FNSFMB401 Assessment 2 - Performance: Prepare Loan Application

This is Assessment 2 - Performance for FNSFMB401 Prepare loan application on behalf of finance or mortgage broking clients. The assessment requires reviewing client information requirements and assessing client home loan. The assessment also includes advising clients on how to proceed following the lender's likely decision of a non-offer.

F NS40 8 15 C e r t ifi ca t e IV i n F IN AN CE & MO R TG AGE B R O K ING
FNSF M B40 1 Pr epar e loan ap pli catio n on b eh al f o f fi nanc e or mor tgag e
broking clients
As se ssm e n t 2 - P e rfo rm an c e

Assessment information
You work as a mortgage broker for ZYX Financial Services Pty Ltd (ZYX). XYZ represents a number of
Australian home loan lenders.
New clients, Sam and Michelle have come to you for advice about obtaining a home loan.
Instructions to complete this assessment
In order to complete this assessment, you are required to complete the following sections
consecutively. Details and specific instructions are provided within each section and on the
form/templates provided.
S e c t io n 1 – Re vie w Cl ie nt Infor m ati o n Requ i re m en ts
Download and review the Home Loan Enquiry Case Study, located in the Assessment Resources
folder.
Sec t io n 2 – A ss e ss C l ie nt H o m e L o an
Now complete each of the following steps:
1. Assess whether a home loan application by Sam and Michelle, based on typical current lender
requirements, is likely to be successful. Provide detailed explanations in support of your
answer.
Sam and Michelle are earnings quite well on an annual basis. But the savings they could make out
of it is quite less for meeting the repayment requirements if they applied for the home loan of $600000
but there savings are quite impressive towards making repayments.
However, there is an option available to this couple of getting lender mortgage insurance which
would be helpful for them in obtaining home loan for the purpose of getting owner occupied house. As
per the requirements of LMI, the borrower need to make deposit not less than 10% of the loan amount
which is not at all refundable and non-transferable (Meredith and Darroch, 2018). Here Sam and Michelle
could put down a deposit equivalent to 10% and the LMI would be helpful in assuring the repayments on
time. Also, if they are the buyers of home for the first time, then they will also get eligible for the grant

available for Aussies up to $10000 under the first time home-owner or buyer grant if the value of the
house purchased is less than $750000. Furthermore, home builder grant & stamp duty exemption are also
available for the home buyers. At last, it is a positive aspect for the couple that they will get better
serviceability due to not having any other debt and obligations.

2. How will you communicate the results of your assessment with your clients?
To communicate the results of the assessment to the couple, the meeting will be arranged with them to
inform regarding the approval of advance they want to seek due to their current financial circumstances
despite insufficient savings and gross income as compared to the cost of the home they are desiring to
buy (Dileep Kumar and Nijaguna, 2019). However, the $600 savings per month has positioned you in a
better position making other effective requirements at $0.
3. Advise your clients on how to proceed following the lender's likely decision of a non-offer.
Post the refusal of the home loan application, it is advisable to the client that they must carefully
undertake the examination of the letter provided by the bank clarifying the non – offer decision along
with the attached explanation or cause for which such non – offer decisions have been taken. Also, it
would be advisable to boost their savings that is meant for making repayments towards the loan obtained
and accordingly, apply for the loan again whenever their indicative financial situation gets improved.
Also, those clients who wish to get smaller loan against their savings are always encouraged and thus
they could take advantage of their small savings in fulfilling their higher demands.

REFERENCES
Meredith, P. and Darroch, J. L., 2018. Innovation in the Mortgage Market. In Stumbling Giants (pp. 49-
66). University of Toronto Press.
Dileep Kumar, G. and Nijaguna, M., 2019. A Study on Customer Relationship Management at
EDELWEISS Broking Ltd, Bengaluru.