FNSFMB402 Assessment 1 Knowledge

FNS40815 Certificate IV in FINANCE & MORTGAGE BROKING
FNSFMB402 Identify client needs for broking services
Assessment 1 - Knowledge
FNS40815_ FNSFMB402 Assessment 1 Knowledge REAA:
Released January 2019
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Activity 1
Explain the concept of ‘honeymoon rates’ offered by lenders periodically.
(Explain basic financial and accounting terms and concepts relating directly to
mortgage or finance
broking including: variable and fixed rate interest rates; types of mortgage
accounts; procedures and
principles of deposit bonds; financial records relating to different ownership
models).
Activity 1 Answer
The number of financial products which include the honeymoon period is huge.
These offers are help in alleviating the total burden of the loan over a short
period initially. There is an introductory low interest rate that reverts with a
higher rate when the rate period is considered over. Variable rate Home loan is
that rate which offer the borrowers more flexibility and also is lower rates
than the fixed home loan rates. However, in this rate the borrowers must be
warned of the possibility of increase in rates. Fixed Rate Home loan is in which
the clients consider budget in their policy of mortgage repayments. This locks
their interest rates and the repayments remain constant.

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REAA
Released January 2019
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Activity 2
What sort of information could a mortgage broker require to verify the credit
status of a home loan
applicant?
(Explain credit and credit reporting services).
Activity 2 Answer
For ensuring the home loan of the client is running smoothly it is important
for the broker to gather information from the client regarding, Age- which will
be evidence of ID that can be license, passport etc., Expenses – The details of
the expenses of the client fixed and variable also including credit card
expenses or maintanence expenses. Debt position – The loan details of the
borrower the history of repayments including credit cards, vehicle loans etc.

V1.0
REAA
Released January 2019
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Activity 3
What part, if any, do general economic conditions play when assessing applicants
for loans?
(Describe key features of the economic environment and business cycle, financial
markets and the
roles of industry participants, interest rates, exchange rates and inflation).
Activity 3 Answer
Inflation is the market is considered to be a part of the economy. Economic
condition plays an important role for assessing the loan of the applicants. The
business cycle can be identified as for having four distinct phases known as
expansion, peak , contraction and also trough. In a bad economical condition
the interest rates is higher generally.
V1.0
REAA
Released January 2019
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