FNSFMB501 Assessment 3

FNS50315 Diploma of Finance and Mortgage Broking Management
FNSFMB501 Settle applications and loan arrangements in the finance and
mortgage broking industry
Assessment 3
FNS50315_ FNSFMB501 Assessment 3 V1.0
REAA
Activity 1
You have been notified by your bank that your mortgage loan has been ‘approved
in principle’. Should
you immediately commit to purchasing a property? Explain your answer.
Activity 1 Answer
No, I should not immediately purchase a property. Approved in principle is
provided on the basis of the information about yourself that it is believed by
the bank that it is safe to provide you the mortgage. This makes you eligible
for the mortgage but it is not a guarantee of getting a mortgage loan. It can be
refused later by a mortgage provider even after giving approved in principle.
Activity 2
What steps should be taken to prepare for a property settlement?
Activity 2 Answer
Before property settlement it is required to prepare for it. The first thing
that needs to be done is to exchange the contracts as the buyer and seller are
not legally bound until the signed copies of contract are exchanged. The
individual should take time for reading the contracts and then get their
finances sorted before making the deal.

V1.0
REAA
Released January 2019
Page 2 of 5
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Activity 3
Henry has saved up $42,500 to use as a deposit and he wants to know the maximum
price of a property
he can purchase while avoiding Lender’s Mortgage Insurance (LMI). Henry’s
financial service provider
requires borrowers with a Loan to Value ratio (LVR) of 80% or more to take out
LMI.
Calculate how much Henry can spend on a property without having to pay LMI. Show
your workings.
Activity 3 Answer
Henry can only afford property around $214000 with a deposit of $42500 and LVR
80% and loan amount will be $170000
Activity 4
Identify and explain some of the benefits of the new PEXA system of e-
conveyancing.
Activity 4 Answer
Some benefits ofthe PEXA system of e-conveyancing are,
The utlization of this system is very convenient as it reduces paper work of the
individual.