Assess Flashcards
When is an asset considered owned?
When assesssed for the application
Income to be included
Required income – the income the customer relies on to meet all obligations, including the required surplus.
Additional Income – is the income the customer advises they do not rely on to meet obligations, and is:
From secondary employment, business, or investments, and is
Not required to enable the customer to meet the minimum Discounted Cash Surplus, and
Is no greater than 10% of all Income.
Future required income changes
Allow for declared foreseeable changes to income
Required income to increase
Record current income in the assessment - include details of future increased income in application notes if it will be relied on in this assessment (and verify the increase if possible).
Required income to decrease
Within 12 months of drawdown - record decreased income in the assessment - verify the decrease if possible.
More than 12 months after drawdown – record current income in the assessment – include details of future income in application notes including impact on the customers servicing position and the customers intentions to resolve any shortfall.
Verification of income
Income declared is verified with independent evidence
The verification evidence must be the latest available, and at a minimum from the last three months. See table below “Income verification documentation standards”.
Income verification obtained is attached to the lending application in the Lending System (NZLO) or ICE.
If verification is from Westpac systems, there is no requirement to printout and attach a copy- the lender will refer to the evidence obtained from the Westpac system.
Each application must be complete with required documentation attached – it is not sufficient to refer to an earlier application.
Lender CAL applies only when Required Income is verified to the required standard – applications with no or insufficient verification are referred to Credit Officer or OAO for exception approval.
If verified details are different from application details, then update the lending application to the correct amount and provide commentary in the notes. See section “Assessment processing” for reassessment or approval requirements.
Salary and wages - permanent
Assessed at: 100%
One (or more) of the following:
Transaction records (bank statements, transaction lists, categorised income and expenses reports)
Payslips
Employment Contract or letter
Income tax assessments
Salary and wages - casual or Fixed Term Contract
Assessed at 100%
One (or more) of the following:
Transaction records (bank statements, transaction lists, categorised income and expenses reports)
Payslips
Employment Contract or letter
Income tax assessments
Offshore Income
One (or more) of the following:
Transaction records (bank statements, transaction lists, categorised income and expenses reports)
Payslips
Employment Contract or letter
Only Salary and Wage, or Pension income accepted. Enter the NZD equivalent
Offshore Rental income is accepted but must be entered at 75% of the NZD amount. The system will then apply an additional 80% scaling.
Pension / Interest/ Dividends / Directorship / Superannuation / Annuity
Income tax assessment
Includes: returns from managed funds and trust distributions including Private Pensions
See ‘Beneficiary’ for NZ Superannuation / Guaranteed Retirement Income
Dividends relates to income received from listed companies or other investments. Dividends received from the customers own company are included as ‘Business/Self Employed’ below
Business / Self Employed
One (or more) of the following:
Business Financials.
Income tax assessment
Professional Partnership assessment
Includes Contractors who charge employers at a time rate, and earners of just Commission income
Customers who have been self-employed for less than one year are to be referred to Credit Officer or OAO with a copy of their interim financials in all circumstances.
Where the customer’s business is evidenced as making a loss then enter as a negative value.
Beneficiary
One (or more) of the following:
Transaction records (bank statements, transaction lists, categorised income and expenses reports)
Income tax assessments
Letter of entitlement from paying organisation
NZ Government beneficiaries – where there is a confirmation or it is clear that this is a permanent source of income. When unclear, lenders must check with customer that all current income is and in particular any likely changes the next 12 months.
Short-term allowances or subsidies must be excluded.
Includes NZ Superannuation / Guaranteed retirement Income, ACC benefit
Studylink/student allowances are not accepted.
Oranga Tamariki caregiver allowances are not accepted.
Commission
One (or more) of the following:
Income tax assessments
Letter of entitlement from paying organisation
Commission in addition to Salary and Wages.
Income that is made up entirely of commission (e.g real estate agent) falls under the self-employed section.
Rent
One (or more) of the following:
Transaction records (bank statements, transaction lists, categorised income and expenses reports)
Current Tenancy Agreements
Sale and purchase agreement (if rental section completed)
Market rent estimate from Real Estate Agent or Property Manager/Agent
Market median rent estimate from Ministry of Business, Innovation and Employment website https://www.tenancy.govt.nz/rent-bond-and-bills/market-rent/
Income tax assessments
Property Manager Statements
Only acceptable from a property owned by the customer or a related party.
Rent currently being received by the customer in relation to the subject property ranks higher than any estimate provided.
Rental on a room-by-room arrangement or short-term accommodation (e.g Airbnb) will likely be considered as a commercial agreement and fall under Business income. Refer to Credit Officer or OAO in need.
For Offshore Rental income refer Offshore Income above.
For commercial rental/lease income see Business Financials or Income tax assessments.
Overtime / Allowances / Bonus
One (or more) of the following:
Transaction records (bank statements, transaction lists, categorised income and expenses reports)
Payslips
Employment Contract or letter
Income tax assessments
For Bonus income, assess at lower of the latest year or the average of the past 2 years.
Payments that are permanent and ongoing increases to income to recognise work completed/additional responsibility may be included as “Salary and wages - permanent “ with no discount e.g Military Factor, Permanent Unit/Allowance (education sector).
Additional payments that are not permanent are included in this category.
Boarders / Flatmates
One (or more) of the following:
Transaction records (bank statements, transaction lists, categorised income and expenses reports)
Tenancy/Boarding Agreement
Boarder’s letter or agreement advising intention to pay.
Only when is from a property owned by the customer or a related party
LVR ≤80% >80%
Qualifying boarders per property 2 1
Rent currently being received by the customer in relation to the subject property ranks higher than any estimate provided.
Note: After drawdown payments made must be able to be identified in the customers transaction account – this may be reviewed by Assurance
