Develop and Nurture Relationships with Clients, Other Professionals and Third Party Referrers

This document discusses the importance of developing and nurturing relationships with clients, other professionals, and third party referrers in the finance and mortgage broking industry. It covers topics such as professionalism, code of ethics, and building business networks. The document also provides insights into the role of mortgage brokers and the need for cultural sensitivity in communication. It is a valuable resource for individuals working in the finance and mortgage broking field.

Finance and Mortgage
Broking

Contents
Task 5:.......................................................................................................................................... 3
Task 6:.......................................................................................................................................... 6
Task 7:.......................................................................................................................................... 9
Task 8:........................................................................................................................................ 19

Task 5:
Develop and Nurture Relationships with Clients, Other Professionals and
Third Party Referrers
5 Develop
professional
business
relationships
David Maistre has defined professionalism as an ‘‘… an unqualified dedication to
excellence in serving clients and their needs.’ This has important implications for
how client relationships are established and maintained.
Mortgage brokers are also able to develop and benefit from relationships with
other brokers because their main competition is not with each other. Rather, it is
the banks and other financial institutions.
Networking within the industry is therefore important.
Meeting other mortgage brokers requires much the same techniques as meeting
clients, other professionals and third party referrers. The relationship depends on
the development of rapport and the ability to contribute to the relationship in key
knowledge areas.
(a) What needs to be demonstrated at the outset in a client relationship? When is appropriate to
demonstrate competence?
No. Mark
1. Assess your needs- The broker analyses the financial condition and determines
the loan value and the kind of loan service tailored to long-term goals. A dealer can
evaluate the modifiability ability by means of different situational analyzes.
Recommend mortgage products- Once you evaluate your financial and social
condition, a broker will sell you the correct things for home loans that reflect your
priorities.
Negotiate on your behalf- The right quality and convenient features for the
highest bid can be sought based on the broker's loan range and company
networking.
/1
2. Taking time to know the consumer is an vital first move in a positive customer
experience. It is a good starting point. Initially, many discussions with the client and
other related personnel in the company will occur and work will also be done.
/1
(b) Imagine that you are explaining the function of mortgage broking to a client. What words
would you use?
Mark
A mortgage broker's main roles may be defined as:
• Finalization of loan compliance.
• Application and wait for acceptance of a loan application to the government.
If compensation is charged to the Participant, the Individual will make that reality clear to
the Consumer and: • Person's name (committee is payable)• Individual's name
/2

(compensation is payable)• Obligation number• Insurance policy sum payable.
(c) Explain the importance of a code of ethics in the relationship between a professional and
clients.
Mark
 Ensure conformity with the applicable regulatory requirements.
• implement the sufficient preparation requirements.
• establish reasonable liability insurance.
• coordinate effective customer financing.
/2
Sub-total /6
Continued
(d) Drawing on your own experience or the experience of a more experienced colleague or
manager, describe a situation where a need was identified to use language and concepts
appropriate to cultural differences. How was the need met?
No.
1. The semi-verbal communication regulations are generally understood in a
particular culture but vary in society, traditions and gender. Especially relevant
are the laws on private property. Seek to grasp the cultural variations you deal
around.
/1
2. Remove insufficient or unrestricted connection to a person's culture, etc.' The new
person who begins work next weeks is, for example, a woman called Sandhya
Uprety. She's an English-Indian.
/1
Sub-total /2
Continued

Task 5: Develop and Nurture Relationships with Clients, Other
Professionals and Third Party Referrers Continued
5.1 Build and
maintain
business
networks and
relationships
For a relationship with a client to continue, they need an assurance of continuing
mutual benefit. The continuing mutual benefit is also important in relationships
with other professionals, including relationships with ‘outsiders’ such as
accountants, real estate agents and other professionals.
(a) List two others type of professional your organization uses to develop client
relationships and indicate in each case how it is able to provide them with a benefit in
the relationship.
No.
1. It can also be hard to remember that we are not a justification for all knowledge
and direction. However, competent people like: • Accountants• Lawyer
/1
2. They let clients know whether they will look at a topic and offer customers
greater expertise whether needed. Capital creditors are something they should
learn to do when they are qualified. It is a matter of customer behavior, and it is
the care duty.
/1
(b) Surveys indicated that two-way dialogue, or ‘conversation’ is of overriding importance in
developing client relationships, relationships with colleagues and also other professional
relationships. List four characteristics of this process.
No. Mark
1. Through addressing consumers directly, a stronger relationship can be made. /1
2. Enables customer service to be enhanced. /1
3. Provides a market awareness system for consumers. /1
4. Let consumers know they are viewed. /1
(c) Other professionals that a mortgage broker might forms contacts with are referred to in
marketing literature as ‘Centres of Influence’ (COI). Why does David Maistre place them in
his ‘second tier’ in order of effectiveness. What activities in David Maistre’s first tier does your
organization engage in.
No. Mark
1. One thing that is interesting to remember is that clients who are very happy often
want to find a way to support social and family connections. Requests for
information do more than easily. This helps you to proceed.
/1
2. By seem to have the interest, which is important technological efficiency, when
engaging with great customers. You are most likely to establish "interaction"
/1

partnerships with consumers–a lengthy-term intimate friendship. The "plot" of the
perfect buyer is therefore the foundation of a marketing campaign that targets and
retains more consumers.
Sub-total /8
Continued
(d) List four occupations and professionals that may become Centres of Influence.for your
organisation.
Mark
Solicitors
Conveyancers
Agency of credit report
Land office
/1
Sub-total / 1
Total /17
Task 6:
Promoting the Effective Use of Credit
Read the following scenario then answer the questions that follow.
Roslyn qualified as a schoolteacher some years ago, but failed to take up a teaching position
after graduating because she became a single mother. Fortunately, she has been able to live with
her widowed mother, but now that her daughter has reached school she is taking up a position as
a schoolteacher some suburbs away.
Because of the distance of her new school from her parent’s home she will need to buy a car.
After careful consideration, she has chosen a small hatchback that has an on-road cost of
$15,800.
She will be working full time with a starting salary of $50,000.
She knows little about finance and has come to you for advice. She would prefer to finance the
full cost of the car because she has little in savings.
Task 6.1.

(i) Suggest two financing options that Roslyn might consider.
(ii) Explain the main features of each.
(iii)Choose one of these options and explain your choice. Are there any disadvantages that need
to be considered?
No. Mark
1. Personal loan and hire purchasing /1
2. Auto transactions are typically carried out with guaranteed personal loans, which
can be used to repay the debt for both vehicles. The interest rate on personal loans
is usually lower.
Commercial rent exchanges are a form of trade funding for goods like motor
vehicles that quickly depreciate. The borrower will only be in a position in the
medium and long term to obtain the product financed in the last five years of the
CHP.
/2
3. Throughout this scenario, I would encourage Roslyn to apply for a covered bank
loan. First of all, a covered bank loan may be provided with the deduction after
authorization. Moreover, reimbursed loans have lower rates in particular. If Natalie
will not settle for the property under insurance, a borrower buys the property by
obtaining a discretionary loan for cash compensation to sell the house. The debt
differential would be charged if the items are purchased for less.
/2
Sub-total /5
Continued

Task 6: Promoting the Effective Use of Credit Continued
Task 6.2.
Write a letter to Roslyn letting her know about your preferred, explain how she will make
payments and giving your reasons for choosing it as the option more clearly meeting her needs.
You should take care to proofread your letter.
Mark
Dear Roslyn,
I said that the Westpac Car loan would be her best product. Although separate loans are
available, it's better for her. The fees are as follows:
 $ 250 (Establishment fee)
 $10 (Month basis)
 9.9% rate of interest with 11.34% comparison rate
A equivalent rate includes interest and other expenses, as per the NCC lenders. This
rate is being used to test the goods of various banks. The local fines and costs are not
included in service fees.
Between thousands of things, one can select. Therefore, NCC requires all payment
providers to provide the official benchmark rating to help customers compare different
goods. The complex pricing structure of these goods is difficult to understand. In order to
include pricing for its lending offerings to help prospective mortgage borrowers recognize
how much they owe for their lending, it is expected to provide a comparison rate through
credit providers. The comparison figure shall follow a basic formula which shall take
account of the volume of loans, inflation, length of loans, the figure of repayment and the
expense of loan services. The mortgage interest rate may, for example, be 5.5 percent
for housing loans. The comparison rate can shift a two-price perspective. For instance,
hypothecary levels for Hypothecs A and B are 6%. Mortgage A's fees & taxation are
0.5% similar to Loan B's 0.1%. That implies that the disparity between mortgage A's
6.5% and B's 6.1% is greater. Loan B is the lowest of the two.
/4
Task 6.3.
Roslyn is concerned that the lender will apply for a credit report. Explain:
(i) The procedure and cost involved in obtaining a copy of her credit file.
(ii) The right of a lender to access credit report information.
No. Mark
1. Three big debt recovery firms currently operate on the Aussie sector. These include
Veda Benefit, Dun and Bradstreet and Tasmania's selection operation.
/2
2. The specifics of credit agencies, such as Veda Vermeil, have major implications for
creditors. A weak history of loans may result in loans being dismissed. All
consumers, particularly those with limited financial awareness, must disclose the
potential implications of paying interest on transaction agreements.
The UK government has now decided that the proposed regulatory system for
consumer loans services would have accountable borrowing obligations. It must
demand that lenders: • repay to a borrower who can make payments, without
significant problems.
/2
Task 6.4.

Further information
Roslyn mentions that her mother’s washing machine has broken, and she urgently needs a
replacement washing machine. The cost is less than a thousand dollars and she plans to use her
credit card for the purchase. She tells you that she will make the minimum required repayment per
month until she pays the machine off.
Sub-total /10
Task 7:
Prepare a loan application on behalf of mortgage broking clients
Case Study — Evaluating and processing a loan application
Read the following case study then answer the questions that follow.
Ross and Melissa Cooper are a young couple who have been married for five years, during which
they have been renting an apartment while saving to buy an apartment of their own. They do not
have any children at this stage.
After some months searching, they have found a small two-bedroom apartment that suits their
needs. The purchase cost of the property is $480,000, and they have provided a deposit of
$60,000. You are recommending a standard variable loan.
Ross has been working at Gaines Consulting Pty Ltd. for 12 years and has a salary of $80,000.
Melissa has been working at Jackson Equipment Hire Pty Ltd for 8 years and has a salary of
$70,000. Neither has had previous employment, apart from casual work when they were younger.
The full details of Ross and Melissa that you have collected are as follows:
Applicant 1 Applicant 2
Loan purpose Purchase home (owner occupied)
Amount and type of loan sought $480,000 standard variable rate
Deposit $60,000
Address Unit 2, 27 High St.,
Mackville, NSW. 2080
Unit 2, 27 High St.,
Mackville, NSW. 2080
Status Renting Renting
Years there 5 years 5 years
Contact details Phone (W)
Phone (H)
02 9200 1111 (w)
02 9400 9900 (h)
02 9310 2000(w)
02 9400 9900 (h)
Mobile [phone] 960 000
Email [e-mail] [e-mail]
Number of dependants Nil Nil

Employment Gaines Consulting Pty. Ltd Jackson Equipment Hire Pty Ltd
How long? 12 years 8 years
Gross income ( p.a.) $80,000 p.a. $70,000 p.a.
Credit history Personal loan to purchase a car — since
repaid.
Personal credit card with Central Bank with
a limit of $3,000. Current balance: $300
Note: All credit cards are repaid in full when
due.
Personal credit card with Northern with a
limit of $2,000. Current balance: $300
Store card with Wilson’s Department Store.
Current balance: S250
Note: All credit cards are repaid in full when
due.
ASSETS AND LIABILITIES
Assets Liabilities
Details Market value Details Monthly
payments
Amount owing
Cash at bank $15,000 Credit card limit:
$2,000
$2,000 $300
Deposit paid on
property
$60,000 Credit card limit:
$3,000
$3,000 $300
Motor vehicles:
1.
2.
$15,000
$7,000
Other:
Personal effects $30,000
Business value Nil
Total assets $127,000 Total liabilities $600
Surplus/deficiency: $126,400
OTHER DETAILS:
They are seeking a loan term of 25 years. Other requirements are:
 proposed settlement date — 6 weeks time
 ability to make additional payments from time to time without penalty
 monthly repayments
 redraw facility.
The applicants will have no other financial commitments other than their monthly mortgage
commitments, rates and utility costs and strata fees.
The current variable home loan rate is 6% pa.
Note: For the purposes of this assignment, any first home purchase assistance should be
ignored.
OTHER INFORMATION

APRA is concerned that interest rates may rise and because of this it is requiring all lenders to
“stress test” all housing loans at a borrowing rate of 7% p.a.
Task 7.1.
Apart from requiring the presentation of a Credit Guide, the NCCP Act says nothing about what a
mortgage broker should say about him/herself at the beginning of a client interview. In the space
below, make a few brief points about what you would say about yourself and your firm at this
stage. Remember that at the outside the client is primarily looking for assurance that the broker is
concerned about them and their interests.
Mark
They guarantee you that all details given in the application for a loan is accurate and
honest. Their creditworthiness is sufficient for repaying the loan together with tax
obligations. Nonetheless, we must co-operate with banking in event of bankruptcy and
non-repayment to help recover the loan balance
/2
Task 7.2.
List in point form the important information a Credit Guide conveys to the credit applicant.
Mark
Licensee's name and phone numbers:
 Licensee's ACL number
 Volume of loan payments
 Details on pattern six lenders checked by the license holder to consumers
 Data on trend six lenders, which is assessed by the payment rep to clients.
 Quantity of commission to have been earned by the person\
 If the Licensee seems to have a quantity compensation contract with the lender,
the statement that the lender's payment would be depending on the volume
indicated as well as the charge might be supported by volume
 Percentage of commission to be earned by the third party to introduce the client to
the license holder
 Documents of the IDRS and EDRS licensee
 Key appraisal material
/3

 For loan managers, a summary of the loan management relationship with the
applicant, together with any payments that perhaps the MM specifically charges
the applicant for the commodity.
Task 7.3.
Under the Anti-money Laundering and Counter-terrorism Financing Act 2006 (AML/CTF Act),
mortgage brokers are required to establish the identity of their clients. To do this they must cite
original copies of at least three primary documents and one secondary document. List three
primary documents and one secondary document below.
Mark
 Primary Document:
 Passport
 Bank Card
 Driver License
 Secondary Document:
 Birth Certificate
/3
Sub-total /8
Continued
Task 7.4.
Mortgage brokers should present adequate information to clients to enable them to make a
choice between loans. This involves conducting research to determine suitable loans and
presenting clients with a choice among, say, three loans that are considered to be suitable for the
client’s requirements. The characteristics of the three selected loans are then presented to clients
in a way that allows a comparison to be made. The presentation may be made a piece of paper,
or other means such as a Powerpoint overhead.
You are now required to use the internet or other sources to choose three loans that you believe
will meet the requirements of Ross and Melissa. The relevant details should be placed in the
spaces provided.
Mark
Credit Provider /6
Product Name Home Loan
Interest Rate Type (%) 6.00%
Comparison Rate (%) 7.00%
Minimum Loan Amount ($) $480000

Maximum Loan Amount ($) $420000
Minimum Loan Term 30 years
Maximum Loan Term 25 years
Maximum LVR (%) 100.00%
Maximum Insured LVR (%) 100.00%
Mortgage Offset Account
(Yes/No) No
Loan Redraw Facility (Y/N) Yes
Split Loan Facility (Y/N) Yes
Fixed Interest Option (Y/N) Yes
Task 7.5 (a)
Explain significant features of the loan products that you have chosen in words that the client
would understand. Your answer should be restricted to features relevant to the clients.
Mark
Property loans are allocated regardless of market significance, typically by the worth of the
financial services or the house registration. The purchasing of numerous home loans at
the lowest price about the specifications and easy finance will meet any need for
respective apartment. Unique Features of house loan:
 Purpose: To purchase the property from the owner purchasing it and construct a
new home.
 Loan amount: They will take home loans around $150,000 and $1500,000
depending on your expertise, salary and recovery potential..
 Security: Building loan is a covered, unconditional loan.
 Loan tenor: maximum loan tenure is 25 years.
Organizations concur on eligibility and evaluate loan balances in due course, based on
individual ability to pay. Salaries can enhance their entitlement by proposing their
success-related income or incentives by giving up your outstanding debts, by expanding
your repayment period. Clubbing their parent's wealth enhances their ability to obtain a
home loan.
/2
Sub-total /8
Continued
Task 7.5 (b)
Credit providers always have other fees and charges beyond their stated interest rates. Select
one of the loans you have set out in Task 7.4 as the one preferred by Ross and Melinda, and
explain any additional fees and charges in a manner that your clients can understand.

Mark
Interest levels, which may vary from and compete with various institutions and are a
significant consideration in determining EMI. Various alternatives such as set and flexible
interest rates are often pursued with a systematic and thorough analysis. Even if they
are selling the same mortgage to different institutions, so you can do the math to
determine what is best at another per cent. Below are some increased home loan fees
and taxes, as pursues:
 Loan Processing Fees: That is a cost levied now the loan is made just like a
collateral payment it can differ with the sum of the mortgage.
 Home loan exit fees: Consumer will be accountable for withdrawal charges on
loan if the borrower had used home loan before 01/07/2011. Mortgage loan would
be responsible for such surcharge later at the particular deadline.
 Home loan early exit-fees: Such payments are also referred to as termination
fees, official release fees, deferred processing fees or deferred set-up fees. This
tax will be imposed if consumers allow maximum payment on their home mortgage
during a fixed duration such as the first five years.
 Home loan discharge fees: It is often referred to as redemption payments or
arbitration costs paid until the borrower completely pays the imaginary mortgage.
/2
Task 7.6
It is important to verify the information that you obtain from clients, particularly information that
relates to income. List the documents that you should ask for and then examine to verify the
incomes of Ross and Melissa.
Mark
 Income Tax return of most recent three years
 Bank statements to verify the incomes
 Credit Report
 Past loan history
/3
Task 7.7
In dealing with clients, it is important to explain technical concepts in ‘plain English’ so that they
understand them. In the first two spaces below, explain the terms ‘LVR’ and ‘insured’ LVR’ in
terms that that your clients will understand. Then, in the third space, explain how Lender’s
Mortgage Insurance is normally paid, once again expressing yourself in a way that the clients are
likely to understand.
No. Mark
1. LVR: Loan to Value Ratio, is basically also known as' LTV,'
It is an amount of a borrowing from the borrower, defined as a certain percentage
(percent) of the overall valuation of the whole property used as collateral protection
for loan. Creditors or banks rely heavily on LVR while contemplating applying for
loans. A smaller LVR points greater danger to bank.
/1
2. Insured LVR: The reimbursed value of the property is considered in Insured LVR,
rather than the complete value of the property. Some banks also recommend this,
because of their internal rules, while evaluating suitability for loans.
/1
3. Loan premium rate is due whether the LVR level on low-documentation loans is
greater than 80 percent, or higher than 60 percent. Non-bank financial companies,
though, receive mortgages for a loan before considering LVR.
/1
Task 7.8

Mortgage brokers assist their clients to complete their preferred lender’s credit application form,
as well as applications for the First Home Buyer’s Grant and (where applicable) stamp duty
exemption. Examples of these forms are set out over the following pages and you are required to
complete them on behalf of Ross and Melissa. In this case, please fill in our sample of ANZ
application form. Treat these buyers as first home buyers and treat this property as a new
property, for the purpose to get use to filling FHOG and Exemption forms. Remember that each
form must be signed by the client, so facsimile signatures must be attached
Mark
The forms for the following pages can be found at:
https://www.homeloanexperts.com.au/wp-content/uploads/2016/05/ANZ-Loan-application-
cover-sheet.pdf
https://www.revenue.nsw.gov.au/help-centre/resources-library/072017-ofh001.pdf
(application form only)
https://www.revenue.nsw.gov.au/help-centre/resources-library/oda066.pdf ((application
form only)
/15
Sub-total /23
Continued
Task 7: Prepare a Loan Application on Behalf of Mortgage Broking
Clients Continued
Task 7.9.
It is important to keep clients informed about the steps involved in the credit approval process.
Indicate how your organization keeps your client informed as the loan application proceeds. What
are the likely normal time intervals for each step that you explain to your clients.
No. Mark
1. Loan Application 1 day
Conditional approval or pre-approval 1 day
Property valuation 1 week
Unconditional approval or formal
approval
2-3 days
Loan offer issued 4-5 days
Settlement 1-2 days
/2
Task 7.10
Assess the loan application of Ross and Melissa Cooper against the five C’s.
a) Character
How would you assess the applicants’ character?
Mark
Loan background history analysis, will be reviewed for character lender appraisal of
borrowers. This article also includes fraud and liabilities figures and retains most evidence
for 7 to 10 years. In the case of further evaluating a lender's vulnerability when issuing
additional debt approval, the creditor should also review details on the lien and decisions,
/2

such as LexisNexis RiskViews
b) Capacity
(i) What will the applicants’ monthly payment be, given the current variable lending rate of
6% p.a.? (Hint: visit a website such as: http://www.yourmortgage.com.au/calculators/).
(ii) Using the ‘income percentage method’, assess the applicants’ capacity to repay the loan
(25 words)
No. Mark
1. Loan amount: $4,800,000
Annual interest rate: 6%
Loan term: 30 years
Monthly repayment: $28,778.43
Total loan repayments: $10,360,233.07
Total interest paid: $5,560,233.07
/1
2. Current Credit card expenses: $ 2000 + $ 3000 = $ 5000
Income of both: $ 150000 per year
Ross and Melissa Cooper funding potential by profit proportion form is: $990,400.
/1
Sub-total / 6
Continued
c) Capital
(i) How would you verify the equity the applicants intend to contribute to the purchase?
(ii) What should you be careful about regarding this contribution? (50 words)
No. Mark
1. Through valuing resources through professionals and analyzing the past of the
financial account.
/1
2. Thus, lender will be suspicious of any fake intervention and misleading assertion.
The appraisal report requested by the claimant will always be checked to prevent
the connection to fraud.
/1
d) Collateral
(i) Assuming the valuation placed on the property is $480,000, calculate the loan to valuation
ratio (LVR).
(ii)Given the LVR that you have calculated, what steps might the bank take to protect
its position? (25 words)
No. Mark
1. Loan Amount: $480000
Property Value: $480000
Thus LVR would be: ($480000/$480000*100): 100%
/1
2. Since LVR is above 80 percent, the bank must acquire the candidate's monthly
payments.
/1

e) Conditions
Using the information that has been presented, identify any ‘conditions’ that might impact on
this loan application. How should they be handled?
Mark
Conditions:
• The real usage of the borrowing sum would be for the intent of loaning.
• All the evidence and details that the claimant has received are valid.
• Borrower did not hide related lender details.
Lender will take formal pledge from borrower to address these circumstances. They will
also analyze these circumstances with the aid of professionals such as bookkeeps and
accountants.
/2
Task 7.11
What is your organization’s policy about notifying applicants of the outcome of their application?
Mark
The company, by submitting a written note, notifies candidates of the results of their
submission in person.
/2
Sub-total /8
Continued
Task 7.12
The credit application that is forwarded to the credit provider is accompanied by supporting
documentation used to verify the information concerning the financial position of the client.
List six types of document that are likely to be forwarded. In the case of Ross and Melissa
Cooper.
No. Mark
1. Proof of Identification and Residence. /1
2. Statement of Financial Assets and Liabilities /1
3 Employer's pay receipt for the past 3 months /1
4. Advance Payment Cheque: A cancelled audit that aids with validating Ross and
Melissa's bank statements.
/1
5. Document number 16 displaying the IT Returns over the past two financial years. /1
6. Letter Distribution by the accountable Government or Housing Council. /1
Task 7.13
What should be the rules regarding access to client files?
Mark
A person who is a Housing Broker / Founder or Financial Dealer intend to hold such
accounting reports as properly recorded at all times (unless otherwise allowed by statute
in a particular case). It also justifies on a daily basis the prosecution involving the
exchange rate justifiable and even included by the Advocate on estate for a buyer or any
/2

private individual register (other than a consumer).
Task 7.14
There are times that you might suggest to clients that they should have a fixed interest
loan for a period. Explain why you would do this.
Mark
The advantage of a term deposits loan seems to be that people will still have the
option of a debt repayment, and would make payments quickly. When the market
conditions indicate that the lowered interest levels are going to climb, that is the
safest option for a borrower to start being ensured Ross and Melissa will afford to
pay a smaller price as interest. Therefore it may be seen that for such a set
monthly amount, while participants are very vigilant about financial control and
choose to monitor the repayment plan. They are much more involved in that kind
of rate of interest, as it provides a considerable degree of assurance.
/1
Task 7.15
List the information you should include on a client file.
Mark
This is the broker's job to provide the specifics and structured details on the
customer or group file that aid in quickly securing the loan sum throughout the
whole Home mortgage cycle. This detail applies more to:
 All formal papers of the involved party that wants to buy the land.
 Approved Land valuation paper.
 The premises must have a Certification of No opposition.
/2

Task 8:
Steps Taken by the Credit Provider
8 Build and
maintain
business
networks and
relationships
As indicated, the process of interviewing a client, carrying out a preliminary
assessment, and forwarding a credit application to a credit provider should take
no longer than two days. The credit provider’s task, however, is more involved
and takes longer because there are more matters to consider than the final
assessment, which is normally carried out soon after the credit application has
been received from the mortgage broker.
These matters include having the security valued and negotiating any additional
support, checking all details, preparing an offer letter, preparing security
documentation, having the loan documentation signed, attending settlement,
registering the mortgage and having the mortgage documents stamped.
The offer letter is in fact the loan contract the mortgage broker becomes involved
once again – to check that the requirements of the loan purpose are met and to
ensure that the client understands all terms and conditions.
Task 8.1.
The final assessment of the credit application is carried out by an officer of the credit provider, or
at a higher level if that officer’s authority is exceeded. What is that officer’s responsibility in
terms of the NCCP Act.
Mark
 When important requests are made and reasonable steps are done to gather the
facts, a payment-assisting firm may make a' temporary decision' as to whether client's
arrangement or changes to the customer's agreement were not inappropriate.
 In particular, after applying the necessary inquiries and taking the accurate measures
to validate the evidence, which supports the final decision in the sense of whether the
customer contract or some alteration to the consumer contract is inappropriate.
/2
Task 8.2.
Give examples of the information that the mortgage broker may be asked to obtain at the time of
the final assessment.
Mark
There are other crucial facts that the financial adviser requires for their stakeholders at
the point of final review, that deals with the loan condition in a simple phase. Likewise:
 Income and employment proof
 Account statements, and transaction withdrawals and investment management
 Monthly debt payments and Real estate debt
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Task 8.3.
Sometimes additional support, such as a third party guarantee is required in housing loans.
Indicate when such support may be required and the matters about which the credit provider
should seek to be satisfied. How is the required evidence about those matters normally obtained?
No. Mark
1. In which the creditor becomes unable to service the debt throughout the past then
the company or any credit company may not provide the relevant company or
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person with some kind of financial assistance or debt. In that, circumstance bower
is capable of representing a trustworthy pledge that will satisfy the loan's
constitutional necessity.
2. The primary borrower's financial statements are placed under assessment, and
then perhaps the credit company demands extra third party assurance assistance.
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3. In a case where borrower needs to start a company that involves legal license
then credit supplier demands help from the authorities.
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Sub-total /7
Continued
Task 8.4.
Distinguish between the credit provider’s final assessment and the credit review carried out by
the credit provider?
Mark
Credit provider’s final assessment Credit review carried
A financial firm has an intrinsic
obligation when determining the
suitability of a possible loan or debt
agreement outside the relevant
demands that a financial assisting
provider can produce. They agree that
only a payment company can measure
the customer's willingness to meet the
loan or monthly income it proposes
providing.
This is also defined as financial monitoring
and analysis to assess the debtor's credit
history over a particular period. Whenever
an person or company decides to obtain a
loan then settlement agencies, credit agent
and lawyers administer collateral analysis
to test, if they are qualified for the
mortgage to making the payments on
negotiated schedule.
The obligation is to put on the
payment processor to carry out these
inquiries as proofs of its "full
appraisal" is of particular
importance in which the original
details provided by the credit help
firm while assessing the applicant is:
 equivocal
 not verified
 Internally inconsistent to several
information which must be
The main objective of conducting
review for the creditor institution are:
 A sound financial context and a
structured cost of capital are
needed to determine the
prospective mortgage bower.
 To determine the whole financial
background of a potential
creditor.
 Most necessary is to report all of
the unfavourable historical
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submitted to the payment processor
where the transaction terms or any
other information supplied render it
constitutional.
reports that may be a significant
disadvantage to the loan
company.
Task 8.5.
List five of the checks the credit provider would normally perform before preparing an offer letter.
No. Mark
1. Credit history: Throughout the past, they actively test debt repayment and
sometimes even assess the credit rating that offers credit company comprehensive
information regarding borrower's performance.
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2. Capacity: Taxable income and work experience become valid credit worthiness
metrics for the current debt. The volume of sales, the consistency and the type of
income may calculate anything. Equity-to-income ratio can be used to determine
the amount of current and any interest charges on pre-tax income.
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3. Collateral: Loans, lines of credit, or credit cards on which a person is entitled will
be unprotected or unmonitored. The amount of overall coverage would be
determined, deducting all existing debt covered by the protection from the interest.
The liquidity accessible plays a role in lending capacity.
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4 Capital: While the primary source of investment is believed to be community
assets, collateral represents the savings, bonds, and other resources that can help the
loan's repayment. In case this may be helpful if borrower lose, job or experience
some damages.
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5. Conditions: Creditors might want to ask how to use capita, and understand the
intent of the money, like whether the repayment could be used to buy properties.
Certain considerations might also be evaluated, like the economic and
environmental circumstances.
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Task 8.6.
Why do mortgage brokers become involved once again when the offer letter is forwarded to the
client? What legal responsibility under the NCCP Act leads to this involvement?
No. Mark
1. A phrase might be used for the purposes of the connected financial information
whenever the sentence is defined in the pre-contractual report.
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2. The scheduled release date for the information of the financial statement may be
mentioned in the Financial Statement.
/2
Task 8.7.
List four other matters relating to the offer letter that the mortgage broker should check.
No.
1. Age factors
2. Bank statements form the jobs business that provides details of the latest earnings.
3. Banks also looked with either the borrowing division at the scope of the land, when
a mortgage is being accepted.
4. The greater the governmental group, the chances of receiving loan permission.
Due to various their familiarity with the banking past, financial companies value
their existing clients
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Sub-total /13
Continued
Task 8.8.
Imagine that you are the client’s solicitor writing to the client. In words that the client is likely to
understand explain: what happens at settlement; how funds are normally disbursed following
settlement; and how the title document is registered.
No. Mark
1. In the lender opinion
Throughout the form of the title of land, render a valid mortgage record.
Which then offers the funds needed to buy the land which is actually required.
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2. Solicitors viewpoint
It is ensured that each private individual or person having rights of ownership
towards the premises is excluded from any outstanding debt on the vendor's
assets.
/1
3. More importantly, they use to collect the remainder of the seller's selling price.
There was a misunderstanding. Send the current property acquisition funds.
/1