% of the market.

You don't have to be a statician to see where that was going!!

 

[Buzz]

Interesting question, every bank has a different definition, I believe CBA is that you have to actually have a loan product I will try to find the wording and re post:-

However for Westpac an existing customer is defined as:-

Been a Westpac Customer for the last 6 months (excluded tenure with other Westpac brands eg St George)

• A customer score value generated within Westpac origination system once a customers history is established with the bank, normally after 6 months. Please note: The system run credit decision applies the above criteria for existing customers.

Clear as mud? Essentially you cant just open an account.

Jane

 

[Qlds007]

Didnt take RAMS long

Please be advised that RAMS has introduced the following changes to its credit policy for the broker channel:

• The maximum LVR available will now be 90% (previously 95% LVR)


• All loans where mortgage insured, will become "standard" loan applications requiring a deposit of 5% minimum genuine savings


• Mortgage Insurance premium capitalisation is to a maximum LVR of 92% for fully documented loans (90% LVR + 2% LMI) and 82% for low doc loans (80% LVR + 2% LMI)


What is classified as genuine savings?
Where the LVR exceeds 80%, a 5% minimum deposit is now required which is sourced from the borrower’s genuine savings and must be verified with satisfactory evidence.


Examples of genuine savings could include:
• Personal savings accounts or term deposit accounts
• Real estate equity
• Tax refunds
• Bonuses and dividends
• Accessible superannuation (non-preserved portion)
• Historical Rental Statements (New)
• Value of Excess loan repayments (New)

 

[Buzz]

Here is CBA definition of a current customer - essentially you need to have lending ( this includes a credit card):-

A 'current credit facility' is defined as an existing consumer lending product (i.e. Home Loan, Investment Home Loan, Line of Credit, Personal Loan or Credit card) which has been funded for at least 6 months with no arrears or missed payments. Closed accounts are ineligible.

Customers cannot borrow above the maximum LVR of 90% if:

They do not have a current consumer lending facility (i.e. Home Loan, Investment Home Loan, Line of Credit, Personal Loan or Credit Card) OR
They have a current consumer lending facility that has been funded for less than 6 months


NB with genuine savings for FHOG's out there note RAMS take proof of your last 12 months rental payments with a signed lease as contributing to evidence CBA does not and Westpac has just changed their policy to not accept this either.

Hope this helps
Jane