LOAN SERVICEABILITY CALCULATOR - Introducer Online

LOAN SERVICEABILITY CALCULATOR

This guide provides a summary of the steps to completing the ING DIRECT loan serviceability calculator. This is not intended as a policy document and brokers should always refer to the Short Form Underwriting Standards (SFUS) available by logging in at introducer..au.

Residential Facility Details

Loan Amount

- Insert total loan amount. - Must include any capitalised LMI premium or REF amount if applicable

Loan Term

- Insert term in whole years as advised in loan application.

- Maximum term is 30 years except for increases / variations where the remaining loan term should apply.

Loan Purpose

- "click" on drop down box - select Owner Occupied or Investment. - If loan is for multiple purposes, the predominant purpose is used, i.e. $100k for Refinance

O/O and $50k investment, the loan will be predominantly Owner Occupied.

? Note - when a loan is for unspecified investment purposes it is to be assessed as owner occupied, not investment. No deductable interest is to be applied.

Payment Type

- Drop down box has 2 options - Principal & Interest (P&I) or Interest Only (I/O). Select one.

? Note - regardless of the Payment Type, Total Assessed Monthly payments are calculated on a P&I basis and is auto populated

Payment Frequency

- Drop down box has 2 options - Monthly or Fortnightly. Select one

Customer Rate

- Insert the actual interest rate to be charged on the loan(s)

ING DIRECT Assessment Rate

- To be the ING DIRECT Assessment Rate which is the Mortgage Simplifier interest rate + 1.50% (regardless of any interest rate discount), except:

? Construction Loan: Construction Loan interest rate + 1.50% p.a.

Total Actual Payment

- This field is auto populated from previous input (will display actual P&I fortnightly or monthly repayment amount)

Total Assessed Monthly Payment - This field is auto populated from previous input

Personal Income - Per Annum

Applicant

- Enter the number of applicants as per the application. Consideration is to be given if applicant has a partner. If a partner is not an applicant, they can be classified as a dependent, or you may exclude them with appropriate comments and evidence of income (e.g. a payslip) and a Privacy declaration.

Everyday Banking Savings Home Loans

Page 1 of 5 ING DIRECT is a division of ING Bank (Australia) Limited | ABN 24 000 893 292 | INGD Serviceability

Base Income Regular Overtime Second Job Income Car Allowance Fully Maintained Car

Other Income Family Tax Benefit Child Maintenance Income Annual Investment Income Bonus/Commission Income Max Allowable Deductible Payments Salary Packaging

Salary Sacrifice

Rental Income

- Enter the applicant's base gross annual income. Refer to SFUS

- Input at 100% of value if evidenced over 2 years. This will be halved unless 100% box is ticked. Refer to SFUS to determine when overtime can be included.

- Income for second job only to be used if employment is over 12 months and consistency of income is verified. Refer to SFUS

- Can be used when evidence is held that an applicant is provided a car allowance (usually found on applicant's payslips). Ensure any matching expense has been included, e.g. lease, rental agreement.

- Can be used when evidence is held that an applicant is provided with a fully maintained - company car, refer to SFUS. (Will not be included if any amount is entered under car

allowance for the applicant)

- Must be a Federal payment for family assistance and does not include any other benefit. Only part A & B of the Family Assistance payment can be used. Refer to SFUS

- Only to be used when conditions in SFUS are met

- Enter additional income received from investments dividends or interest on savings etc. Input 100% of value as calculator will reduce value to 80%. Refer to SFUS

- Input at 100% of value. This will be reduced by half. Refer to SFUS

- Interest component of Investment Loans field is auto populated from prior input.

- The total package excluding the compulsory employer superannuation contributions should be used as the gross income.

- All non-cash components of the package are subject to confirmation via letter from the employer that the borrower has the option to convert these items to cash.

- Some occupations e.g. Clergy, Health, Charity workers can elect to have only a portion of their income "salary sacrificed" i.e. deducted before tax. The "deducted" payments can be allocated for mortgage payments, utility bills or the like.

- If a borrower presents with a portion of their income "salary sacrificed", this portion can be inserted into the Family Tax Benefit field of the servicing calculator so as not to be included in the income to be taxed.

- Care must be taken to obtain employer confirmation of the amount on company letterhead

Existing Proposed

- The lower of the evidenced rental income or a Valuer's market assessment is to be used

- To be used for new rental income from proposed property. The lower of the evidenced rental income and a Valuer's market assessment is to be used. Refer to SFUS

Business Income When Business Income tick box is selected, the following second worksheet will appear.

Everyday Banking Savings Home Loans

Page 2 of 4 ING DIRECT is a division of ING Bank (Australia) Limited | ABN 24 000 893 292 | INGD Serviceability

Company Income Sole Trader/Partnership Income

Averaging of Income Net Income

- Enter the last 2 years net profit before tax (NPBT) figures, which are sourced from the company's financials. Refer to the SFUS for policy details including acceptable `Add Backs' if they are to be used.

- Enter a minimum of the last 2 years financial details or net profit before tax (NPBT) figures which are sourced from the individual / partnership tax returns. Please refer to the SFUS for acceptable `Add Backs' if they are to be used.

Note: Ensure you do not double up on including income that was paid to the applicants as distribution/dividends.

- The calculator will average the 2 years input in the fields above, unless the `most recent year' is less than the `previous year'. In this case, the lesser of the 2 years will be applied.

- This field is auto populated from previous input

Expenses - Per Annum

Number of Applicants

- This field is auto populated from the number of applicants entered and reflects the cost of living

The following fields are to be entered into the top row of each section and the calculator will automatically calculate the correct expense to be used:

Number of Dependants

Total Credit Card Limits Other Bank's Deductible Loan Limits

Other Bank's Non Deductible Loan Limits

Other Financial Commitments Monthly Payments

- Insert number of children of applicant and/or partner living at home, who rely on the applicant's income. If a partner is not an applicant and is not reliant on the applicant's income i.e. has income of their own, do not include them as a dependant. Exclude them and mitigate with approapriate comments in the comment section.

- Total of all credit card limits (bank, credit union, store cards etc) to be included. Refer to SFUS

- The higher of the limit or debt is to be entered only when the existing loan purpose is a `residential investment' mortgage secured loan. ? The ING DIRECT assessment rate is to be input as the interest rate in the `Enter Interest for Other Bank's Debts' field

- The higher of the limit or debt is to be entered only when the existing loan purpose is an `owner occupied / personal use' mortgage secured loan.

Note: Other Bank's Deductible Loan Limits and Other Bank's Non-Deductible Loan Limits fields are not to be used for personal loans, car lease, etc.

- Monthly payments for personal loans, rental expenses, leases, child maintenance, HECS etc. If the applicants declare they are living "Rent Free" a notional amount is to be included. Refer to SFUS for amounts.

Everyday Banking Savings Home Loans

Page 3 of 4 ING DIRECT is a division of ING Bank (Australia) Limited | ABN 24 000 893 292 | INGD Serviceability

Acceptable Serviceability

Serviceability is acceptable if the `surplus / shortfall' box shows a positive figure of at least $1.00 and the servicing ratio at least 1.1

MOST IMPORTANTLY: ADD COMMENTS ON HOW / WHY INCOME AND EXPENSES HAVE BEEN CALCULATED. THIS WILL ASSIST WHEN CHECKING THE FILE FOR COMPLIANCE.

Everyday Banking Savings Home Loans

Page 4 of 4 ING DIRECT is a division of ING Bank (Australia) Limited | ABN 24 000 893 292 | INGD Serviceability

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