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AP0800 – Compliance
Mark Huynh
2023-08-14T07:22:40+00:00
Have you ever had any defaults, judgements or legal proceedings recorded against you?
Yes
No
Are all of your current credit commitments up to date?
Yes
No
Are you a tax resident of a foreign country?
Yes
No
Number
(Required)
Please enter a number from
1
to
10
.
On a scale of 1-10 how concerned are you about rising interest rates (1 not concerned, 10 highly concerned)
Number
(Required)
Please enter a number from
1
to
10
.
On a scale of 1-10 how would you rate your current job security (1 not secure, 10 highly secure)
Anticipated changes
Does the applicant plan or anticipate changes (other than retirement) to their future financial circumstances that could ADVERSELY impact their ability to repay the loan?
Yes
No
Retirement planning
Will the applicant reach their planned retirement age during the term of the loan?
Yes
No
Will the applicant's age reach 70 during the term of the loan?
Yes
No
How would the applicant propose to repay the loan?
Repayment of loan prior to retirement
Downsizing of home
Sale of assets
Recurring home from superannuation
Superannuation lump sum following retirement
Income from other investments
Savings
Co-applicant's income
Reducing loan term
Other
Applicant declared purpose
Risks
I have discussed that the goods being financed / refinanced may not hold their value for as long as the remaining term of the loan and so the applicant(s) may be paying for those goods beyond their useful lifespan and value. Additionally, I have discussed that the applicant(s) may not be in a position to finance the replacement of those goods if the term exceeds the lifespan of the original goods.
I have discussed with the applicant(s) that they may end up paying more interest compared to taking the loan over a shorter term more in line with the useful life of the goods.
I have discussed with the applicant the option of a separate loan with a shorter term for the part of the loan required for the purpose of the goods.
Will existing credit card limits be reduced or cancelled?
Yes
No
Risks
I have discussed with the applicant(s) that they may end up paying more interest, particularly if the applicant(s) incurs further credit card, personal loan or car loan debt after consolidating existing debts.
Refinance and debt consolidation
What are the reason(s) for the applicant(s) wanting to refinance the existing loan?
Reduced repayments
Low interest rate
Increase total loan amount
Greater flexibility/extra or specific loan features under new loan
Wants to reduce number of lenders/ consolidate debt
Dissatisfied with other financial institution
Close to end of loan term
Other
Risks
If refinancing or debt consolidation increases the term of the loan, this may cause the applicant(s) to pay more interest and mean the applicant(s)'s equity in the property builds up at a slower rate
Rate Type
Which product rate type is most important to the applicant(s)?
Fixed
Variable
Fixed and variable
Variable rate
Interest charged and repayments will change to reflect interest rate movements
Why is variable rate important to the applicant(s)?
To take advantage of potential future decreases in the interest rate
Flexibility with respect to repayment, redraw and/or early repayment of loan
Other
Risks
Interest rate and repayment amount may increase while the loan is on a variable rate
Repayment type
Principal and interest
Repayments cover loan principal and interest so that the loan is paid in full by the end of the loan term
Applicant(s) could pay less interest over the life of the loan as compared with a loan which features a period of interest only repayments
Interest rates on principal and interest repayments are generally lower than interest only
Preferred repayment frequency?
Monthly
Why is principal and interest important to the applicant(s)?
Minimize interest rate paid over life of loan
Higher lending limit
Lower deposit required
Build up equity from the start
Other
Interest only
Allows smaller repayments during the interest only period enabling:
Higher cash on hand for other purposes
Flexibility to manage cash flow
Smaller initial payments on investment home loans may serve a tax purpose
Product features
Offset account
Allows applicant(s) to link a savings account in their name to a loan account to reduce amount of interest payable under loan
Will only be of benefit where the applicant expects to have sufficient funds in the offset account so that the interest savings on the loan will exceed additional costs related to the offset account
Why is having an offset account important to the applicant(s)?
Allow paying off loan sooner
Allow acesses to funds
For tax purposes(no tax advice is being given)
Other
Risks
Feature may not be available when the loan is on a fixed rate
May only be a partial interest rate offset
Fees may apply
Explain any different risks applicable to specific lender products, including a higher interest rate on the loan
Redraw feature
Allows applicant(s) to access extra repayments that they made additional to their required minimum repayments
Why is having a redraw account important to the applicant(s)?
Flexibility to access prepaid funds if needed
Other
Risks
Lender may charge fees for each redraw
Each redraw may be subject to the lender's discretion
Other
Do the applicant(s) have any other requirements and objectives not already stated which may affect whether the loan is suitable, including whether there are any particular personal circumstances of the applicant(s) not documented in any previous responses in this interview guide that are relevant to the loan features that have been identified as 'Important'?
Yes
No
Conflicts
Are there any conflicts between any of the loan features selected in the application?
Yes
No
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