Loan Purpose Verification


Under responsible lending obligations, you’re required to verify your client’s financial situation. Although responsible lending and Best Interests Duty are separate obligations, the information gathered for the purposes of responsible lending may help you to determine what’s in your client’s best interests. 

In addition to the below mandatory requirements, you should also use your judgement to determine if further documentation is required. 

Further, it’s imperative that all information provided is accurate and complete. As per RG273.42, a mortgage broker who provides incomplete or inaccurate information will fail their Best Interests Duty obligation, even if the inaccurate information would increase the likelihood of approval or give the consumer access to better terms.


Customers Purchasing a Property:

  • Fully executed Contract of Sale, AND
  • Evidence of funds to complete, OR
  • Statutory declaration / letter if funds come from a gift


Refinances: 

(existing liabilities being refinanced & existing liabilities being consolidated)

  • Most recent three months’ bank statements 


Construction:

  • Plans and specifications
  • Fixed priced builders’ contract


Guarantors:

  • Security Guarantors
    • Guarantor executed Privacy Consent via one touch privacy or standalone Privacy Disclosure and Consent form
    • Guarantor executed Game Plan
    • If there is a loan on the property, three months’ bank statements showing repayment history
    • Broker notes and discussions with Guarantors
    • Executed Guarantor Acknowledgement
  • Servicing Guarantors
    • Guarantor executed Privacy Consent via one touch privacy or standalone Privacy Disclosure and Consent form
    • Guarantor executed Game Plan
    • LM Supporting Documents minimum requirements (where applicable)
    • Broker notes capturing discussions with Guarantors
    • Executed Guarantor Acknowledgement


Trusts:

  • Trust Deed
  • Accountant Details
  • Last two years ATO tax returns for the Trust AND
  • Corresponding ATO Final Notice of Assessment & Financial statements of the Trust


Documents Sent With Lender Application:

  • Customer signed and dated lender Privacy Consent
  • Serviceability calculator for Loan Market or recommended lender 
  • File notes that capture all interactions with the clients and lender
  • All email communications sent to the lender and customer


Additional documents:

  • Current Medicare Card showing any dependents
  • Copy of superannuation statement (if applicable for exit strategy)
  • Any other documentation provided to the lender as part of the application


If you have any questions, please contact compliance@loanmarket.com.au