Loan Application Process Assessment

This article provides a comprehensive guide to the loan application process and assessment. It covers the documents required, steps involved, and the importance of credit score. The article also discusses the process of completing the customer file and processing the application for credit. It provides insights into loan comments and evidence of income. The subject of loan application and process assessment is explored in detail.

Loan Application
Process Assessment

Table of Contents
Task 1: ...................................................................................................................................1
File notes from first contact through to settlement in chronological order............................1
Authorised Credit Representative Credit Guide and Licensee Credit Guide.........................2
Privacy Statement and Consent form.....................................................................................2
Client Needs Review or Fact Find..........................................................................................3
Combined Credit Quote and Proposal....................................................................................3
Product Comparison Report Preliminary Assessment...........................................................3
Costing sheet for Fees and Charges........................................................................................4
Fully completed Lender Loan Application or Copy of Online lodgement............................5
Lender’s loan Document Check List .....................................................................................6
Task 2: Process application for credit....................................................................................8
A completed serviceability calculator (refer to useful resources)
................................................................................................................................................8
Loan Comments/Lender Comments.......................................................................................8
Evidence of Income ...............................................................................................................8
Evidence of savings/equity and other loan commitments....................................................17
Evidence of Valuation successfully completed....................................................................17
Anti-Money Laundering/Counter Terrorism Financing ID requirements............................22
A Compliance file checklist.................................................................................................22
Task 3: Completing customer file........................................................................................24
Task 4: Customer /referrer data base ...................................................................................25
CONCLUSION..............................................................................................................................26
REFERENCES..............................................................................................................................27
........................................................................................................................................................27
APPENDICES...............................................................................................................................28
AAMC TRAINING DOCUMENT CHECKLIST...............................................................28
.......................................................................................................................................................29

INTRODUCTION
Everybody in this world needs loan for something or the other in their life. This loan
taking process can be used to fulfil their needs. The individual has to verify various different
documents that the bank is asking if they don't fulfil it the bank will not give them loan. Another
major requirement that the banks nowadays are asking the credit score of the individual. In this
report the individual is needing the loan for building his house.
MAIN BODY
Task 1:
FHOGs is an abbreviation for First Home Owner Grant and it is a scheme that was
founded in 1 July 2000. This was set up in order to offset the effects of GST on Home
Ownership. It is to be considered as a national scheme that is funded by an accumulation of
territories and states and are being administered in accordance to their own legislature.
There has been a substantial decline in the affordability criteria in the housing market of
Australia. This problem of affordability is more excruciating for the first-time buyers and
therefore in order to mitigate this FHOGs are introduced. Any fluctuations in these criteria will
result in the hike of prices for the first-time buyers. And therefore, houses might exceed their
affordability criteria.
File notes from first contact through to settlement in chronological order
The notes taken in the first interaction by the broker associated with the eligible criteria of the
client will revolve around:
1. In order to check the eligibility criteria for loan the credit score of the concerned client
was 750 and therefore he as eligible for the loan.
2. The salary slip of client was taken into consideration in order to make sure that he has
frequent income flow.
3. In order to make sure that the client is eligible for paying the principal amount of the loan
along with the interest, his income was taken into consideration.
4. Client's legal record was also looked at.

Authorised Credit Representative Credit Guide and Licensee Credit Guide
The guide for the home loan revolves around the aforementioned steps.
Privacy Statement and Consent form
The privacy statement and content form are as follows:
Consent form revolves around making sure the client is compatible with the terms and
conditions of the loan provider. It helps in having a clarity in the contract.
Client Needs Review or Fact Find
1. Client needs the loan because the affordability structure of the marketplace is higher than
the client's savings.
2. The option of loan is taken into consideration because the client does not have to pay the
whole amount of loan at once. He can distribute that amount and pay it in instalments
over a fixed period of time.
3. Since the client is buying a house for the very first time, the prices of house is not
compatible with his pay-out structure.

Combined Credit Quote and Proposal
Applicant is Alan Jacob Henderson belonging to 17 Capital court. The applicant's gross
income is $111,000 per annum. The depends of the applicants are Jennifer Ann Henderson
DOB 07.03.2004 and Michael Alan Henderson DOB 07.03.2004. The applicant's bank details
are NAB – BSB: 001 002 A/c Number: 1234567. Other details about the applicants are he have
signed a contract of sale subject to finance for 3 weeks. The savings of Alan Jacob Henderson
are $110K. Alan Jacob Henderson is eligible for FHOG of $300,000. Alan Jacob Henderson
have paid $27K deposit on the $300K block of land. The estimated cost that will be incurred in
construction will be in the bracket of $350-360K. The applicant is believed to spend an
additional $32K on new furniture and curtains. Alan Jacob Henderson further wishes to spend
$78K of his savings as equity/deposit. Alan Jacob Henderson is believed to pay off his credit
cards in full every month.
Product Comparison Report Preliminary Assessment
Commonwealth Bank – Considered to be one of the biggest banks in Austria. This is considered
to be the first choice of any customer who is looking for a source of financing all over the
country. With its global operations, this bank is considered to be safe and is truth worthy among
the clients. The accountability and creditability of the bank in the market is strong and therefore
it will be the first choice for the applicant.
ANZ – It is an abbreviation for Australia and New Zealand Banking Group. This is the second
top most bank in the country. The financial institution has strong policies revolving around
attraction of customers. The bank is well known for their customer retention policies along with
the campaigns that they develop in order to enhance their customer satisfaction.
NAB – It is an abbreviation for National Australian Bank. This can be considered as one of the
most well-known financial institution all over the country and is known for their customer
experience enhancement methodologies and their strong focus on their believes and values
associated with the customers.
Costing sheet for Fees and Charge

Client statement of
position
Referred by: Peter Michael Consultant: Ian Harris
Date: 05/03/2019 Source: Accountant- 3 Smith St,
Melbourne-
Ph 03 94250000
Applicant 1: Mr/ Mrs/ Ms/ Miss Applicant 2: Mr/ Mrs/ Ms/ Miss
Surname: Brown Surname: Brown
First name: John First name: Samantha
Date of birth: 21/10/72 Date of birth: 13/06/74
Address: 1 Bourke Street Address: 1 Bourke Street
Point Cook VIC 3030 Point Cook VIC3030
Phone: [phone] Phone: [phone]
Mobile: [phone] Mobile: [phone]
Employer: Build It Right Carpentry
Pty Ltd
Business: FSR Consulting Pty Ltd
Occupation: Carpenter Occupation: Office manager
Income-gross/net $78,308 / $61,517.44 Income-gross/
net
$54,086/ $44,961.05
Current lender: Westpac FSR bank detail Westpac 032 000 123456
Estimated market value: $600,000 Mortgage
balance:
$120,000
Payment: $1,197.00 Monthly/Fortnightly/Weekly
Years to run: 10 Interest rate: 3.69%
Fully completed Lender Loan Application or Copy of Online lodgement
The Lender Loan Application is as follows:
Lender Loan Application
YOUR LETTERHEAD
Loan application for XXXXXX & XXXXXXXX
Loan amount $00000000
Latest date for approval ………/………/…………
Please find loan attached application for the above clients.
OPTIONS
Reason for loan
They have just arrived in Australia
They have moved from interstate due to employment transfer
They shared first division in Saturday’s lotto
Mum & Dad gifted them $80000
They are upgrading
Refinancing to use equity for investment or renovations, holidays or for whatever
Divorce – marriage split

Downgrading- kids left home
Employment
Just received promotion
Changed jobs for more income and permanency
Stable employment
Interstate transfer
Income
Single income is supported by Serviceability Assessment
Joint
Permanent staff for long period and expecting promotion.
RECOMMENDATION
We recommend this application in view of the following:
Stable employment
Stable address
Sound financial position
Sound income
Nothing adverse known
Security is in new expanding area
We recommend this application in view of the following:
SIGNED…………………………………………………………… Date…………/…………/………………
Lender’s loan Document Check List
Documents Availability
Two years personal tax returns. Yes
Two years personal tax assessment notices. Yes
Two years company/partnership/trust tax
returns.
Yes
Two years financial statements (if available). Yes

As many invoices as you can provide. Yes
For the cheque account where you receive your
pay, we will require the most recent statement
and a transaction history for the last six
months.
Yes
A copy of your agreement with the company
that you contract to.
Yes
A letter from your client that proves your
income and confirms if you have employees
and other expenses.
Yes

Task 2: Process application for credit.
Loan Comments/Lender Comments
This part covers the information about the loan comments from the manager as the
documents needed for the loan application is complete and applicant is eligible for taking the
loan. The procedure of the loan includes several documents such as the bank statement or income
statement and the information regarding the nationality of the applicant to make sure that
applicant belongs to the Australia and applicant is the citizen of Australia (Chuang et al 2018).
In order to complete the loan procedure these documents in particular is needed first of all the
document which is needed to apply for the housing loan is the amount of loan which is required
by the applicant after that applicant have to mention its income and provide its annual income
statement to the bank which helps bank to determine that applicant is capable or not to repay the
loan. Next document which is important to complete the procedure is the identity of the applicant
in order to make sure that the applicant belongs from Australia and not committing any type of
fraud with the bank. There are documents required by the bank for the current property of
applicant and the proof of residence is also mandatory for the applicant to submit to the bank.
The other documents which is needed by the bank is the proof of age and the photographs of the
applicant in order to prepare the application (Ebekozien et al 2018). At last the employee of the
member checks all the mandatory documents and it's authenticity and after cross checking all the
documents loan is sanctioned to the applicant and provided to the applicant in the instalments.
Evidence of Income
The applicant's pay slip is as follows:
FSR Consulting PVT Ltd
PAYSLIP
ABN: 11 123 456 789
ACN: 123 456 789
1 King Street, Melbourne VIC 3000
Employee ID: 5245 Bookkeeper

Samantha Brown
1 Bourke Street, Point Cook VIC 3030
Period End: 30/06/20XX Tax Code:
Payments Type Rate Hours Amount
Ordinary Pay Weekly full time salary $27.7364 37.50 $1,040.11
Total ordinary payment 37.50 $1,040.11
_____________________________________________________________________________________
Summary
Ordinary pay and leave $ 1,040.11 Deductions $ 175.47
Taxable Allowances $ 0.00 P.A.Y.E $ 9,124.95
Non Taxable Allowances $ 0.00 Tax Credit $ 0.00
Gross pay $ 1,040.11 Net Pay $ 864.64
Year to date $ 54,086.00 Benefits $ 0.00
Leave Balances Hours 175.87
_____________________________________________________________________________________
Direct Credit Details
Samantha Brown Westpac Bank Account BSB 032 000 A/C 123456
$864.64
The notice of assessment is as follows:

Undelivered notices should be returned to:
GPO Box 5300
Melbourne VIC3001
Samantha Brown
1 Bourke Street Your Tax file number is
Point Cook VIC 3030 456 XXX XXX
Date Issue
3 July 20XX
Income Tax Assessment Act 1936
NOTICE OF ASSESSMENT
For the year ended 30 June 20XX (or substituted accounting period)
Your Taxable Income is $54,086 $
Tax on Taxable Income A 9124.95DR
Medicare Levy O 1081.72DR
PAYG withholding credits E 1020.20CR
Tax Offsets and other credits G 484.00 CR
Balance of this assessment L 3523.43CR
A refund cheque for this amount is below
**************************Additional information***************************
Tax offsets and Other Credits include $20.00 Franking tax offset.
PLEASE SEE THE REVERSE FOR IMPORTANT INFORMATION ABOUT YOUR
ASSESSMENT.
S.C. Ashmore-Smith
Deputy Commissioner of Taxation

Sydney Office, Sydney NSW

Evidence of Council approved plans

Burrows Holden
ACN: 009 071 444
ABN: 47 009 071 444
To:
John and Samantha Brown
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INVOICE DATE INVOICE/STOCK NO NEW/USED VEHICLE MAKE
17/10/20XX 1425361 NEW HOLDEN
ENGINE NUMBER CHASSIS NUMBER COMPLIANCE DATE COLOUR
QR25230948 JNITBNT30A0044491 20XX TWILIGHT

QUANTITY DESCRIPTION
1 Holden Captiva
Window Tint
Genuine Tow Bar
Dash Mat
Floor mats
Rear Cargo Tray
Full tank
Pre Delivery
Sub Total
GST
Stamp Duty
Registration
Total Price
Total amount payable
Make all cheques
payable to Fantastic
Holden

Evidence of savings/equity and other loan commitments
Asset
values
$
Liabilities
amount
owing $
Monthly
payments
$
Lender
Existing properties:
1. 600,000 120,000 1,197.00 Westpac
Other personal assets: Caravan 20,000
Furniture 100,000
Motor vehicles:
2002 Holden Ute 25,000
Credit card (1) Limit $5000 1,000 150.00 ANZ
(2) Limit $10000 3,000 300.00 Citibank
Overdraft
Personal Loans:
Superannuation: Mr 160,000
Mrs 80,000
Insurances: Mr Mrs
Life: y/n 400,000 300,000 700,000
Trauma: y/n 100,000 50,000 150,000
Income prot. 61,502 40,564 102,066
Wills: y/n
Power of attorney: y/n
On the basis of aforementioned balance sheet and records the savings of client can be
estimated to be $111,000. The client is also payable for a credit card payment of $1,000 and
$3,000 and Alan Jacob Henderson have paid $150 and $300 each.
Evidence of Valuation successfully completed

DOCUMENTS
MORTGAGE (M) AND/OR
PLANT, EQUIPMENT, VEHICLE
FINANCE/COMMERCIAL LENDING
(PEVC)
Type Data 
M/PEVC File Notes from first contact through to Settlement in chronological order ☐
M/PEVC Evidence of loan approval ☐
M only Loan/letter of offer from lender ☐
M/PEVC Borrowers checklist (Document sign-up) ☐
M only Correctly signed home loan contract (including transfer of land and mortgage
of land relevant to the State.) ☐
PEVC Correctly signed Consumer Loan contract for the Lender chosen ☐
M/PEVC Insurance details – Home Certificate of Currency or Motor Vehicle Certificate
of Currency ☐
M only Borrowers Authority and Instructions ☐
M only Evidence of settlement related communications between all parties (Broker,
Conveyancer, Lender, Client) e.g. a letter or email showing settlement
communications between all parties.
☐
M/PEVC Letter of successful settlement from broker ☐
M/PEVC Service Questionnaire or relevant example of feedback from client ☐
First Home Owners’ Grant application
The FHOG application form is as follows:

Counter Terrorism Financing ID requirements
It is a mandatory list of documentation that is required by any lender. This involves an
accumulation of many documentations such as identity proof, criminal records, verification from
neighbours and family members (French et al 2018), government issued id, driving license,
school mark sheets and certificates.
A Compliance file checklist Requirement: Details: Notes:
Adviser Verification of Name and either
Date of Birth or Address for AML &
CTF legislation
 Risk Based Assessment
completed
 Risk Classification & Checklist
completed (signed by Adviser)
& held on file
 Capstone ID Form completed &
held on file
 ID held on file
(excludes Risk Only
clients)
Y / N / NA
Y / N / NA
Y / N / NA
Y / N / NA
Must be completed
prior to advice being
given
Forms of ID required 1
2 Number of ID
documents captured
1 2
FSG Provided to Client (if new CIQ has
not been completed)
Version: Date:
Customer Information Questionnaire
fully Completed (including Risk
Profile)
Y / N / NA Date:
CIQ signed by Adviser & Client/s Y / N / NA Date:
Authorities obtained
 To obtain info:
 To provide info:
 Change Adviser:
Y / N / NA
Y / N / NA
Y / N / NA

 To hold TFN Y / N / NA
Advice Documents:
Specify Type SoA RoA EO Date:
Fund Profiles/Short Form
PDS/PDS/Research Provided
Y / N / NA
Invoice /Credit Card/Direct Debit
Prepared
Y / N / NA
Client Paperwork:
Authority to Proceed signed by client/s
and adviser
Y / N / NA Date:
Authority to Proceed amendments
actioned
Y / N / NA Date:
Invoice Checked & Signed Y / N / NA Date:
Application Forms signed by client/s
and adviser
Y / N / NA Date:
Application Forms processed/submitted Y / N / NA Date:
Copies of cheques held on file Y / N / NA Date:
Administration:
Product Provider Confirmations
Received & Verified
Y / N / NA
Commission verified Y / N / NA
File Notes for all client meeting held on
file
Y / N / NA
Checklist Author_______________________________________________________________
Task 3: Completing customer file.
Adding to your Interview Notes -

Customer – The interaction with customers concluded that the prices in UK housing
market are way too high and the loan acquisition criteria is very complex (Miu et al 2018). The
interview also suggested let the bank set associated with giving out the loans have the eligibility
criteria which is very hard to achieve. When it comes to the referrers in order for them to the
person that they are referring should be e granted the loan and since the eligibility criteria is so
hard to achieve loan acquisition becomes difficult. Concerned authorities which include
government bodies and stamp duties are doing their best to subdue the housing crisis in Australia
in order to do so FHOG was founded. The property
Task 4: Customer /referrer data base
Additionally, answer the following questions in relation to your database and building/ managing
your business contacts:
1. Why is important to build a database of clients/referral sources?
It is essential for any lender to prepare the database for any client in order to make sure
that the client is eligible in accordance to the lending criteria. Along with it it is essential to
create a database because the lender need to have all the specific and constructive information
about the client in order to make sure that the client will be able to pay the principle amount
along with the interests.
2. Why is it important to develop professional relationships?

It is essential to build professional relationships because these all things accumulate
together when it comes to future opportunities. It is impossible for anyone to acquire loans in
absence of this.
3. When is it not appropriate to contact a person and why?
It is not appropriate to contact any person when the contact is not based on that particular
person's consent.
4. Why is it important to have effective interpersonal styles and methods when dealing with
clients/referrers? Why is it important to consider special needs, culture, race, religion, origin,
demographics?
It is essential to have these skills in order to enhance the overall experience of the
associated customer.
5. Explain why you think it would be important to follow up any business referrers as quickly
as possible.
It is essential to do so in order to take full benefits of the offer.
6. What methods could you use in developing new business i.e.; advertising and promotion of
your services?
In today's world where everything is based on mobiles and computers. Digital landscape
and the operations associated with are the best approaches for business development.
CONCLUSION
From the above report it is conclude that there are various documentation that are
required during the time when the individual is taking house loan. The loan will only get
sanctioned if the individual is maintaining good credit score. The bank while lending the loan to
the individual will also look for the present bank statement and various different things.

REFERENCES
Chuang, M.C., Yang, W.R., Chen, M.C. and Lin, S.K., 2018. Pricing mortgage insurance
contracts under housing price cycles with jump risk: evidence from the UK housing
market. The European Journal of Finance. 24(11), pp.909-943.
Byrne, M., 2020. Generation rent and the financialization of housing: A comparative exploration
of the growth of the private rental sector in Ireland, the UK and Spain. Housing
studies, 35(4), pp.743-765.
French, D., McKillop, D. and Sharma, T., 2018. What determines UK housing equity withdrawal
in later life?. Regional Science and Urban Economics, 73, pp.143-154.
Miu, L.M., Wisniewska, N., Mazur, C., Hardy, J. and Hawkes, A., 2018. A simple assessment of
housing retrofit policies for the UK: what should succeed the energy company
obligation?. Energies, 11(8), p.2070.
Ebekozien, A., Abdul-Aziz, A.R. and Jaafar, M., 2019. Remedies to inaccessibility of low-cost
housing loan in Malaysia: using the qualitative approach. Pacific Rim Property Research
Journal, 25(2), pp.159-174.
Bright, S., Weatherall, D. and Willis, R., 2019. Exploring the complexities of energy retrofit in
mixed tenure social housing: a case study from England, UK. Energy Efficiency, 12(1),
pp.157-174.
Burrows, V., 2018. The impact of house prices on consumption in the uk: A new
perspective. Economica, 85(337), pp.92-123.
Udoka, C.O. and Kpataene, M., 2017. Mortgage financing and housing development in
Nigeria. International Journal of Research-Granthaalayah, 5(5), pp.182-206.
Sanderson, D.C., Shakurina, F. and Lim, J., 2019. The impact of sale and leaseback on
commercial real estate prices and initial yields in the UK. Journal of Property
Research, 36(3), pp.245-271.
Roos, C., 2019. The (de-) politicization of EU freedom of movement: political parties,
opportunities, and policy framing in Germany and the UK. Comparative
European Politics, 17(5), pp.631-650.
Cowell, F., Karagiannaki, E. and McKnight, A., 2019. The changing distribution of wealth in the
pre-crisis US and UK: the role of socio-economic factors. Oxford Economic
Papers, 71(1), pp.1-24.
Ebekozien, A., Abdul-Aziz, A.R. and Jaafar, M., 2019. THE ROLE OF FEDERALISM IN
MALAYSIAN LOW-COST HOUSING PROVISION: THE UNEXPLORED
DIMENSION. Kajian Malaysia: Journal of Malaysian Studies, 37(1).
Arundel, R. and Hochstenbach, C., 2020. Divided access and the spatial polarization of housing
wealth. Urban Geography, 41(4), pp.497-523.
Murie, A., 2018. Shrinking the state in housing: challenges, transitions and
ambiguities. Cambridge Journal of Regions, Economy and Society, 11(3), pp.485-
501.
Farrar, S., Moizer, J., Lean, J. and Hyde, M., 2019. Gender, financial literacy, and preretirement
planning in the UK. Journal of Women & Aging, 31(4), pp.319-339.

APPENDICES
AAMC TRAINING DOCUMENT
CHECKLIST
LOAN APPLICATION PROCESS
ASSESSMENT
MORTGAGE FINANCE
Must be completed and included in your
uploaded Assessment
EVIDENCE
1. A fully completed AAMC Training Assessment Cover Sheet
2. A fully completed AAMC Training Document Checklist (this page)
Case Study - Loan Application Preparation (Task 1)
3. File notes from first contact through to settlement in chronological order
4. Authorised Credit Representative Credit Guide and Licensee Credit Guide
5. Privacy Statement and Consent form
6. Client Needs Review or Fact Find
7. Combined Credit Quote and Proposal
8. Product Comparison Report (at least three options)
9. Preliminary Assessment
10. Costing sheet for Fees and Charges
11. Fully completed Lender Loan Application or Copy of Online lodgement
Select a lender of your choice there are some forms in useful resources.
12. Lender’s loan Document Check List (Normally forms part of loan application)
Select a lender of your choice there are some forms in useful resources.
Process Applications for Credit (Task 2)
13. A completed serviceability calculator (refer to useful resources)
Select a lender of your choice there are some calculators in useful resources.
14. Loan Comments/Lender Comments. Notes to the lender in support of the application.
15. Evidence of Income (Pay slips, Employers Letter, PAYG Summaries)
16. Evidence of an Offer & Acceptance or a Contract of Sale or a Purchase contract

17. Evidence of Council approved plans (House and land, off the plan packages)
Plus a Fixed Price Building Contract
18. Evidence of savings/equity and other loan commitments
19. Evidence of Valuation successfully completed
20. First Home Owners’ Grant application (These can be downloaded from your local state
revenue office)
21. Anti-Money Laundering/Counter Terrorism Financing ID requirements
Note: 2 forms of identification are required for each applicant to the loan and a
separate AML ID form is required for each applicant.
22. A Compliance file checklist
Completing Customer File (Task 3)
23. Fully completed Settlement document pack (Refer to the Settlement File Checklist to
ensure all relevant documents are completed and submitted)
24. Create a customer/referrer database (Task 4 A)
You are required to prepare and submit your data-base on contacts made from this
transaction by using your internal CRM or a suitable program i.e. Excel/Word.
25. Short Answer Questions (Task 4 B)
Complete and submit all Short Answer questions