The National Consumer Credit Protection Act (NCCP) governs consumer credit and specifies lenders and brokers’ requirements under Responsible Lending.
- RG209: Responsible Lending Conduct sets out ASIC’s expectations of us as your brokers.
- Meeting your responsible lending obligations will requires taking three steps:
- Make reasonable inquiries about your requirements and objectives in relation to the credit product you are applying for;
- Make reasonable inquiries about your financial situation (i.e., income and expenses) and take reasonable steps to verify this information, and
- Make a preliminary assessment of the loan’s suitability for the client’s requirements and their ability to make repayments without substantial hardship, prior to submitting the loan to Macquarie for review.
As your accountants we prepare your tax returns, which is the best possible picture an individual can have into your financial affairs. It becomes much easier for us to vouch on your behalf when negotiating a deal with them.
As part of your home loan borrowing paperwork, the bank may require letters from a professional accountant supporting your application. We will not be hesitating supporting your case if we are well versed with your income and expense situation.
Generally, if you require a letter of support for your home loan application, you’d be having to pay a fee to us to do this if we were not the brokers acting on your behalf.
What do the banks expect off mortgage brokers?
- Lenders expect accredited brokers to have robust conversations with their clients as part of their interview and fact-find. This will help us better understand client requirements and objectives as well as their financial and personal circumstances.
- It’s important to make further enquiries into your financial circumstances when needed, and always make note of this in our submissions.
- When considering a client’s requirements and objectives, we expect you to understand why you are seeking particular loan features and outline these as well as the loan purpose (e.g., “to buy an investment property”).
- For older clients, the banks expect you to understand how they plan to service their loan after retirement and ensure that this is appropriate.
- Lenders require us to obtain proof of income.
- Lenders require us to substantiate your living expenses.
As your accountants we understand your money matters more than others can, it is much easier for us to understand your circumstances as opposed to a broker in these circumstances.
Hence, we recommend speaking to us regarding your lending needs.
If you have taken up one of our lending and tax strategy planning services, the above is already been carried out with an in depth analysis into your circumstances and the goals you wish to achieve.