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CBA.0507.0021.0131 _R
1_onsumer Lending k recut Yoncy kULt;Y) - Uenerai inIOrmation Page 1 of L
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Consumer Lending Credit Policy
Consumer Lending Credit Policy s Home Loan Products s Home Loan/Viridian Line of Credit (VLOC) s Origination ;Credit
assessment s Assessinq capacity to repav ,Commitments k General information
Home Loan/Viridian Line of Credit(VLOC)
General information
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on this page • Business rules Links
Business rules
Commitment refers to the regular repayments and expenses (i.e. money going out) that a customer is required to
maintain. Commitments include:
• The proposed home loan, calculated at the applicable assessment rate plus loan service fee (subject to retirement
age) to determine serviceability
• Existing mortgage facilities with a loading applied to the actual mortgage repayment
• All other existing loans that will not be repaid, with repayments based on principal and interest repayments over the
remaining term
• Any proposed credit card that is requested to be conditionally approved in conjunction with the new home loan
application
• Credit card payments, store card payments and store interest free finance
• Any ongoing rental or board commitments
• Child maintenance / support payments
• HECS / HELP payments.
• Other payments such as for Centrelink debt, ATO debt or other Court ruled debt.
Generally these commitments are made regularly by direct debit or BPay and can be identified by reviewing the
customer's transaction account(s) and income verification documents,
Links
Refer: Source (Branch) - Ongoinq financial commitment
This page was last updated on 27 June 2015. It is maintained by RBS Policv Frameworks team.
© Commonwealth Bank of Australia ABN 48 123 123 124. All information contained on this intranet site is confidential to the
Commonwealth Bank and its employees, Information on this site is not to be communicated or provided to a customer or non
-employee without the express consent of the site administrator.
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http://coinninet.cba/kb/CLCP/liomeloanprodticts/hoineloan-vlocsloriginationlcreditasse... 1/03/2018CBA.0507.0021.0132 _R Consumer Lending Credit Policy (CLCP)- General information Page 2 of 2 http://Commnet.cbalkbICLCP/homeloanproducts/liomeloan-vlocsloriginationlcreditasse... 1/03/2018
CBA.0507.0021.0133 _R
k-onstuner Lenaing ~_reait roncy ~uLLr)- Loinpieting Loan Applications in UilL/U I U rage 1 of L
com'Net
Consumer Lending Credit Policy
Consumer Lendino Credit Pohcv t Home Loan Products s Home Loan/Viridian Line of Credit (VLOC)= Oricimahon ;Credit
assessment s Assessino capacity to reoav 5 Commitments r Completing Loan Applications In CHL/CTU
Home Loan/Viridian Line of Credit (VLOC)
Completing Loan Applications in CHL/CTU
Business rules
It is the lender's responsibility to record all monthly living expense amounts and financial commitments identified and
obtained during the application phase of the home loan process in the appropriate systems. The lender must also review
the relevant accounts/statements for satisfactory conduct.
Third Party Applications - It is the credit officer's responsibility to ensure all expenses and financial commitments are
recorded as advised by the broker or as evidenced in supporting documentation.
This page was last updated on 30 May 2014. It is maintained by RBS Policy Frameworks team.
© Commonwealth Bank of Australia ABN 48 123 123 124. All information contained on this intranet site is confidential to the
Commonwealth Bank and its employees. Information on this site is not to be communicated or provided to a customer or non
-employee without the express consent of the site administrator.
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http://conimnet.ebalkb/CLCP/homeloanproducts/hoineloan-vlocs/origination/creditasse... 1/03/2018CBA.0507.0021.0134 _R Consumer Lending Credit Policy (CLOP)- Completing Loan Applications in CHL/CTU Page 2 of 2 http://commnet.eba/kb/CLCPlliomeloanproductslhomeloan-vlocsloriginatioiilcreditasse... 1/03/2018
CBA.0507.0021.0135 _R
L,onsumer Lenamg Lreait roncy - Lalculating new/existing commitments Page 1 of Z
Consumer Lending Credit Policy
Consumer Lending Credit Policv ~ Home Loan Products 4 Home Loan/Vindian Line of Credit (VLOC1.Origination s Credit
assessment } Assessing capacity to repay ~ Commitments a Calculating new/existing commitments
Home Loan/Viridian Line of Credit (VLOC)
Calculating new/existing commitments
Business rules
• The calculation of loan commitments depends on whether the loan is being originated or whether it is an existing
facility.
• It is imperative when calculating loan commitments that the correct assessment criteria are used. Refer to Calculatinq
new/existing repavment commitments and Serviceability example for the product specific commitment calculations
which must be considered.
This page was last updated on 13 December 2017. It is maintained by RBS Policy Frameworks team.
© Commonwealth Bank of Australia ABN 48 123 123 124. All information contained on this intranet site is confidential to the
Commonwealth Bank and its employees. Information on this site is not to be communicated or provided to a customer or non
-employee without the express consent of the site administrator.
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http://conimnet.cba/kb/CLCP/liomeloanproducts/hoineloan-vlocsloriginationlcreditasse... 1/03/2018CBA.0507.0021.0136 _R Consumer Lending Credit Policy(CLCP)- Calculating new/existing commitments Page 2 of2 http://commnet.cba/kb/CLCP/homeloanproducts/homeloan-vlocs/originatiolVcreditasse... 1/03/2018
CBA.0507.0021.0137 _R
tLonsumer Leming t,reait .Nolicy (I.LUF)- Uonstruction Loans page 1 of 2
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Consumer Lending Credit Policy
Consumer Lendinq Credit Policy ~ Home Loan Products s Home Loan/Viridian Line of Credit (VI.00) i Origination s Credit
assessment i Assessin4 capacity to repay 1 Commitments r Construction Loans
Home Loan/Viridian Line of Credit (VLOC)
Construction Loans
f on this page • Policv
• Business rules •
• E?~?rnple
Links
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Policy
Construction Loans are provided for the construction of a building that meets the residential loan qualification criteria
(i.e. predominantly secured by mortgage over residential property and where the funds are provided for personal use).
Normal credit assessment criteria apply in relation to Capacity to Repay which must be assessed on the total loan
amount expected when construction of the property is completed.
The credit assessment process must include analysis of the cost to construct the residential property to ensure that
there are sufficient funds from the loan proceeds and other sources to complete the property to the standard expected
in accordance with the valuation.
Business rules
Construction of multiple dwellings
Servicing cannot be reliant on the sale of one or more of the constructed dwellings.
Note: Where the proposal is to construct more than one dwelling on the same title, potential subdivision cannot take
place until the construction is complete. Therefore, the proposal should be considered on an 'in one line basis', with the
subdivision ignored for the purposes of the construction and the valuation (Le. we cannot consider the dwellings to be
on separate titles and we cannot consider the potential security value once and if the dwellings are subdivided).
Construction loans in a company/trust (or firm or partnership)
Servicing must be demonstrated using independent and ongoing income (i.e. where the applicant derives their income
from regular salary/employment or business).
Proposed rental income can be considered for servicing purposes but should be supplementary to main income source.
Note: Where the applicant derives their income from property development, the purchase and sale of property and / or
they need to sell a completed dwelling to make the application viable, the proposal is not acceptable as a Home Loan or
Investment Home Loan.
• Construction loans in a company/trust must be completed under a fixed price building contract.
• Servicing must be demonstrated using independent and ongoing income, i.e. where the applicant derives their income
from regular salary/employment or business.
• Proposed rental income can be considered for servicing purposes but should be supplementary to main income
source.
Note
Where the applicant derives their income from property development, the purchase and sale of property and / or
they need to sell a completed dwelling to make the application viable, the proposal is not acceptable as a Home
Loan or Investment Home Loan.
Example
Acceptable Excluded
http://commnet.cba/kb/CLCP/liomeloaiiproducts/homeloan-vlocs/origination/creditasse... 1/03/2018C BA.0507.0021.0138 _R
Consumer Tending Credit Policy(CLCP)- Construction Loans Page 2 of2
Applicant
Director occupation Doctor Engineer/Builder
Income source Medical specialist - income derived Construction / Capital Gains - income derived from
from medical activities construction and sale of dwellings
Purpose/ driver Increase Property Portfolio - Looking Make a profit - Looking to build with a view to
to retain properties and obtain generate short term profit by the safe of one or more
rental income dwellings
Servicing Servicing can be demonstrated Servicing is reliant on business activities and
based on income from medical potentially the sale of constructed dwellings. Earning
practice. Income position will be potential may be impacted by the construction with
enhanced by the constructed sale proceeds and / or rental contributing to business
dwellings income
Links
Refer: iSource (Branch) - Building/Construction loan
This page was last updated on 30 May 2014. It is maintained by RBS Policv Frameworks team.
© Commonwealth Bank of Australia ABN 48 123 123 124. All information contained on this intranet site is confidential to the
Commonwealth Bank and its employees. Information on this site is not to be communicated or provided to a customer or non
-employee without the express consent of the site administrator.
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http://coinninet.cbalkbICLCP/homeloanproductslhomeloan-vlocsloriginationlereditasse... 1/03/2018CBA.0507.0021.0139 _R
Lonsumer Lenaing Lrealt roncy ~t✓LUF) - uverseas Lommitments Page l of l
9CamaNet
Consurner Lending Credit Policy
Consumer Lending Credit Policv s Nome Loan Products i Home Loan/Vindian Line of Credit (VI.00) s Origination s Credit
assessment f Assessinq capacity to repay s Commitments i, Overseas Commitments
Home Loan/Viridian Line of Credit(VLOC)
Overseas Commitments
._...._..._._................ . ._ . . . ......_._..-.._.----.--.......-..-...__-..._.._..-_._..-_.._._....-.......----.----.....
on this page Business rules .inks I
Business rules
• All overseas loan repayments are to be converted to the Australian Dollars(AUD) equivalent.
• The monthly commitment is calculated by dividing the existing repayment by the exchange rate of the currency in
which the loan is held.
• When calculating repayment commitments, special repayments on redraw facilities are to be added back to the
account balance prior to recalculating repayment.
For a line of credit, the credit limit and not the account balance is to be used to calculate repayments.
Where there are loan commitments in a foreign currency, convert this amount to Australian dollars and use the Currencv
Converter located on the Commonwealth Bank website. Adopt the 'I want to Sell Foreign Cash' conversion i.e. 'Bank' is
buying and use this amount in the net servicing calculator. The foreign currency commitment should not be sensitised
when converting to Australian dollars, use 100% of the foreign currency commitment.
Links
Refer: iSource (Branch) - Calculatmq Product Commitment
This page was last updated on 04 August 2017. It is maintained by RBS Policy Frameworks team.
© Commonwealth Bank of Australia ABN 48 123 123 124. All information contained on this Intranet site is confidential to the
Commonwealth Bank and its employees. Information on this site is not to be communicated or provided to a customer or non
-employee without the express consent of the site administrator.
aomrDtlW4A1tA1 RA"i
http://commnet.ebalkbICLCP/hoineloanproductslhomeloan-vlocsloriginationlcreditasse... 1/03/2018CBA.0507.0021.0140 _R Consumer Lending Credit Policy(CLOP)- Overseas Commitments Page 2 of2 http://commnet.ebalkbICLCPlhomeloanproductslhomeloan-vlocsloriginationlcreditasse... 1/03/2018
CBA.0507.0021.0141 _R
wnsuiner i enutng 1.rean roncy k-ommtmients rage I or 2-
? i~orf~Net
Consumer Lending Credit Policy
Consumer Lendino Credit Policy: Home Loan Products:Home Loan/Viridian Line of Credit (VLOC)~ Origination = Credit
as essmenk a Assessing canacity to renav s Commitments z HECS/HELP Commitments
Home Loan/Viridian Line of Credit (VLOC)
HECS/HELP Commitments
Business rules
Higher Education Contribution Scheme (HECS) or Higher Education Loan Programme (HELP)commitments are to be
included in the overall servicing test.
To confirm the repayment rates per annum for HECS or HELP refer to the table in CLCP - HECS/HELP Commitments.
This page was last updated on 13 December 2017. It is maintained by RBS Policy Frameworks team.
© Commonwealth Bank of Australia ABN 48 123 123 124. All information contained on this intranet site is confidential to the
Commonwealth Bank and its employees. Information on this site is not to be communicated or provided to a customer or non
-employee without the express consent of the site administrator.
CamnonweaM Bank
http://commnet.cbalkbICLCP/homeloanproductslhomeloan-vlocs/originatioiilcreditasse... 1/03/2018CBA.0507.0021.0142 _R Consumer Lending Credit Policy (CLCP)- I-IECS/HELP Commitments Page 2 of2 http://commnet.ebalkbICLCP/liomeloaiiproducts/lionieloan-vloesloriginatior lcreditasse... 1/03/2018
CBA.0507.0021.0143 _R
consumer Leming Lrectit coney kULUY)- Uonclitional gitts Page 1 of 2
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Consumer Lending Credit Policy
Consumer Lendrno Credit Policy:Home Loan Products a Home Loan/Viridian Line of Credit (VLOC).Origination 1 Credit
assessment 1 Assessinq capacity to repay y Commitments t Conditional gifts
Home Loan/Viridian Line of Credit (VLOC)
Conditional gifts
I on this page
- - --
13Usiness rules
-- •
I
Business rules
If the gift is conditional, i.e. there are agreed repayment arrangements, it is expected these repayment arrangements
would not commence until the borrowers are in a position to make these additional repayments without impacting their
ability to meet their commitment to the Bank.
If you are aware repayments are to commence when the loan is funded, ensure these repayments are included as
commitments when assessing serviceability.
This page was last updated on 05 January 2016. It is maintained by RBS Policv Frameworks team.
© Commonwealth Bank of Australia ABN 48 123 123 124. All information contained on this intranet site is confidential to the
Commonwealth Bank and its employees. Information on this site is not to be communicated or provided to a customer or non
-employee without the express consent of the site administrator.
O6rA 10uw8AM9Ai*
http://commnet.eba/kb/CLCP/homeloanproducts/honieloan-vlocs/origination/creditasse... 1/03/2018CBA.0507.0021.0144 _R Consumer Lending Credit Policy (CLCP)- Conditional gifts Page 2 of 2 http:/lcommnet.ebalkb/CLCPlhomcloanproductslhomeloan-%,locs/originationICl-editasse... 1/03/2018
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