G'Day
Well, frankly, I'm gob smacked at the scurrilous innuendo written in this thread.
It’s easy to write absolute drivel when you are hiding behind a nom de plume.
Nth Brisbanite has asked for a serious response to his questions and some posters have written a Kim Philby novel! Good grief!
I have written about this product in other threads and as I have mentioned, it is an almighty task to completely upgrade and revamp all information on a website. Overlooking or leaving information which is of a lesser advantage to the consumer is regrettable however I have written to my Operations Manager advising that some people are confused because the information has not yet been updated.
Technical Information:
The Self Employed Pro Pack is a Low Doc loan. Eligible borrowers are those who do not have or who choose not to provide tax returns or other financial information.
The borrower DOES NOT need to have an ABN nor do they need to be registered for GST.
However, if a borrower does have an ABN and wishes to declare it, then the ABN must have been registered for more than two years and if relevant, registration for GST would be applicable.
As a Low Doc loan a statement must be made regarding Income, Assets & Liabilities, and usual documents as required for eg Identification, Contract of Sale, Rates notice of an existing property offered as security for the loan, etc Supporting documents vary depending on the circumstances however financial documents are not required.
The product is available for loans of more than $150,000 and up to $1,000,000 per security. The loan can be more if more than one security is provided.
If the amount of borrowings is more than 60%LVR or more than $1,000,000, then mortgage insurance will be required and is paid for by the borrower. The borrower can pay this separately or capitalise it to the loan provided that the gross loan does not exceed 90%LVR
This is a Professional Pro Pack product. There is an annual fee of $300 and the product has unlimited deposits (min $500) and redraws (min $100). The borrower can register for internet banking and transfer money between their ordinary bank account and their home loan as many times as they like. Loan payments are made by direct debit or salary crediting.
The product can be Interest Only for up to 5 years. After two years, if anything better comes along, the borrower can ‘switch’ to any other Low Doc product or, if they want to provide financials, can ‘switch’ to any Full Doc loan. ‘Switching’ costs a set of loan documents, usually $295.
The Application Fee of $395 includes provision for loan documents and settlement fees. The borrower pays a contribution of $200 towards the cost of the valuation.
Loan Statements are issued each six months but with internet facilities the loan can be viewed in real time and managed (deposit / redraw) by the borrower.
If the loan is paid out within three years then 1% of the original loan amount (plus any approved increases) would be payable.
‘Switching’ loans is not closing a loan, it is a benefit provided by the lender to assist customers whose circumstances may have changed after two years – or there may be products more applicable to the customer.
So it is very straightforward. RAMS has always been known as a very ‘user friendly’ lender with a ‘let’s make it happen’ attitude and the changes now and in the pipeline will enhance consumer accessibility to competitive home and investment loans.
Westpac has made a significant investment in purchasing the Franchise Operations – there are now more than 100 retail operations across Australia. We are well positioned to be able to be ‘local’ walk-in facilities which can offer the customer a real choice in loan products.
Regarding the calculation of the Lenders Risk Fee: This is not a flat rate but depends on the loan amount and the total exposure, and is calculated by the mortgage insurer and not by the lender. It is not, as Nth Brisbanite indicated earlier, a flat 2% of the loan amount. The insurance premium can be capitalised to the loan, but as I have mentioned, the total loan amount cannot exceed the 90%LVR
New product brochures are now available and the above information is a Plain English version of how the product is described in the brochure. I am happy to post copies to those who are interested, or keep an eye on the website and I am sure it will be updated soon!
Regards
Kristine