February 18. Money Broker Lending Guide

Transcription

1 1 Virgin February 18 Money Broker Lending Guide

2 Important Information Information in this guide was prepared by Virgin Money (Australia) Pty Limited ABN prospective borrowers or third parties without the prior written consent of Virgin Money Australia. Virgin Money (Australia) Pty Limited ABN promotes and distributes the home loans as the authorised credit representative of the credit provider, Bank of Queensland Limited Policy and does not purport to be a complete statement of Summary of that policy. It must not credit Assessment Criteria. Whilst Virgin Money has taken due care in preparing this Guide no warranty is given in relation to the accuracy of this document and neither it, nor any of its related bodies corporate, nor employees, directors or other persons associated with these entities accept liability for any acts or omissions in reliance on this guide. 2

3 Who are we? You probably know the Virgin brand trusted globally and well-known for shaking things up and providing real alternatives when we think people deserve a fairer go. At the heart of our value proposition is: Placing our people, partners and customers first Rewarding genuine loyalty Being transparent passionate about helping people realise bigger possibilities through the delivery of beautifully simple and rewarding financial products, all backed by Virgin We focus on providing a rewarding proposition and great customer experience. Our home loans are supported by dedicated Virgin Money broker and customer support teams. 3

4 Key Features Repayment Types Interest Offset Fixed Rates Weekly, fortnightly and monthly P&I repayments Monthly interest only repayments 1-5 year interest only terms available 10 year interest only term available for investors Home Loan Companion Account 100% offset capability on all variable rate loans 100% offset also available on 1 year fixed rate term loans 1-5 year fixed rate terms Up to $10k per annum in additional repayments during fixed rate term accepted Loans up to 90% LVR revert to a discounted variable rate on expiry based on loan amount and LVR at loan approval. Accessibility Free redraw (minimum amount $100) Online and mobile access to your home loan and companion account via our Virgin Money Hub. Refer to virginmoney.com.au/partners for full information and offer terms & conditions 4

5 Reward Me Home Loan Fee Type Key Fees Amount Monthly Fee $10 per loan account (split) per month Settlement Fee $150 First Valuation Fee $0 Additional Valuation Fee/s (per additional security) Additional Security Fee Quoted on application $150 per additional security Document Variation Fee Rate Lock Fee Construction Loan Fee $200 when change initiated by client 0.15% of Loan Amount $250 (covers 4 drawings) For further information on applicable fees and charges refer to the product key fact sheet available at 5 Refer to virginmoney.com.au/partners for full information and offer terms & conditions

6 Eligible Borrowers & Guarantors - Individuals aged 18 or over (all individuals must be either an Australian citizen or a permanent resident living and working in Australia) - Individuals who are PAYG employees - Self employed individuals - Joint applicants where all debtors will receive a benefit Applications - Temporary Residents (eligibility requirements apply) Ineligible Borrowers - Strata Corporations - Company or Trust entities - Non-residents - Owning or employment in a prohibited and restricted industry as defined by VMA - Applicants solely reliant on a government pension or benefit Or reliant on non- Australian income. Loan Interviews - Brokers must conduct a face to face loan interview with all borrowers and guarantors - Brokers must meet our Customer Identification requirements - Retain on file all original documents provided or signed by the borrowers 90 Validity Period for Approvals - Approvals remain valid for 90 days from date of approval - A new application will be required after the 90 day approval period Guarantees All guarantees taken from personal customers must be limited to a specific amount, relating to the approved debt. Where the borrower and the security provider are not identical, a Guarantee is required from each security provider. All guarantors must obtain independent legal and financial advice. 6 discretion and

7 Loan Purpose Loan Amounts Genuine Savings Lending Parameters Purchase, Refinance, Construction or Debt Consolidation & Equity Release (Cash Out) Minimum $75,000 / No Maximum without LMI or up to $3m subject to LMI approval Minimum Loan Split Amount $25,000 Maximum total loan amount of $2.5m for interest only loans (total aggregate borrowings on IO products). Above 90% LVR Genuine Savings is generally required. Non-Gen savings can be considered if applications meet certain criteria: Must be an owner occupied purchase Repayments must be on a P&I basis Security must be under 2.2 acres Maximum LVR Owner Occupied 95% + LMI capitalisation for purchases, and construction loans with genuine savings 90% + LMI capitalisation for purchase, refinances, purchase of vacant land, construction loan with non genuine savings. 80% maximum for interest only loans Investment 80% maximum no LMI (criteria applies) 90% maximum LVR inclusive of LMI capitalisation 80% maximum for interest only loans Note: Where LVR is > 90% the NMS (Net Monthly Surplus) required is $200 Note: If an application includes both interest only and principal and interest loans, the LVR restrictions detailed above will apply where more than 30% of the overall borrowings are interest only Term Maximum 30 years 7

8 8 Income and Employment

9 Acceptable Primary Income Sources Full time or permanent part time 100% of gross income. 2 nd Part time 80% of a 2 nd part-time position with a minimum of 12 months continuous service. PAYG Salary and Wages (full time, part time, casual or contract) Casual 80% of gross income up to the equivalent full time job (40 hours per week) where the borrower can demonstrate a minimum of 6 months continuous service with the same employer. Employment contract 100% of gross income is to be used when calculating serviceability where the borrower can demonstrate: a minimum of 12 months continuous service with the same employer; and a minimum of 2 years continuous services in the same occupation. Education or Private schools. PAYG income validation The most recent payslip being no older than 30 days prior to the application date Where bank statements are used to validate PAYG income, the latest statement cannot be older than 30 days prior to the application date Rental Income 80% of gross rental income as validated. 70% gross rental commercial property, multiple units and high density units, excluding high density units in prescribed Brisbane locations and properties located in a Mining Town. 60% gross rental income for car park space, student accommodation and high density units in prescribed Brisbane locations. 50% of gross annual rental income, Serviced apartments/holiday rental income/airbnb 9

10 Additional Sources of Income Overtime, Shift allowance and Penalties Commission Permanent Government Pensions (i.e. Veteran Affairs, Disability or Old Age Pension) 80% if the payment is a regular and ongoing condition 100% (essential service industry only) if the payment is a regular and ongoing condition Note: Essential Services Industry being Ambulance, Police, Fire Service, Medical Doctors, Medical Nursing & Corrective Services 80% if the payment is a regular and ongoing condition 100% of payments Note: Single parent payments are not ongoing hence are not acceptable Family Allowance (Family Tax Benefit Part A and Part B) 100% of payments where the child is less than 11 years old Child Support 100% where the child is less than 13 years old 10 discretion and

11 Additional Sources of Income Car Allowance 100% of car allowance Site Allowance Investment Income (Interest or dividends) 50% of site allowance, subject to: - and - has been earned over a minimum of two years consecutively. 80% of gross income from the lower of the last 2 years tax returns Bonus Income 80% of the lowest bonus income earned in the last two years Note: It must be confirmed as a permanent ongoing condition of their employment and have been earned over a minimum of two years consecutively. Maternity Leave 100% of Maternity Leave Payment up to 80% LVR, (Employer paid or Government paid working parent payment) subject to no payment gap more than 60 days from end of payment and resumption of employment income Note: subject to Genworth policy of 50% of employer Maternity Leave Payment and government Paid Parental Leave Payment, refer to full underwriting guidelines. Probationary Employment The borrower on probation is allowable if: Probation is with the same company that the applicant has been continuously engaged with for a minimum of 12 months; or Their prior employment in the same occupation is greater than 2 years and no more than 4 months break in employment. Prior employment will be confirmed by phone 11 discretion and

12 Validating Income Documentation Requirements For PAYG Borrowers For Overtime, Shift Allowance or Penalties For Commission Either of the following documents must be obtained: The 2 most recent electronically issued or paper payslips, which must be verified. The most recent payslip being no older than 30 days prior to the application date. AND 3 consecutive months bank account statements prior to application date showing regular salary credits, with the name of the employer evident. If salary credits are not for the same amount, the lowest amount of these credits should be used for serviceability calculation. The latest bank statements cannot be older than 30 days prior to the application date. Obtain either the: A verbal verification from employer, confirming overtime is a regular and ongoing condition of employment; and either: 1. If more than 3 months of the financial year (1st October onwards), obtain the two most recent payslips showing overtime, with the average monthly income to be taken from the total YTD overtime OR 2. If less than 3 months of the financial year has occurred (i.e. prior to 1st October), obtain both: the two most recent payslips showing overtime, AND written evidence of the overtime paid in the prior financial year, by obtaining either Obtain either the: - a letter from the employer; or - the last payslip for the prior financial year with the average monthly income to be taken from the total YTD overtime. Letter from employer / employment contract, OR A verbal verification from employer, confirming commission is a regular and ongoing condition of employment; AND Written evidence of the commission received over the 6 months prior to the application date and then annualised. Acceptable documents are either a letter from employer, or a payslip showing commissions earned over the 6 month period. 12

13 Documentation Requirements (Continued) For Self Funded Retirees Family Employment For Maternity Leave Payment For Self Managed Super Fund Retirees For Government Pensions For Family Allowance (Family Tax Benefit Part A & Part B) For Child Support Payment For investment Income (Interest or dividends) Bonus Income Gross income as confirmed by last two annual funds statement (if confirmed as non taxable) or the last 2 years tax returns. Superannuation and/or investment statements showing current balance. Where the borrower is employed by family or through a family owned or controlled business, letters of employment or payslips must be supported by minimum last three pay deposits shown in bank statements. Valid Signed and dated confirmation letter from the employer containing employer name; and ABN (except Government employer), employee name, salary amount and proposed return to work date. Last 2 years tax returns with the most recent being no more than 18 months old; and Superannuation and/or investment statements showing the current balance Statement of benefits (not more than 3 months old) issued by CentreLink; or the Department of Veterans Affairs; or 3 months current bank statements confirming receipt of CentreLink payments. CentreLink Statement of benefits (not more than 3 months old) must be provided by the customer; or 3 months current bank statements confirming receipt of CentreLink payments. Note: Rent Assistance that forms part of the Family Tax Benefit Part A is unacceptable income. A copy of the Maintenance Agreement registered with the child support agency; and the 3 most recent months current bank account statements showing regular credits The 2 most recent tax returns no more than 18 months old; and A copy of current account statement or share certificate or CHESS statement. Copy of letter of entitlement from employer or employment contract; and Letter from employer detailing the bonus amounts received over the past two years, supported by either a tax return, PAYG payment summary, payslip, or bank statement credit entry. 13

14 Documentation Requirements (Continued) For properties being purchased: For existing rental tenancy, obtain either the: - Signed current lease agreement; or - Latest monthly real estate agents tax statement; or rental statements issued by the managing agent within 90 days; or -Contract of Sale, where current tenancy details (rent, lease terms, and tenants) are stated. For non-tenanted property, obtain either the: - Panel Valuer estimated rental income; or - amount). For Rental Income For properties already owned by the borrower, any one of the following: Signed current lease agreement; or Latest monthly Real Estate Agents Tax statement; or Rental statements issued by the managing agent within 90 days; or The most recent personal tax return; or For properties converting from owner occupied to investment, any of the following is acceptable to confirm proposed rent: Copy of the recent valuation if undertaken Copy of proposed lease agreement A letter from a local agent confirming expected rental income. For Defence Housing Australia (DHA) lease, a copy of either document providing it is no more than one year old: A copy of the DHA lease agreement The most recent written rental confirmation from DHA Note: If multiple sources of evidence are available, the lowest rental amount must be used in all cases. 14

15 Documentation Requirements (Continued) Any one of the following: Tax return confirming the previous 12 months rental income; or Letter from Managing Agent outlining the expected annual rental income (for properties being purchased only). Serviced Apartments/Holiday Rentals For properties rented through 'airbnb' any one of the following: 'airbnb' transaction statement or letter confirming the previous 12 months rental income; or most recent lodged tax return confirming the previous 12 months rental income. Note: The acceptable age of required documentation is in relation to the date of the application. Refer to slide 8 for the required PAYG income document age. 15

16 Payslip Validation PAYSLIPS MUST NOT BE HANDWRITTEN & CONTAIN AS A MINIMUM: 1. Borrower Name 2. Employer Name 3. Employer ABN (except for Government Bodies) 4. YTD income figure 16

17 Unacceptable Income Any form of income not listed in the above sections is considered unacceptable. Unacceptable Income Examples of income sources that fall into this category are: Seasonal income Entertainment and travel allowances (including any meals, accommodation, offsite, or other such allowances) Non-permanent allowances (e.g. Higher Duties) Income from boarders (e.g. owner occupied property) New start or unemployment benefits, workers compensation, sickness benefits Any other government benefits or pensions that are not of a permanent nature i.e. single parent payments childcare benefits, or carers payments Income of a Non-Recurring nature Cash payments Leave loading Rent Assistance Overseas/Foreign income. Casuals with less than 6 months employment 17

18 Applicants Self-Employed Term Income Validation Servicing Self Employed Lending Individual borrowers only (no trust/company borrowers) Minimum 2 years self-employed Self-employed income: Individual - last 2 years personal & business tax returns and Tax Assessment Notices, no more than 18 months old Non Individual entities (including Partnerships) - last 2 years personal & business tax returns and accountant prepared Profit & Loss and financial statements. Tax status confirmed by Tax Portals and Integrated Client Account Portal for each self - employed borrower and guarantor. Must be registered for GST Servicing is based of the lower of: Average net profit of last two years tax returns; or Net profit from the most recent tax return Validating Tax Status Confirm the taxation status of the self-employed borrowers (personal and business) by either: A written confirmation from the selfindividual borrower names and/or entity names, taxation year, and status; or A copy of the business Income Tax Lodgement Status Portal and the Integrated Client Account Portal; Income Tax Account Portal (companies only); or An Australian Tax Office receipt confirming the payment of an outstanding ATO notice. Note: - Where taxation payments are in arrears, application must be referred to your BDM for full review and assessment. - Tax Assessment Notice / Notice of Assessment (NOA) must be no more than 18 months old. 18

19 Only expenses which fall within the below categories are considered an allowable add back for serviceability purposes: Directors superannuation for amounts paid above the current legislative requirement (refer Serviceability Worksheet Guide) Depreciation of assets Interest expense Note: where interest expense is added back, there must be a corresponding liability included in the application, and addressed in the calculation of debt servicing; or If the liability relating to the interest confirmation held from the financier or the applicants accountant, that the debt is fully repaid or limit closed. Finance lease expense Note: where a lease expense is added back, the lease commitment must be included for the calculation of debt servicing) Extraordinary expenses; Add backs for serviceability 19 For further information download the serviceability calculator guide or contact your BDM

20 Unacceptable Add backs for serviceability Unacceptable add backs can include, but not limited to the following: Donations; Advertising expenses; Capital Losses; Bad and doubtful debts; Legal expenses; Start-up costs; Stock replacement or stock write offs; Business motor vehicle expenses; Club subscriptions / memberships; 20 For further information download the serviceability calculator guide or contact your BDM

21 Loan Purpose Maximum LVR Documentation Valuations Construction Loans Construction of residential property Purchase vacant land & construction of residential property (house & land package) Property Improvements (including renovations) Contracted Licensed builders only Maximum 95% LVR with capitalised LMI (5%genuine savings required) Maximum 90% LVR inclusive of LMI where non-genuine savings exist Vacant Land 90% LVR inclusive of LMI Fixed Price Builders Contract (signed & dated) - the schedule of payments in the contract must be in accordance with relevant state/territory laws and under standard contract terms by the Housing Industry Association or Master Builders Association Copy of council approved plans and building specifications Copy of the builders registration./certification documentation Copy of the builders Insurance policy with constructed Quotes of any work not included in the builders fixed price contract but may be needed for the valuation e.g. Landscaping Valuations are required at the following stages: 1. At initial stage prior to commencement of construction to confirm land value and construction costings as if complete valuation 2. At practical completion (Final Inspection Report) prior to the final loan drawdown 3. Progress Inspection Reports will be required for: Construction of Multiple Dwellings or; A single residence where the total construction cost exceeds $1M Progress Payments First drawdown must occur within six month from disclosure date. Progress payments to be in line with State/Territory laws up to a maximum of 75% of the contract paid up to lock-up stage (80% in WA) Borrowers contribution to be fully used before the first progress payment Final drawing must be within 18 months. 21

22 Guarantee Lending Mandatory for all Guarantees Available for owner occupied purchases and investment purchases only Refinancing of existing facilities with guarantor security is subject to review & assessment Limited to a specific dollar value Independent legal and financial advise must be sought Spousal Guarantee Family Guarantee Guarantor income available for servicing where guarantor is the spouse/partner of the borrower Full verification of income in line with validation policy Security Guarantee only Guarantor must be an immediate family member (parent or sibling) Application to be lodged as two separate loans: 1. Customers names utilising the property being purchased as sole security 2. Customers & Guarantor utilising the purchase property & guarantor security with guarantee limited to loan amount of second application. Servicing - Applicants to demonstrate serving on total debt Guarantors to demonstrate servicing on limited guarantee amount plus their existing commitments First mortgage only no second mortgages Fees $10 per month per application and loan split Additional Val fee & Security fee on second application 22

23 23 Documentation

24 Validating Savings, Account Conduct and Expenses Documentation Requirements Valid Account Statements. Account statements are used for a variety of validation purposes, including validation of identity, account conduct, savings history, income, living expenses, and employment. Account statements must be either original documentation issued directly by the financial institution or electronically issued documents obtained via internet banking, or internet transaction listing and acceptable as detailed below: Valid Account Statements Requirements Account statements or electronically issued statements are acceptable if they satisfy all the following requirements: Display the logo of the bank or other financial institution; Display the Borrowers name, full BSB and account number; and Individual transactions are itemised and there is a running account balance. Internet Transaction listings are acceptable if: Either: - - Individual transactions are itemised and there is a running account balance. Or, - Obtain bank account statement(s) dated within the last 12 months prior to the application date; - Match the account number on any internet transaction listing to the bank account statement/s provided; and - Individual transactions are itemised and there is a running account balance 24

25 Documentation Requirements Validating Savings, Account Conduct and Expenses (Continued) Transaction Account Statements Most recent 3 months consecutive months of their main transaction account statements prior to the application confirming their transaction history living expenses, and salary credits where the salary and living expenses are transacted through. Most recent 3 months consecutive bank account statements showing regular salary credits with the name of employer evident. When a credit card is the only account used for transactions then three months credit card statements will be required. Account statement/s to be no more than 30 days old at the date of application, All statements must meet the Valid Account Statements requirements. Refinancing External Existing Debt All Break Costs and Exit Fees; 6 consecutive months for Home Loans, Investment Loans, Personal Loans and Line of Credits; 3 consecutive months for Credit Cards (if paying out credit cards); and Statements can be no more than three months old at the date of the application. All statements must meet the Valid Account Statements requirements. 25

26 Documentation Requirements Validating Savings, Account Conduct and Expenses (Continued) Genuine Savings 5% genuine equity if mortgage insurance is required; The equity must be held in the name of at least 1 borrower and can include: Funds held in a Bank Account or Term Deposit for 3 months or more; Equity in residential property owned for at least 3 months; or Shares held for at least 3 months. be accepted subject to lending criteria. Note: Rental Payment History cannot be utilised as the sole source of genuine savings. Non-Genuine Savings Where the customer cannot demonstrate genuine savings, such applications may be considered if the customer has non-genuine savings and the following is met: The loan purpose must be for the purchase of a house or unit for owner occupation only; The security property cannot exceed 2.2ha in area; and Repayments must be on a principal and interest basis, with no interest only terms available. The non-genuine savings contribution may consist of: Gifts, Inheritance, sale of assets, tax refund (Validation must be provided) NB: Borrowers must hold sufficient funds to cover all relevant government fees, duties and charges. The use of borrowed funds from credit providers to pay relevant fees, duties and charges is not acceptable 26

27 Documentation Requirements Validating Purchases and Funds to Complete Contracts for Purchase A fully executed and signed copy of the contract of sale must be obtained. Note: For NSW a copy of the purchaser's signed contract must be obtained, together with a copy of the fully executed front page from the vendor's contract and the 'Special Conditions'. The details recorded on both copies must be identical. Where the borrower is providing funds to complete a property purchase (in addition to the Bank's lending), the source of these funds must be validated. Funds to Complete Property Purchases The validation requirement is only where the customer contributes an amount above $5,000 to the total purchase. Note: If the borrower has already paid a deposit for a property purchase prior to the lending application, the source of this does not need to be validated. External Refinances For external refinances that require LMI and where the LVR is >80% a current rates notice must be provided together with confirmation of rates being paid up to date. Confirmation is via, receipt, bank or credit card statement, or letter from the local government authority. 27

28 Documentation Requirements Verifying Other Commitments Type of Commitments Continuing mortgage, investment loan or personal loan with external institution Validation Method Obtain either of the following: the latest mortgage statement or written confirmation no older than 30 days prior to application date from the external institution showing regular payment or the most recent 3 months savings account statements showing regular mortgage payments (no older than 90 days) Must meet the Valid Account Statements requirements. Rent Obtain either of the following: a current rental agreement, or obtain a written verification of the scheduled rent from the real estate agent Child Support Court Order document or letter from Child Support Agency Board Accept amount advised by customers 28

29 Documentation Requirements Verifying Other Commitments Type of Commitments Validation Method Confirmation letter/invoice or confirm against the bank statements Leases/Asset Finance: Other significant commitments advised by customer Obtain either of the following: Copy of current lease agreement; or Written confirmation via a statement, letter, or amortisation schedule issued by the Lease/Financer provider in the last 30 days confirming repayments; or Confirm against the last 30 day bank transaction statements. Novated Leases: Obtain either of the following: A copy of the novated lease agreement; or HECS/HELP Obtain either of the following: Last two most recent payslips; or Latest Tax Assessment Notice. 29

30 30 Security

31 Security Location Additional Criteria Property Value VMA Metro Plus Postcode list Genworth Security Location Guide: - Category 1 postcode - State/Territory Capital cities only Houses Units & Townhouses Houses Units & Townhouses Max LVR without LMI Up to $3,000,000 80% >$3,000,000 70% Up to $2,000,000 80% >$2,000,000 70% Up to $3,000,000 80% >$3,000,000 70% Up to $1,500,000 80% >$1,500,000 70% Genworth Security Location Guide: - Category 1 postcode - Gold Coast Region only Genworth Security Location Guide: - Category 1 postcode - Regional centres Genworth Security Location Guide: - Category 2 postcode - Regional centres Houses Units & Town houses Houses, Units & Townhouses Houses, Units & Townhouses Up to $2,000,000 80% >$2,000,000 70% Up to $1,500,000 80% >$1,500,000 70% Up to $1,500,000 80% >$1,500,000 70% Up to $750,000 80% >$750,000 70% 31

32 Security (Continued) Location Additional Criteria Property Value Max LVR without LMI Category 3 postcode: - Regional centres Houses, Units & Townhouses Up to $750,000 80% >$750,000 70% All other postcodes: - Properties in postcodes that are not included in the Genworth Security Location Guide Houses, Units & Townhouses Up to $750,000 70% >$750,000 60% Rural zoned properties: - VMA Metro Plus - Category 1, 2 & 3 Houses / Dwellings Up to $750,000 80% >$750,000 70% All other postcodes: - Properties in postcodes that are not included in the Genworth Security Location Guide Houses / Dwellings Up to $750,000 80% >$750,000 60% 32

33 Security (Continued) Security Additional Criteria Property Value Max LVR without LMI High Density Apartments: Unit is located within LMI company Refer to Genworth Security Location Guide. Full Valuation required to confirm property value 80% Owner Occupied lending 70% Investment lending High Density Apartments: Units located within Brisbane location Postcodes: , , & 4169 Full Valuation required to confirm property value 70% LVR without LMI 70% Investment lending 1 Bedroom apartments in High Density postcodes owner occupied and investment properties within the Full Valuation required to confirm property value 70% without LMI. Apartment / Unit - Greater than 40 square metres AND less than 50 square metres Apartment / Unit must be located in a postcode within the Full Valuation required to confirm property value 80% Owner occupied 70% Investment lending Facility Additional Criteria Property Value Max LVR without LMI Refinanced Owner Occupied Loans Residential property only Valuation required to confirm property value 80% without LMI (90% with LMI) Investment Loans Residential Property only Valuation required to confirm property. value 80% without LMI 90% includes capitalisation of LMI 33

34 Established Multiple Units 4 to 6 Loan Purpose Security & Location Ownership or purchase of multiple established residences in one complex (investment purposes only) Established properties only (no development) For 2-3 units VMA Metro Plus, Category 1 and 2 locations (per Genworth Security guide) only. For 4-6 units BOQ Metro Plus, Genworth Category 1 locations only. Maximum of 6 units in one complex (strata title) or 6 units on one title (non strata title) All other existing security requirements as per Home Loan Policy to apply Maximum LVR without LMI For 2-3 units, lower of 80% LVR or max LVR as stated in the policy. LMI - Maximum 6 units. Property Concentration Valuation Requirements A maximum of 6 units in one complex (strata title) A maximum of 6 units on one title (non-strata title) -strata titled units (units on one title) complex 34

35 Security (Continued) Notes in relation to security properties: Rural zoned vacant land is unacceptable security. Primary property purpose must always be as a residence, must be zoned for residential use; and used as a residence by the owner or by a tenant for residential purposes. Maximum property size is 40 hectares (100 acres). Property must be fully developed with road access and services available including electricity, water, (mains, bore and tank only) and sewerage. Income produced from the property must not be the primary source of income to service the debt. Excludes property on islands with the exception of islands connected to the mainland by vehicular bridge, Full valuation required showing sales evidence and the marketing period must be six months or less. Income produced from property must not be the primary source of income to service the debt. 35

36 Property Valuations Only one valuation may be ordered for each security property for any one credit application. Valuation Requirements when taking security Established Dwellings VMA requires a Full Valuation no more than 3 months old for residential property if the application fits any one of the following criteria: Total Aggregate Exposure for the Customer Group is $2m or more; If the postcode of the property is in Category 2, 3 or not in the Genworth Security Location Guide. Loan to Value Ratio (LVR) > 80%; Security property is in a non-residential zone, i.e. Rural Residential >5 acres; Purchase contract is not the result of a sale in the "normal course" with real estate agent involvement. E.g. related private sale; Any postcode in the listing of prescribed "Mining Towns"; Residential units less than 50 square metres in size; Purchase of Vacant Land Other Criteria applies General Requirements VMA reserves the right to order a valuation at any time for any transaction. Virgin Money utilises the following valuation types, AVM's, Desktops, or Full Valuation, subject to acceptable criteria such as property type and attributes, location, and application details. 36

37 Unacceptable Security Unacceptable Security Strata Title Hotel, Motel, Resort style dwellings, Time-share properties that cannot be occupied on a permanent basis; Other properties that have a restricted market appeal e.g. aged care complexes Student accommodation, Boarding Houses/ Shared accommodation dwellings Properties zoned commercial or industrial; Any property that cannot be effectively mortgaged using usual bank security documents e.g. Vic Stratum Security; Unit developments where the development is held as security on one title and the number of dwelling exceeds 3 units; Residential units less than 40sqm; More than 6 units/apartments on one property site, irrespective of whether on one title or on separate strata titles; Mixed use properties on a single title; Convertible units and Dual Key apartments; Studio Apartments; Any property within 50 metres of a high voltage power lines, tower, or electrical substation Company Title, Purple Title (WA) and Moiety Title (SA) Serviced Apartments Second Mortgages Units less than 50 m² Partially Constructed Dwellings Mobile / Temporary Homes Other criteria applies. 37

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