5.4 Borrowers

• Natural person (over the age of 18)
• Company
• Trustee of a Trust or
• Trustee/s of a Self Managed Superannuation Fund.

• Limited Liability Companies
• Associations
• Churches
• Clubs
• Minors (persons under the age of 18).

• Borrowers of convenience
• Non-residents.

• As per Standard LMI Product Parameters section 4.1.

• Standard LMI only.

• Limited recourse loan which complies with the relevant legislative requirements (and any associated regulations).

• Maximum 30 years.

• Principal & Interest (P&I)
• Interest-Only (IO)
• IO Converting to P&I within 10 years.

• SMSF Trustee/s, which hold the beneficial interest in the security property, has the right to acquire the property from the Property Trustee, and is permitted to borrow in accordance with the relevant legislative requirements (and any associated regulations).

• Property Trustee/s, which meet the requirements of the relevant legislation (and any associated regulations). Holds the legal interest in the security property on trust for the SMSF.

• In addition to the general requirements regarding the security property described in section 5.8, loans made to SMSF Trustee/s must be secured by a “single asset”comprising a security property on a single title (not two or more separate titles) and the loan must not cover any additional assets purchased at the time of property purchase. This includes furnishings or other items which are not fixtures
• Excludes:
  • Vacant land.

• Loans must be supported by personal guarantee/s for the full amount of the loan from all beneficiaries of the SMSF. Guarantees must be in accordance with the requirements of the relevant legislation and associated regulations.

• Purchase of an investment property plus costs
• Refinance of an existing SMSF loan plus costs
• Excludes:
  • Construction Loans
  • Equity Release/Cash Out or Debt Consolidation
  • Purchase/Refinance of properties occupied by SMSF beneficiaries or related parties
  • Non Arms length transactions
  • Purchases from a related party of the SMSF Trustee/s
  • Purchase or refinance of owner-occupied property
  • Home Improvements
  • Off-the-plan purchase
  • Bridging Finance.

• 80% of rental income from investment properties held by the SMSF
• Income from interest/dividend earning investments to be assessed using a deeming rate of 3% (in some circumstances higher rates may be used in calculating serviceability - Refer to section 6.1.3 Verifying Income for further details)
• Income derived from other assets is to be excluded
• Only mandatory superannuation contributions (currently 9% of superannuable salary) to be included
• Superannuation taxation rules apply
• Negative gearing benefits excluded
• Must allow for on-going expenses associated with running a SMSF
• Loan repayment amount to be calculated on a principal and interest basis.

• Additional Loans/Top Ups
• Substitution of Security.

• SMSF and Property Trust Deeds, guarantees and loan agreement must comply with relevant legislative requirements (and any associated regulations) including those which apply in relation to SMSF borrowing, the giving of security and the appointment of a nominee
• Lender to obtain confirmation that SMSF is in compliance with the relevant legislation and associated regulations at the outset of the loan, which must be evidenced on the loan file
• SMSF Trustee borrowers and guarantors must obtain independent legal and financial advice and proof of such advice must be retained on the loan file
• Lender has verified guarantors financial position as being able to meet the obligations under the guarantee
• Lender to pursue guarantors issuing all notices up to and including the Notice of Demand prior before making LMI claim. Refer to section 8.3.7.1 Recovery from Guarantors for further information.

Note: Genworth will not cover any loss arising from breach of the legislative or regulatory requirements (refer to the terms of the Master Policy Addendum).

• Standard LMI only
• HomeBuyer Plus.

• Must hold a university degree qualification
• Must be employed within an occupation related to the degree qualification
• Graduated within last 5 years
• Minimum salary of $50,000 pa.

• Maximum 40 years.

• 12 months continuous employment in the same industry or
• 6 months with current employer
• Probation and training may contribute to the minimum term in employment.

• Maximum 95% LVR for High Density postcodes 
• Eligible First Home Buyers are acceptable for High Density postcodes (ie developments with over 35 apartments). 

• 80% allowable rental income from properties located in High Density postcodes.

• Must obtain satisfactory written evidence of university degree qualification.

• Standard LMI
• Family Pledge
• HomeBuyer Plus.

• To be eligible for this initiative, the borrower must be eligible for the government's FHOG and this should be indicated in the LMI Proposal form submitted with the proposal.

• Must obtain written evidence of FHOG eligibility.

• Standard LMI only.

• Must be a "High Net Worth Borrower" - Refer to definition in Glossary
• When calculating the net asset position, the inclusion of international assets such as stated real estate and /or investments is permitted
• Where one borrower is a citizen or permanent resident of Australia or New Zealand and the other borrower is a non-resident as per above definition, any proposal will be assessed under Standard LMI Underwriting Policy and not under the Non-Resident policy above
• Non-resident Self-Employed, company or business borrowers are excluded.

• Standard income and employment policies are to apply. Acceptable income evidence must be translated into English and converted into Australian Dollars using the current exchange rate
• A maximum of 90% of overseas income converted to Australian dollars may be used for serviceability purposes.

• Where required, must obtain written evidence that Foreign Investment Review Board approval has been granted.