FNSFMB501 Settle Applications & Loan Arrangements Assessment 3

Finance and Mortgage
Broking

TABLE OF CONTENTS
ACTIVITY 1....................................................................................................................................3
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...3
ACTIVITY 2 ...................................................................................................................................3
What steps should be taken to prepare for a property settlement?..............................................3
ACTIVITY 3....................................................................................................................................3
Calculate how much Henry can spend on a property without having to pay LMI. Show your
workings......................................................................................................................................3
ACTIVITY 4....................................................................................................................................4
Identify and explain some of the benefits of the new PEXA system of e-conveyancing...........4
ACTIVITY 5....................................................................................................................................4
How is buying property at an auction different from buying property through a real estate
agent?..........................................................................................................................................4
ACTIVITY 6....................................................................................................................................4
What sort of disbursements might a conveyancer make on behalf of a property purchaser?.....4
ACTIVITY 7....................................................................................................................................5
What are adjustments when related to a property settlement?....................................................5
REFERENCES................................................................................................................................6

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
Answer
In case the mortgage loan has been approved in principle which is notified by the bank to
user can take the decision according to requirement (Rajapakse and Senarath, 2019). He can
make decision regarding his needs as he will become able to get the funds within few working
days. Purchasing a property can be decided by borrower after getting the approval. There is
should be that payment for purchase of property can be done by receiving fund from bank not
just approval.
ACTIVITY 2
What steps should be taken to prepare for a property settlement?
Answer
For the property settlement there is systematic process which has five steps that help to
complete objective in effective manner (Whait and et.al., 2019). It involves exchange of contract,
prepare for property settlement, pre inspection, finalizing transferring of documentations,
completing of agreement.
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
Answer
Loan to Value ratio= principle amount/ market value of property
Property value= ?
Loan to Value ratio= 80%
Deposits= 42500
on the basis of this it can be specified that deposits is 20% of the property purchase as the LVR
is given 80%. on the basis of this property value will be calculated as follows: