Case Study 1: Philip and Jennifer Brown

This case study focuses on the financial situation and loan requirements of Philip and Jennifer Brown, a young couple looking to buy their first home. It includes details of the property they wish to purchase, their financial and employment details, and the loan features they require.

Written Project
Certificate IV in Finance and Mortgage
Broking(CIVMB_AS_v5A2)
Student identification(student to complete)
Please complete the fields shaded grey.
Student number
Written projectoverall result (assessor to complete)
First submission Not yet demonstrated
Resubmission (if applicable) Not applicable
CIVMB_AS_v5A2

Result summary(assessor to complete)
Section 1: Case study 1 — Philip and Jennifer Brown First submission Resubmission (if required)
Task 1 — Key terms, gathering and documenting client information Not yet demonstrated Not applicable
Task 2 — Assessing the clients’ situation Not yet demonstrated Not applicable
Task 3 — Borrowing options Not yet demonstrated Not applicable
Task 4 — Reasonable enquiries Not yet demonstrated Not applicable
Task 5 — First Home Owners Grant and home buyer assistance schemes Not yet demonstrated Not applicable
Task 6 — Professional network and loan settlement process Not yet demonstrated Not applicable
Task 7 — Interest rates Not yet demonstrated Not applicable
Section 2: Case study 2 — Richard and Pauline Jackson
Task 8 — Establishing level of financial knowledge Not yet demonstrated Not applicable
Task 9 — Responsible lending obligations Not yet demonstrated Not applicable
Task 10 — Self-employed special considerations Not yet demonstrated Not applicable
Task 11 — Advising on strategies Not yet demonstrated Not applicable
Task 12 — Impact of credit history Not yet demonstrated Not applicable
Task 13 — Dispute resolution Not yet demonstrated Not applicable
Task 14 — Effective access to files Not yet demonstrated Not applicable
Section 3: Case study 3 — Mary Jane Smith
Task 15 — Prepare and check a loan application Not yet demonstrated Not applicable
Section 4: Working in financial services
Task 16 — Financial services legislation and industry codes of practice Not yet demonstrated Not applicable
Task 17 — Design a document Not yet demonstrated Not applicable
Task 18 — Applying principles of professional practice to work in the financial
services industry Not yet demonstrated Not applicable
Task 19 — Develop and maintain in-depth knowledge of products and
services used by an organisation Not yet demonstrated Not applicable
Please note:To pass this written project, you will need to be assessed as DEMONSTRATED in either your
first submission or your resubmission in all tasksabove.
Task feedback
Please refer to the assessor’s detailed feedback found at the end of each task so that you know what to do
for any tasks you need to resubmit.
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Before you begin
Read everything in this document before you start your written projectforCertificate IV in Finance and
Mortgage Broking (CIVMB_ASMG_v5A2).
About this document
This document is the written project— half of the overall Written and Oral Project.
This document includes the following parts:
• Instructions for completing and submitting this project
• Section 1: Case study 1 — Philip and Jennifer Brown
A case study with a series of short-answer questions:
– Task 1 — Key terms, gathering and documenting client information
– Task 2 — Assessing the clients’ situation
– Task 3 — Borrowing options
– Task 4 — Reasonable enquiries
– Task 5 — First Home Owners Grant and home buyer assistance schemes
– Task 6 —Professional network and loan settlement process
– Task 7 — Interest rates
• Section 2: Case study 2 — Richard and Pauline Jackson
A case study and a series of short-answer questions:
– Task 8 — Establishing level of financial knowledge
– Task 9 — Responsible lending obligations
– Task 10 — Self-employed special considerations
– Task 11 — Advising on strategies
– Task 12 — Impact of credit history
– Task 13 — Dispute resolution
– Task 14 — Effective access to files
• Section 3: Case study 3 — Mary Jane Smith
A case study and a series of short-answer questions:
– Task 15 — Prepare and check a loan application
• Section 4:Working in financial services
– Task 16 — Financial services legislation and industry codes of practice
– Task 17 — Design a document
– Task 18 — Applying principles of professional practice to work in the financial services industry
– Task 19 — Develop and maintain in depth knowledge of products and services used by an
organisation
• Appendix 1:Key terms
• Appendix 2: Client information collection tool/Fact finder
• Appendix 3:Loan application.
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How to use the study plan
We recommend that you use the study plan for this subject to help you manage your time to complete
the written project within your enrolment period. Your study plan is in the KapLearn Certificate IV in
Finance and Mortgage Broking (CIVMBv5) subject room.
Instructions for completing and submitting the
written project
Completing the written project
Saving your work
Download this document to your desktop, type your answers in the spaces provided and save your work
regularly.
• Use the template provided, as other formats will not be accepted for these projects.
• Name your file as follows: Studentnumber_SubjectCode_Project_versionnumber_Submissionnumber
(e.g. 12345678_CIVMB_AS_v5A2_Submission1).
• Include your student ID on the first page of the project.
Before you submit your work, please do a spell check and proofread your work to ensure that everything
is clear and unambiguous.
Word count
The word count shown with each question is indicative only. You will not be penalised for exceeding the
suggested word count. Please do not include additional information which is outside the scope of the
question.
Additional research
When completing the ‘Client information collection tool’in Appendix 2, assumptions are permitted,
although they must not be in conflict with the information provided in the Case study.
Throughout the project you will also be required to research additional information from other
organisations in the finance industry to find the right products or services to meet your client’s
requirements or to calculate any service fees that may be applicable.
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Submitting the writtenproject
Only Microsoft Office compatible written projects submitted in the template file will be accepted for
marking by Kaplan Professional Education. You need to save and submit this entire document.
Do not remove any sections of the document.
Do not save your completed project as a PDF.
The written project must be completed before submitting it to Kaplan Professional Education.
Incomplete written projects will be returned to you unmarked. The written project must be submitted
together with the oral project. If you do not submit both completed projects at the one time it will be
returned to you unmarked.
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marking you will be unable to make any further changes to it.
Once you submit your written project for marking you will be unable to make any further changes to it.
You are able to submit bothprojects earlier than the deadline if you are confident you have completed all
parts and have prepared a quality submission.
Please refer to the Project submission/resubmission videos in the Assessment section of KapLearn under
your ‘Project Enrolment’ for details on how to submit/resubmit your written project.
Your Written Project and Oral Project must be submitted together on or before your due date. Please
check KapLearn for the due date.
The written project marking process
You have 26 weeks from the date of your enrolment in this subject to submit your completed project.
If you reach the end of your initial enrolment period and have been deemed ‘Not yet demonstrated’ in one
or more assessment items, then an additional four (4) weeks will be granted, provided you attempted all
assessment tasks during the initial enrolment period.
Your assessor will mark your written and oral project and return it to you in the Certificate IV in Finance and
Mortgage Broking (CIVMBv5) subject room in KapLearn under the ‘Assessment’ tab.
Make a reasonable attempt
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your written project. Failure to do so will mean that your project will not be accepted for marking;
therefore you will not receive the benefit of feedback on your submission.
If you do not meet these requirements, you will be notified. You will then have until your submission
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Project tasks are used to determine your ‘competence’ in demonstrating the required knowledge and/or
skills for each subject. As a result, you will be graded as either Demonstrated or Not yet demonstrated.
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Your assessor will follow the below process when marking your project:
• Assess your responses to each question, and sub-parts if applicable, and then determine whether you
have demonstrated competence in each question.
• Determine if, on a holistic basis, your responses to the questions have demonstrated overall
competence.
You must be deemed to be demonstrated in all assessment items in order to be awarded the units
of competency in this subject, including:
• all of the exam questions
• the written and oral project.
‘Not yet demonstrated’and resubmissions
Should sections of your project be marked as ‘not yet demonstrated’you will be given an additional
opportunity to amend your responses so that you can demonstrate your competency to the required level.
You must address the assessor’s feedback in your amended responses. You only need amend those sections
where the assessor has determined you are ‘not yet demonstrated’.
Make changes to your original submission. Use a different text colour for your resubmission. Your assessor
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assessor’s comments in your project, so your second assessor can see the instructions that were originally
provided for you. Do not change any comments made by a Kaplan assessor.
Units of competency
This written project is your opportunity to demonstrate your competency against these units:
FNSCRD301 Process applications for credit
FNSFMB401 Prepare a loan application on behalf of finance or mortgage broking clients
FNSFMB402 Identify client needs for broking services
FNSFMB403 Present broking options to client
FNSFMK505 Comply with financial services legislation and industry codes of practice
FNSINC401 Apply principles of professional practice to work in the financial services industry
FNSINC402 Develop and maintain in-depth knowledge of products and services used by an organisation or sector
BSBITU306 Design and produce business documents
BSBCUS301 Deliver and monitor a services to customers
BSBCUS402 Address customer needs
FNSSAM403 Prospect for new clients
FNSFMB501 Settle applications and loan arrangements in the finance and mortgage broking industry
Note that the written and oral project is one of two assessments required to meet the requirements of the
units of competency.
We are here to help
If you have any questions about this written project you can post your query at the ‘Ask your Tutor’ forum
in your subject room. You can expect an answer within 24 hours of your posting from one of our technical
advisers or student support staff.
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Section 1: Case study 1 — Philip and Jennifer Brown
Background
Philip and Jennifer Brown are a young couple about to buy their first home. They have been married for
five years and during that time have rented an apartment while saving for their own home.
Following a personal referral from Glenn Brown, Philip’s brother you have already had a first meeting with
Philip and Jennifer to discuss their objectives and needs. They admitted they have little time to do much
research of lenders, have limited knowledge of the loan products available and have approached you to
guide them through the process as they are confused.
During (and subsequent) to your first meeting, Philip and Jennifer have provided the basic information
documents — pay slips, tax returns, bank statements, property details for review/verification. You have
now undertaken your preliminary assessment and need to discuss and present to them the proposal
covering the options and your recommendations. It is important to get the proposal moving quickly,
as the agent has indicated other parties are interested in the property.
They have been looking at properties for the past three months and have found a 10 year old established
apartment that has really caught their eye, although they have some concern over the kitchen which
requires some minor renovations.
They have not paid a deposit at this stage, but the Real Estate Agent has provided some guidance on
additional fees and charges.
Following is a summary of the details of the property they wish to purchase, the couple’s financial and
employment details, and the loan features they require.
The property
Address Unit 1, 92 Seaside Lane Edgartown (Your state)
Purchase price $490,000
Description 2 bedroom, 2 bathroom Strata Title apartment
Agent details Stephanie Jones
Phone [phone]
Mobile [phone]
The couple
Current address Unit 12, 22 Wentworth Lane, Highville, (Your state)
Philip and Jennifer have lived there since March 2012
Home phone [phone]
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Funds position
Purchase price $490,000
Clients’ estimate of costs $25,000
Total required $515,000
Loan $440,000 + LMI
Clients’ total contribution (including deposit of $50,000) $75,000
Use fees and charges applicable to your state. If a servicing calculator you are using requires a postcode,
select one that would represent a reasonable suburb/location in your city or state.
Assets
Capital Bank savings account (joint) $78,000
Capital Bank cheque account (joint) $1600
Holden Commodore SS 2007 (Philip) $25,000
Kia Cerato Sport 2015 (Jennifer) $9000
Superannuation — Capital Bank (Philip) $28,000
Superannuation — Capital Bank (Jennifer) $62,000
Household effects (insured value) $40,000
Liabilities
Capital Bank personal loan (Philip) $5,600 (repayments $180 p.m.)
Capital Bank Visa card (Philip) $200 (limit $4,000)
Capital Bank Visa card (Jennifer) $1,600 (limit $5,000)
Payments have always been met on time and any prior loans repaid in terms of contracts. The minimum
monthly commitment on each of the credit cards should be calculated at 3% of the credit limit.
Living expenses
Annual expenditure for living expenses — $33,000.
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Employment and income
Philip (date of birth 21/2/87)
Position Team Leader (full time)
Employer ACE Limited 101 City Rd, Westside (Your state)
Phone [phone]
Income (gross) $58,000 p.a. monthly gross income: $4,833
Employer contact Dwayne Johnson, HR Manager
Length of service Since October 2005
Driver’s licence 8855KL
Email [e-mail]
Jennifer (date of birth 8/10/88)
Position Accountant (full time)
Employer Tech city 804 High Street, City East (Your state)
Phone [phone]
Income (gross) $95,000 p.a. monthly gross income: $7,917
Employer contact Bruce Wayne, HR Manager
Length of service Since March 2006
Driver’s licence 17016C
Email [e-mail]
Solicitor’s details
Jones and Co
22 High Street, City East (Your state)
Phone: [phone]
Email: jonesandco.net.au
The solicitor has quoted a fee of $1,500 for the conveyance.
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The loan requirements
• 30 year term
• premium option home loan features
• variable interest rate (for this case use 4.5%p.a.)
• LMI to be capitalised
• proposed settlement date — six weeks from exchange of contracts
• ability to make additional payments from time to time without penalty
• fortnightly repayment option
• redraw facility
• funds access via card.
Note: Loan application fee is waived under Special Offer.
Other information
• They have advised that the Real Estate Agents have indicated they need to make a formal offer within
the next 10 days, however they are reluctant to do so until they obtain an approval.
• Jennifer has asked if there are any professional package benefits available because she is an accountant.
However, she did confirm she has not maintained her continuing professional development.
• Jennifer previously owned and lived in an apartment with her two older sisters when they attended
university but they sold this before she married — they did not make a lot from sale.
• Family plans are five years away.
• They do have plans to take a major overseas trip before family comes along.
• Philip is hoping for a promotion within the next 12 months upon possible retirement of a long-term
employee where he works.
 They have also expressed a concern about the possibility of interest rates increasing.
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Project tasks (student to complete)
Task 1 —Key terms,gathering and documenting client information
1. Complete the ‘Key terms’ (located at the end of the written project inAppendix 1).
2. Using the information provided in Case study 1, complete the ‘Client information collection
tool’(located at the end of the written project in Appendix 2).
3. You will also need to complete the Genworth Serviceability Calculator to assess the security,
debt service and borrowing capacity for Jennifer and Phillip Brown. To do this, follow these steps:
(a) Use the details in Case study 1.
(b) Read the Genworth Calculator Supplementary Material Guide available in the Kaplearn
CIVMBv5 subject room.
(c) Process the loan application using the Genworth Serviceability Calculator accessible here:
<https://www.genworth.com.au/lenders/lmi-tools/serviceability-calculator>.
(d) Once you have processed it, download a copy of the PDF and save it to your desktop.
Note:You will need to upload a copy of this pdf with your written and oral project submission. This will
assist your assessor with providing feedback on your written and oral project submission.
Note: Any assumptions you make should be listed and should not be in conflict with the case study
information already provided.
Assessor feedback for Task 1 — Key terms, gathering and documenting client information
(Insert Feedback)
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Not yet demonstrated
Resubmission (if required) Not applicable
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Task 2 — Assessing the clients’ situation
1. Based on the information provided in the case study and any other online tools used, you now need
to assess the clients’ loan application paying particular attention that you have met legislative
requirements, followed industry codes of practice and met lender credit policy.
Comment on issues such as:
• does it appear to meet legislative requirements (e.g. NCCP)
• maximum borrowing capacity of client
• capacity to meet deposit and total cash contribution for the loan required
• repayment requirements based on the loan required
• what the security will be and if it is appropriate
• do Jennifer and Phillip require Lenders Mortgage Insurance (LMI), and if so, how much will it cost and
what are the options to pay the fee
• what loan amount would you recommend, and why
• likelihood that the clients will be able to meet all their financial obligations
• do Jennifer and Philip qualify for concessions on any of the fees and charges
• any other issues that may impact, now or in the future, on the clients’ ability to meet their
obligations, including any possible risks.
Provide data to support your comments and conclusions. (750 words)
Note:The assessment of the clients’ needs is a critical prelude to you completing Part 4 of the
Oral project requirement for this course.
Student response to Task 2: Question 1
Answer here
Meeting Legislative requirements
Yes the clients have the requirements of NCCP as well as consumer credit code regulations. Couple has
good credit score which could be identified from the records of couple maintained with the bank they have
not made in default in the repayments of loan and credit card payments. The compliance requirement
regarding the consumer credit has been by the lender Capital banks. The complete details about the clients,
employment, contact details, property to be purchased and the broker has been provided. The application
have met all the legislative requirements before processing the loan further.
Maximum borrowing capacity of client
Maximum borrowing capacity of the clients is measured using borrowing power calculator that
assesses the earning capacity of the clients, dependants, existing and proposed loan and term of maturity.
As per the current earning capacity and proposed loan they could borrow up to $1,474,000. The borrowing
capacity of the clients is very high where the loan borrowed is less. Clients will pass the requirement for
passing the loan application based on borrowing capacity and credit score of the couple jointly
Capacity to meet deposit and total cash contribution for the loan required
Philip and Jennifer have been saving from many years and living in rented premised for purchasing
own home. They have cash saving in the savings account with capital bank. Also the total cash contribution
of $ 75000 could be met from that savings only. They are also having balance in superannuation account
which could also be used in case of need. They have surplus funds for meeting the deposits and cash
contributions for the loan.
Repayment requirements based on the loan required
Clients have applied for the home loan for purchasing new House. The loan amount applied is
$440,000. The clients want repayment over loan on fortnight basis so that they are not burdened with
single monthly payments for loan. The clients are also desirous of redraw facility so that they could make
additional payment for setting off the loan as soon as possible. The loan applied from the bank could
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provide all the repayment requirements as the term loan is significant period. However the set off charges
apply to the client on early sett off of the loan amount.
What the security will be and if it is appropriate
The loan provided by the bank are always provided on some or the other security so that they
could recover the amount in event of default. In the current case the loan will be secured on the property
itself. The title deeds will be transferred to the clients after the loan amount is repaid by the clients on
home. They will have the possession but not the title deeds.
Do Jennifer and Phillip require Lenders Mortgage Insurance (LMI), and if so, how much will it cost and
what are the options to pay the fee
When the amount borrowed in loan is more than 80% of purchase price of the home the clients are
required to pay lenders mortgage insurance. As the couple is borrowing more that 80% of the purchase
price of loan they are required to pay lenders mortgage insurance. The couple will be required to LMI of $
7,741 over the loan of $ 440,000. It protects the bank in case of default by the borrower due to any of the
discrepancies. It is paid by online means or with the loan.
What loan amount would you recommend, and why
They should have borrowed $ 390,000 which is lower than 80% this would have prevented the
couple to pay the LMI and have also reduced the deposit requirement to an extent. The LMI costs are non
refundable and additional cost that could be prevented if loan was lower than 80%.
Likelihood that the clients will be able to meet all their financial obligations
The couple have good credit score and has also met the consumer credit regulations. There is
greater likelihood of clients meeting their financial obligations. Both are employed in reputed organizations
of Western Australia and are getting fixed salary. The salaries are sufficient for meeting the obligations are
carrying out living expenses. Even if one of the members is not earning then also they are able to meet the
loan repayments.
Do Jennifer and Philip qualify for concessions on any of the fees and charges
They do not qualify for any concession or charges. They are only allowed processing without fees
under special offer.
Any other issues that may impact, now or in the future, on the clients’ ability to meet their obligations,
including any possible risks.
The couple are not having dependent currently. The earnings will have sharing on expansion of the
family in future. This can cause issues in the repayment of financial obligations.
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2. (a) Most lenders stress test loan repayments by adding an additional 2–3% on to the loan
repayments to make sure a borrower can afford the repayments. If interest rates moved
3% higher, what would Philip and Jennifer’s loan repayments be and do you think they would
be able to cope with the extra repayments? (100 words)
Student response to Task 2: Question 2(a)
Answer here
Lenders for ensuring that the applicant is able to make repayment timely and is able to afford the
repayments adds 2-3% over loan repayments.
Current interest rate 4.5%
Loan amount = $440,000
Monthly repayments = $2,229
Fortnight repayments = $1028
If interest rates are moved 3% higher
Newt interest rate 7.5%
Loan amount = $440,000
Monthly repayments = $3077
Fortnight repayments = $1419
Even if the interest rates are moved higher by 3% they will be able to meet the loan repayments without
making any default. Both Philip and Jennifer earn monthly salary of $ 12750 and they are making fortnight
repayments which also reduce the interest payments on loan.
(b) Identify appropriate product options you can present to the clients that may remove this
interest rate risk?(50 words)
Student response to Task 2: Question 2(b)
Answer here
The client could be suggested fixed interest rates loan which will not change through- out the loan term.
However the interest charged is somewhat higher than the variable interest rate loan. The risk of increase
in interest rate is removed completely if the client chooses for fixed rate loan.
Assessor feedback for Task 2 — Assessing the clients’ situation
(Insert Feedback)
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Not yet demonstrated
Resubmission (if required) Not applicable
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Task 3— Borrowing options
Although Philip and Jennifer are looking to borrow at approximately 90% LVR, what other options could you
present that would avoid the cost of LMI? (100 words)
Student response to Task 3
Answer here
This is attached with the loan types, amount of loans and the borrowers. The clients could choose lenders
that have discounted LMI provider. LMI increases with the increase in loan amount. The 20% deposit
option reduces the requirement of LMI payments over loan. As the clients are borrowing at 90% LVR they
can use guarantor to borrow over 80% it will remove the LMI cost on loan. If they have guarantor over the
home loan they could avoid the LMI cost completely over the loan. They can make any person of their
knowing to give guarantee over the loan. Brother of Philip can become guarantor.
Assessor feedback for Task 3 — Borrowing options
(Insert Feedback)
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Not yet demonstrated
Resubmission (if required) Not applicable
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Task 4 — Reasonable enquiries
In the course of gathering information about the couple, you are required under the National Consumer
Credit Protection Act 2009 to make all ‘reasonable’ enquiries to determine a borrower’s objectives,
requirements and financial situation.
Identify at least six (6) ‘reasonable’ enquiries that you would make with the clients in the case study and
explain why these enquiries are important in terms of NCCP compliance. (200 words)
Student response to Task 4
Answer here
After the incorporation of NCCP it has laid responsible lending obligations over the lenders to assess the
credit application of the borrowers before providing loans. These inquiries and principle are essential as the
protect the lenders from default risks by assessing the credit history and other associated inquiries as the
lender may find necessary for granting the loan.
Six inquiries made with client
1. What is the purpose and objective behind loan ?
To ensure that the proceeds are applied for legal purpose.
2. What are the current financial conditions and sources of income ?
To know the amount which the client is able to afford the loan and have sufficient income for making
repayments.
3. What is the credit score of the clients ?
This is very essential to ensure that they have not defaulted earlier in any loan repayments
4. Cross verifying the details given in the loan application file of client ?
To confirm that details given are true and not false information is mentioned
5. How will the client meet the financial obligations ?
To know the ways how loan repayments will be made.
6. Existing loans which will go along with the loan applied by the clients.
To identify whether the client will be able to make repayments along with existing loans or not.
Assessor feedback for Task 4 — Reasonable enquiries
(Insert Feedback)
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Not yet demonstrated
Resubmission (if required) Not applicable
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Task 5 — First Home Owners Grant and home buyer assistance
schemes
Describe the First Home Owner’s Grant or home buyer assistance scheme benefits and stamp duty
concessions that are available in your State or Territory, who would be eligible and what would be
their benefit? Are Philip and Jennifer eligible for any assistance?
Note: Please identify which State or Territory you are from in your answer.(150 words)
Student response to Task 5
Answer here
Under the First home buyer assistance scheme the first buyer who are purchasing existing home of less that
$ 650,000 are allowed with full exemption on the transfer duty. For availing this exemption they have to
move in property within 12 months of buying and live there for continuous period of not less than six
months. This exemption will reduce the cost or transfer duty paid over purchase.
Clients could apply for First Home Owner Grant scheme through the bank or financial institution from
which loan is borrowed. The application has to be made within 12 of settlement for buying of property.
Other conditions are same as in FHBAS.
Federal government has announced grant of $25000 on renovations of existing homes.
The clients are not eligible for the stamp duty exemption in the state of Western Australia where some of
the states offer exemption for homes below $600,000.
Assessor feedback for Task 5 — First Home Owners Grant and home buyer assistance schemes
(Insert Feedback)
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Not yet demonstrated
Resubmission (if required) Not applicable
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Task 6 — Professional network and loan settlement process
1. Name three (3) parties, who are not directly involved in the processing of a loan and what their role is.
Explain how you would communicate with them in an efficient and effective manner so that they
understand pre-settlement conditions and their involvement required.(100 words)
Student response to Task 6: Question 1
Answer here
There are different parties that are associated with the loan that have significant influence over the loan
transactions and the processing of loan. The three parties involved in loan are
Loan Manager
Loan manager are not directly involved in processing the loan but analyses the application of loan from
clients to ensure that the loan is free from false statement and meets the condition for qualification of loan.
Client will communicate with managers during the processing of loan.
Owner of the property being sold
It is the party to whom loan amount will be paid. They have significant importance but are not directly
involved in loan. They will be communicated directly to inform about the settlements
Guarantor
Third party liable in case of default by clients.
2. Explain how you would develop and maintain relevant networks with professionals such as those you
detailed above or other professionals to ensure you are up to date with the products or services they
provide.(100 words)
Student response to Task 6: Question 2
Answer here
Network and connections with the professional for assisting with the products and information related to
loan will be maintained over phone calls and via email. They will be informed about the details and
conditions about the loan that are essential for the services provided by them. Lawyers and loan managers
can provide important details regarding the new schemes and the benefits that they could avail under the
different schemes coming from time to time.
3. You want to ensure that Philip and Jennifer have all the key insurance protections in place in case
something unfortunate was to happen to one of them. What process would you follow during your
discussion with the clients to ensure you have a good assessment of their needs?(100 words)
Student response to Task 6: Question 3
Answer here
It is essential for the lender to identify and assess the plans that client in case of the contingencies where
they are not able to meet the financial obligations. These have to be clarified and assessed during the
discussions with client. The clients could be asked about their future plans about the expansions. They
could be asked about the insurance policies they are having at present for protections against
uncertainties. They could also be asked directly about the back up plans in case one of the members is not
able to earn.
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4. Briefly explain why it is important for the broker to remain informed of developments in the lending
process despite not being actively involved at every stage.(100 words)
Student response to Task 6: Question 4
Answer here
Brokers are the people that are required to provide their clients with the best deals. They have to provide
them benefits associated with the purchase of certain property or land. They have to be updated about the
borrowing process and the prevailing lending process so that they could also give their clients financial
assistance to get into the transactions via loan. Most of the transactions take place through loans or
borrowing and borrower must inform their client about the developments in lending process to make the
deal more attractive. It also enables them to meet the requirements of clients.
5. Application form and related documents have now been signed and forwarded to the Lender for
approval. Philip and Jennifer have agreed that you will keep their Solicitor informed of progress if/when
the loan is approved.
Refer to the ‘Example of an Organisation’sPolicies and Procedures’ document in toolbox and explain
what the service standards and timelines are up to and including the issue of offer letter and mortgage
documents. (100 words)
Student response to Task 6: Question 5
Answer here
The service standards provides that the loans applications should be processed as they are received from
the clients. The clients should not be made to wait for long period for knowing the status of loan
application. The loan application should be processes as soon as possible and client should be informed
about the application and if passed the offer letter should be handed over and delivered at addressed
shared and via emails within 7 days. The mortgage document should also be verified simultaneously with
the loan documents so that the solicitor could be informed on time.
Page 19 of 69

6. Clients have now called to execute loan offer and mortgage documents and are nervous that their
Solicitor is very busy and difficult to contact. They want to know who will be responsible for what tasks
from this point in the lead up to settlement and immediately following settlement.
Explain to Philip and Jennifer who is responsible for completion of what tasks once the loan documents
have been returned to the lender and in the lead up to settlement and once settlement occurs. Focus on
the lending organisation and the client’s solicitor/conveyance roles in this part of the lending process.
(150 words)
Student response to Task 6: Question 6
Answer here
Once the loan application is passed for the loan they are send for approval by the lender. Once the
application is approved the lender requires the offer document and the mortgage documents. The lending
organisation will review the documents furnished for the loan and ensure that they are true and correct.
The lender afte analysing the loan documents will analyse the property for which the loan is passed. It gets
the documents for valuation and purchase price of the property. On satisfying with the documents related
to the property lender makes the payment directly to the seller of the property. The solicitor ensure that all
the documents related to the purchase of property , title deeds are free from any encumbrances and faults.
The solicitor ensures that the all the legal requirements associated with the property are complied such as
council rates and other taxes associated with the property.
Assessor feedback for Task 6 — Professional network and loan settlement process
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Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Not yet demonstrated
Resubmission (if required) Not applicable
Page 20 of 69

Task 7 — Interest rates
1. Conduct your own research and answer the following:
(a) What is the role of the RBA with respect to the movements of interest rates?
(b) Why is it important to have these controls and how do they impact mortgage loans in Australia?
(c) Are banks obliged to follow the RBA cash rate? Explain the reason for your answer.
(200 words)
Student response to Task 7: Question 1(a)–(c)
Answer here
a) RBA is responsible of the promotion of stability in financial system. This is done by providing and
managing liquidity to the institutions regulating payment systems and regulating the risks of the
financial system. It conducts monetary policy for achieving the goals of price stability, economic
prosperity and employment for the welfare of Australian people. It issues policies regarding the
interest rate depending on the cash flows it wants to generate in economy. Interest rates are
decreased for increasing consumer demand and increased for decreasing the demands and
increasing saving habits.
b) The controls laid by RBA are essential that the lenders do not charge high interest rates to the
borrowers. The controls protect both lenders and the borrowers from the defaults. They are also
essential for maintain the economic stability of the country. They also control the interest rates
over the loans and requires the lenders to comply with requirements or responsible lending.
c) No, the banks are not obliged to follow cash rate of RBA as the cost of the funding is not directly
related with level of Reserve Bank cash rate. Banks get large a large proportion of the funding from
international capital market.
Page 21 of 69

2. Philip and Jennifer from Case study 1, have called to discuss whether they should fix the interest rate on
their loan after having received several conflicting viewpoints from family and friends.
(a) Explain the process you would use to research and identify the various product options available
to meet the needs of Philip and Jennifer.
(b) Explain to Philip and Jennifer two (2)advantages and two (2) disadvantages of fixing a loan over
different fixed rate terms.
(150 words)
Student response to Task 7: Question 2(a)–(b)
Answer here
a) Jennifer and Philip is required to research and identify the different options that are available over
loans for meeting the requirements of loan. They can make research over the options over online
sources that provide information about the different options available. Comparison has to be made
between different loan and product options that is most beneficial for the couple. The pros and
cons associated with the options could be assessed by getting the information from different
brokers and institutions.
b) The fixed rate are the loans on which interest rate remain fixed over the term of the loan.
Advantages and disadvantages are
Advantages
1) The interest rate does not change over the period.
2) It allows the borrower to have fixed amount of expense every year.
Disadvantages
1) The rate of interest is higher in fixed rate loan
2) They have to pay higher rate even if the rate of interest prevailing is lower.
3. What other option/s can you suggest if they remain uncertain about whether to fix the rate on their
loan?(100 words)
Student response to Task 7: Question 3
Answer here
They could take variable rate loan in which they can have reduced interest rate when the economy is
stable. The couple could also avail interest swap where the rates are hedged with the interest rates of
other countries. Interest swap options are used by majority of borrower and companies to avail the benefit
of interests. They could also make the loan at variable interest rate at rates with flexible terms and
conditions where the loan agreement could be changed and modified in future by the client on their
choice.
Assessor feedback for Task 7 — Interest rates
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Question(s) that need to be resubmitted (if required) (List question numbers)
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Resubmission (if required) Not applicable
Page 22 of 69

Section 2: Case study 2 — Richard and Pauline Jackson
Background
Richard and Pauline Jackson have a small mowing and gardening business in which they have been working
for the last eight years. As it is only the two of them in the business they operate as a partnership.
They have approached you to help restructure their finance, as they are finding the management of their
debts a struggle following the loss of one of their major commercial property contracts.
After further questioning, you realise that the situation is more serious than they originally explained;
they had missed payments on their mortgage, only pay the minimum on their credit card of 3% each month
and the work ute they have on lease is expiring. They have a $15,000 residual payment due and do not
have the funds available.
They lost the major contract 12 months ago and fell behind on the mortgage payments soon
after.They spoke to their lender (First and Last Bank) anda ‘hardship application’ was approved. The missed
payments were corrected by extending the term of their loan. Nothing adverse was recorded on their
credit file but they are still struggling with all the monthly commitments.
After reading the case study above and reviewing their funding position below, answer the questions that
follow:
Assets
46 Walters Road, Ritchfield $490,000
First and Last Bank savings account (joint) $1,200
Little Saving Building Society cheque account (joint) $2,300
Business debtors (unpaid invoices for work) $6,200
Ford Utility, 3 years old (work vehicle) $25,000
Holden Commodore, 7 years old (family car) $15,000
Superannuation — AMB Insurance (Richard) $46,000
Superannuation — AMB Insurance (Pauline) $29,000
Household effects (insured value) $66,000
Liabilities
Lender Situation Interest rate Monthly repayment Debt
First and Last Bank
(home loan — joint)
Currently up to date though had three-month extension
to contract after hardship application 12 months ago
5.7% $1,567.00 $270,000
Big Bank Visa card
(Richard)
Only able to repay 3% per month for last six months 18.95% (pays 3% per month)
$240.00
$7,800
(limit $8,000)
Little Bank Visa card
(Pauline)
Only able to repay 3% per month for last six months
Is over limit by $800
21.5% (pays 3% per month)
$90.00
$3,800
(limit $3,000)
My Domain
Furniture Store
Did not keep to interest free contract and paying debt
by instalments
28.50% $370.00 $3,400
Super Car Loan
lease
Four-year contract expiring next month and need
$15,000 to pay residual
n/a $850.00 $15,000
(residual)
Total $3,117.00 $300,000
Page 23 of 69

Project tasks(student to complete)
Task 8 — Establishing level of financial knowledge
1. What communication skills wouldyou use to establish rapport and build a relationship with clients.
(150 words)
Student response to Task 8: Question 1
Answer here
The major type of communication skill which will assist in establishing good rapport and building good
relation with the client is to maintain eye contact with the consumer. This is the most important thing at
time of communicating with the client. This is majorly because of the reason that when the company
employees will have eye contact then this will increase the interest of the consumer as well in the working
and the product and services of the company. In addition to this another major type of skill required for the
employees is of being confident and friendly with the client. This is essential because of the reason that this
will motivate the consumer to frequently buy the goods and services with the company and will be happy
and satisfied with the services of company. This is due to the reason that when the employees will be
happy and friendly with the consumer then they will think that the company is much concerned relating to
the consumer and their requirement and thus, they will be happier.
2. Refer to the ‘Example of an organisation’s policies and procedures’ document found in the toolbox
and outline what service standards you should meet to provide a high level of service to clients.
Include timelines for returning client enquiries etc. in your response. (150 words)
Student response to Task 8: Question 2
Answer here
The policies and procedures is a document within the company which is most essential document for the
company to make use and employees to follow it in the same manner. This is essential because of the
reason that the policies and procedures are the rules and regulation which need to be followed by the
company and the employee to make and run the business in effective and profitable manner.
The major service standard to be followed by the company and the employees in order to provide good
services to client are as follows-
The first and foremost thing is the completion of the work on time and provides it to the consumer before
or on time. This is majorly essential as if the work will not be done on time then the consumer will not be
happy and satisfied.
Another major important standard of service is the completion of the work by keeping in mind the quality
of the product or the service which is to be provided to the consumer. This is due to the fact that if the
quality will not be good then the consumer will not like it.
Page 24 of 69

3. List two (2) questions that you would use to effectively communicate with the clients to confirm
Richard and Pauline’s understanding and knowledge about credit and finance.
List a further two (2) questions that you would ask to identify or confirm their current financial position,
including establishing their requirements and objectives with the refinance?
Advise where you would record the client’s responses.
(150 words)
Student response to Task 8: Question 3
Answer here
Two questions
Are you getting the services and the product with the same quality and the same prices which the Richard and Pauline
were providing before financial instability?
Do you think the Richard and Pauline are undertaking the right way of using and applying the finance into the business
as the company is facing some financial crisis?
Further two question
In accordance to your current weak financial position which are the measures which you would like to take in initiating
and restructuring the financial position?
How would you manage a balance between the uses of assets in order to repay all the different liabilities which the
company is having currently?
For recording the response of the client the entry within the computer system will be more effective. This is due to the
reason that this will have a record and proof for the future use as well.
Assessor feedback for Task 8 — Establishing level of financial knowledge
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Page 25 of 69

Task 9 — Responsible lending obligations
The National Consumer Credit Protection Act 2009 imposes ‘responsible lending’ obligations on brokers
that must be satisfied by all people arranging loan applications. The primary objective under responsible
lending guidelines is that the credit facility offered to the borrower is ‘not unsuitable’ for the borrower,
meets their requirements and objectives and will not create substantial hardship.
1. Refer to ‘What is substantial hardship?’ available in the toolbox. In your own words how would you
define ‘substantial hardship’ (detailed information on this subject is found at RG 209 issued by ASIC)?
(150 words)
Student response to Task 9: Question 1
Answer here
As per ASIC 2009 in certain cases credit is inadmissible for moneylender like in the event that they couldn't
ready to meet the accompanying prerequisites and the targets for taking the necessary advance. Here
borrower confronted substantial hardship that implies it becomes to hard to deal with the circumstance
and this sort of basic circumstance is known as substantial hardship. I would characterize substantial
hardship by saying that individuals who are experiencing troublesome circumstance for having misfortune
in the business and they lost the capacity of satisfying business purpose is experiencing substantial hardship
circumstance. So, toward the end it very well may be said that before support any advance or credit from
Bank and home loan place, there are few prerequisite of taking credit from bank for the moneylender and if
any of the necessity disregards the current circumstance of market bank can't have the option to support
advance for the lender.
2. What are the benefits of debt consolidation for Richard and Pauline? (100 words)
Student response to Task 9: Question 2
Answer here
As Richard and Pauline has six unique sorts of advance from various money lenders. As of now they need to
pay over $300000 to the money lenders which is very hard for them. So, for this situation in the event that
they take a major credit from bank to reimburse all the obligation combination than it will decrease the
measure of reimbursement, premium, stress and so forth. These are the advantage of debt consolidation
however separated from these advantages’ debt consolidation assists with diminishing the advance sum
which will get simpler for the two accomplices to reimburse one loan portion.
Page 26 of 69

3. Richard and Pauline have decided to consolidate their debts into their home loan with two splits,
one for the existing home loan and a second split for all other debts.
In the template below provide a new liabilities summary once Richard and Pauline have completed the
debt consolidation including their new monthly repayments.
Note: They have chosen to refinance with ‘One State Bank’ who are offering a 4.5% interest rate on a
variable, principal and interest loan over 30 years.
Student response to Task 9: Question 3
Lender Interest rate Monthly repayment Debt
First and Last Bank (home loan -joint) 5.7% 1567 270000
Big Bank Visa card (Richard) 18.95% 240 7800
Little Bank Visa card (Pauline) 21.5% 90 3800
My Domain Furniture Store 28.5% 370 3400
Super Car Loan lease 850 15000
One State Bank 4.5% 10000 300000
Total $13117 $600000
4. What savings will Richard and Pauline obtain in monthly repayments?
(Remember to show the calculation of how you determined the savings). (100 words)
Student response to Task 9: Question 4
Answer here
Previous repayment amounts are= ($1567+$240+90+$370+$850) = $3117 The monthly repayment of debt
consolidation is $10,000 So, after debt consolidation with One State Bank Richard & Pauline monthly
savings will be = ($10,000-$3117) = $6883.
Assessor feedback for Task 9 — Responsible lending obligations
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Page 27 of 69

Task 10 — Self-employed special considerations
1. As Richard and Pauline are self-employed, what documents will you need to obtain to verify and assess
their income? (150 words)
Student response to Task 10: Question 1
Answer here
As in the present case Richard and Pauline are both self employed and running the business as a
partnership so for verifying and assessing the income of them the use of profit and loss account and the
balance sheet will be made. This is particularly because of the reason that in the profit and loss account of
the company all the income and the expenses will be listed. Furthermore after deducting all the expenses
from the income the profit earned or the loss incurred will be listed. Thus, this will assist in reviewing the
financial profit or loss being suffered by the company. In addition to this the balance sheet can be used to
determine the financial position of the company. This will assist in verifying the financial position at which
the company is performing. Thus, this will list out all the assets and liabilities of the company. From this
information it can be assessed that whether the company is having enough sources of finance to pay off all
its liabilities or not. If not then this position will help the company in deciding for the various ways in which
the company can deal with this situation.
2. If a Low-doc application is an option for the customer, name three (3) extra documents you will need
to obtain and assess. Explain how each of these documents will establish their income.(150 words)
Student response to Task 10: Question 2
Answer here
The major three document that will be required to have access are as follows-
Bank statement- this is a document which will outline all the transaction done within the bank and the list
of all the performing investment which the company is having or the sources from which company can
recover the money and pay for mortgage.
Business activity statement- this is a statement through which all the transaction of the business can be
listed and assessed. Thus, with this the income which the business has from the business transaction is
listed and the remaining income can be accessed from this document.
Letter from accountant- this will include the information relating to all the assets and liabilities of the
company. This will list out all the assets from this the company can gain the income and the loan and other
activities can be repaid.
Page 28 of 69

3. Explain how applying for a Low-doc loan could lead the mortgage broker to be accused under NCCP
of recommending an ‘unsuitable’ product. (250 words)
Student response to Task 10: Question 3
Answer here
The low documentation loan is a mortgage loan that can be taken by the business by providing other
documents which are not major income for the company. This is majorly because of the reason that these
loans are generally for the self- employed people and it might possible that they have conventional proof
for the income of the company and because of this under these loan the requirement of documentation is
very low. The process of low doc loan is very simple and because of this many a times there are chances of
getting fraud in taking these types of loans. This is particularly because of the reason that many time people
take this loan by producing the false and wrong papers that is by providing information of unsuitable
product. Thus, because of this reason NCCP many times accuses the business for providing of unsuitable
product for taking the loans. Thus, due to this reason the for taking the loan the companies many a times
make use of the fraud business or fraud papers in order to take loan from the bank under the Low- doc loan
system.
Assessor feedback for Task 10 — Self-employed special considerations
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Page 29 of 69

Task 11 — Advising on strategies
Following the presentation of your proposal, Richard and Pauline say that they would like your advice on
strategies that could help them to repay their home loan as quickly as possible.
• List at least three (3) strategies or methods that will help them achieve their aim.
• Explain how each strategy will result in a home loan being repaid more quickly.
Note to students:You may refer to the MoneySmart website for information on this subject and your
answer may also include, but not be restricted to, available mobile phone apps used for debt management.
(300 words)
Student response to Task 11
Answer here
The three strategies that can eb used for achieving the objective are stated below.
Making high repayments: Through this making payment quickly will help in making payment quickly which
will result into reducing the financial burden in case of higher interest rate. This saved amount can be used
in paying off the mortgage soon.
Debt consolidation: This has incredible preferred position to use, as the due rates can be followed without
any problem. The borrower who are utilizing this need to pay single interest that too at the lower rate.
Through this technique borrower can be pay all the moneylenders one after another and can stop rising
obligations and related premium This strategy can be halted the obligations sum expenses and the charges.
If borrower join by utilizing inaccurate or wrong debt data it will cause issue in the following in light of the
fact that the sum, they will enter that will be naturally stacked in the product automatically through the
software. Some of the time loan cost may increment because of government forces. There are barely any or
very few in number offices who counsel the borrower however they don't give significant
recommendations to the borrower they just consider their business.
The snowball plan: It incorporates extra individuals while investigating the market. It targets small business
sectors and utilize special approach to recognize target market. The arrangement or technique give best
outcome in subjective exploration as opposed to quantitative. This strategy may once in a while one-sided
in the business. But this method may impose restriction on assets to use for helping at that point to
accomplish the point of getting contract at a lower loan fee for the business.
Assessor feedback for Task 11 — Advising on strategies
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Question(s) that need to be resubmitted (if required) (List question numbers)
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Page 30 of 69

Task 12 — Impact of credit history
Richard tells you that his former wife failed to properly meet their unsecured personal loan debt
obligations before they separated. Although he eventually repaid the debt, he is afraid that this incident
may count against him when he applies for a loan. There are a few things Richard can do as he is concerned
about his credit rating. What information would you provide in the following situations?
1. Provide Richard with the details of two (2) major credit reporting agencies and explain what information
may be recorded on his credit file. Information can be sourced from the websites of credit reporting
agencies and the Office of the Australian Information Commissioner.(200 words)
Student response to Task 12: Question 1
Answer here
The two significant credit rating organizations are given below with substantial data.
Transunion: This organization has distinctive software and each borrower have their own record in this
office and every month borrowers are refreshing their data without anyone else. In the event that they
can't submit update in the product, at that point they give refreshed data to the workplace and the
company updates the data. They keep record of open, current and previous location, name and business
data. The credit report additionally incorporates the monetary reliability quality of the borrower.
Experian: They keep record of obligation history of a borrower and discover the cash which they have in
hand. Acknowledge report, for example, is obligation history, in one history are kept by the moneylenders
so they can take further choices while giving cash. Credit organizations the individuals Richard long term
the words so they can dispose of the obligation who is make or expanding issues in their own and expert
life. Considering this reality experience functioning as a credit report organization and give credit to the
individuals who need this the most by following their data Inna valid software so when fundamental they
can discover it and can use to access for.
2. Richard has decided he would like to obtain a copy of his credit report from either Equifax or
illion Data Registries (formerly Dun & Bradstreet). Explain what options are available for the chosen
provider, how long it takes to obtain a copy, and the associated costs. (100 words)
Student response to Task 12: Question 2
Answer here
As Richard chooses to acquire credit report through credit rating office either from Equifax or Dun and
Bradstreet so there are a few systems which should be followed. First Richard have to call client assistance
centre and should let them for giving the credit report quickly and show they will accept the application as
a grant and will send the report within 15 days from the day of call. They typically complete three weeks for
providing the report as they have extremely significant information and afterward make to make an overly
dropping archive which includes checking various types of information like deposit, pay, bank statement
and so forth.
Page 31 of 69

3. If there are errors on file, what are the options for Richard to follow in order to have these errors
rectified? To assist you with answering this question, refer to the Equifax website. (150 words)
Student response to Task 12: Question 3
Answer here
The records which are recorded various types of archive with respect to credit and borrowings shows some
data tragically. Yet, as it is known to all that each issue has some perceived solution just somebody needs to
find solution of that. Equifax site is one sort of credit rating organization who give credit to borrower at a
low risk and Richard assume contract loan or credit from this site so it is clear he will give all sort of data
identified with the business is given to the site organization. But he has confronted issue of some significant
information has been appeared as blunder which should be redressed by the administration and this is the
reason, I mail them about the mistake. In mail, mentioned all the necessary issues which causes the
problem with the goal that administration can fix it up effectively yet to amended it Richard need to sit
tight for at least 30 days.
4. What obligation does the Privacy Act impose on the Lender to supply the client, in terms of certain
information, if they decline an application due to the content of the credit agency file? (100 words)
Student response to Task 12: Question 4
Answer here
Moneylender need to exhort the customer before taking conceded for the advance about decline of an
application while the substance of the Credit office record with managing the advance. Bank ought to keep
away from them at the hour of applying for the application that if any cases decrease any application while
running the procedure it will causes dismissal of the application. To make it clear bank should take
signature on the announcement by the borrower so that in future if their faces this sort of circumstance
they can show the application to the borrower.
5. What alternate options can you suggest to Richard and Pauline in the event that the loan was rejected
by the lender you initially proposed due to a creditreport?(150 words)
Student response to Task 12: Question 5
Answer here
On the off chance that advances get dismissed from the bank than Richard and Pauline should go for next
reinforcement. There is different reason for this in respect to credit report since credit report are made
dependent on bank statement and the most noticeably terrible business history. So, if any sort of awful
experience business faces then the bank can dismiss their proposition which isn't uplifting news for the
fringe however he needs to make another arrangement so they can get the destinations of taking advance
and can satisfy the necessity of the advance within the required time. Borrower can utilize the consumer
protection act to secure harms which happen for dismissing advance from the bank. They can file complaint
to the credit organization that their report isn't right and we have to correct an inappropriate information
with viable demonstrate. These are the alternative route for Richard and Pauline.
Page 32 of 69

Assessor feedback for Task 12 — Impact of credit history
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Question(s) that need to be resubmitted (if required) (List question numbers)
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Resubmission (if required) Not applicable
Page 33 of 69

Task 13 — Dispute resolution
1. Due to delays in loan processing, Richard has lodged a complaint with you about the time it’s taking to
get an approval on the loan. Although you’ve explained that this is because of delays with the lenders
processing system due to staff shortages, you’re concerned the matter may escalate beyond your
control.
(a) You are now required to record Richard’s feedback by completing the Customer Complaint Report
below.
Student response to Task 13: Question 1a
Customer Complaint Report
Customer name Richard
Title (Mr, Mrs, etc.) Family Name (surname) Given names
Mr NA Mr. Richard
Service being provided to client
Service fault from the customer service team and lodged a complaint with respect to the time it is taking
for getting approval on loan.
Nature of complaint
Aggressive
(b) Provide a response to Richard explaining the process going forward and what actions you will take
regarding his complaint in the box below.
Student response to Task 13: Question 1b
Answer here
The fundamental job of the credit and investment company is to process the various complaint of the
consumers of their schemes. These are not government subsidize and not standard Financial Service
foundations whether they are doing their own business by supporting buyers and banks while taking credit
for obligation or some other cases. Members are known as non-bank moneylenders, credit associations,
obligation assortment firms, fund representatives, budgetary organizers, administration aggregator, and so
forth. Australian Information Commissioner affirmed CRO for dealing with security of the clients by keeping
up protection act under 1988. The members from the credit offered under either through scheme which
are perceived by OC even before they get authorization for exposure of credit data in credit report.
Page 34 of 69

(c) Refer to the ‘Example of an Organisations Policies and Procedures’ document in the toolbox.
Produce a short report which identifies and recommends ways that you may be able to
improvethese Policies and Procedures, to keep clients like Richard up to date on the progress of
the loan application in the box below:
Student response to Task 13: Question 1c
Answer here
Implementing the automated system will help in updating the information on application progress. Also, in
the event that any individual has grievance about the credit supplier they can go legitimately to the CRO
and they will get up supporting help from them for tackling this kind of issues. The greatest fiscal
remuneration limit in 2018-1019 is $3, 23,500 which forced by CIO. This will help in building trust.
2. As a broker it is important to understand the role of the Financial Ombudsman. Explain the function and
role of the Australian Financial Complaints Authority (AFCA) in the External Dispute Resolution (EDR)
process and the options available to the claimant once a determination is made. (200 words)
Student response to Task 13: Question 2
Answer here
Our job is to help buyers and independent companies to agree with monetary firms about how to solve
their complaints. We are unprejudiced and autonomous. We don't represent either gathering to advocate
their position. In the event that a complaint doesn't resolve between the parties, we will choose a fitting
outcome. Administrative Guide 267 Oversight of the Australian Financial Complaints Authority (RG 267)
sets out which monetary entities should be members from AFCA and how ASIC will play out its oversight
job corresponding to AFCA. AFCA is a solitary contest goal conspire for budgetary administrations and
started procedure on 1 November 2018. AFCA can resolve grievances that a money related firm couldn't
resolve at IDR. Preceding the initiation of AFCA, there were two plans endorsed under the Corporations Act
and the National Consumer Credit Protection Act working in the Australian money related and credit
ventures.
3. What could be the maximum financial compensation limit amount payable to a consumer borrower
through AFCA for a claim for direct financial loss?(10 words)
Note:This may require some internet research.
Student response to Task 13: Question 3
Answer here
The maximum amount AFCA for non- financial loss is $5,000 per claim.
Page 35 of 69

Assessor feedback for Task 13 — Dispute resolution
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Page 36 of 69

Task 14 — Effective access to files
The loan application is finally approved. Loan offers have been produced by the lender, as have numerous
documents that the client needs to access and review. The lender has requested these documents be
forwarded as soon as they are available. Richard and Pauline are away at the moment and their email
provider has a size limit on the data that can be sent via email. Name a service provider that could assist
in solving this problem and explain how the service could assist with solving this problem.(70 words)
Student response to Task 14
Answer here
For this situation, Google drive is the most ideal choice to send information whatever the size it is as Google
drive can accept all and can be gotten to anyplace in the event that they have a web on telephone. What's
more, if any progressions required, they can remark through the drive and loan lender will get the notice
can be roll out that improvements before they coming.
Assessor feedback for Task 14 — Effective access to files
(Insert Feedback)
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Not yet demonstrated
Resubmission (if required) Not applicable
Page 37 of 69

Section 3: Case study 3— Mary Jane Smith
Task 15 —Prepareand check a loan application
Mary Jane Smith: Client Background
Mary Jane Smith is a young professional, excelling in her career within the IT industry. She has saved hard
and is ready to purchase a property of her own.
Her objective is to pay the loan down quickly and then use the equity in the property to purchase another.
She would like to build a small property portfolio over the next eight to 12 years.
You have met with her a few times and exchanged several emails and telephone calls. She has
complimentedyou on a few occasions for the service and guidance you have provided so far.
Mary has been cautious in finding and then negotiating the purchase of this property. It is now time to get
an application to a lender. You have gathered appropriate documents and completed all necessary checks.
Everything is looking positive to proceed.
1. Using the details in the Example Fact Find for Mary Jane Smith in the Toolbox, prepare a loan application
by completing Appendix 3 in this written project.
Page 38 of 69

2. Using the following list, select which basic items below will need to be gathered from Mary as the
supporting documentation necessary for her loan application:
Personal details
 Birth certificate or driver’s license
 Passport or Birth certificate
 Bank debit card Medicare card ☐ Utility/Phone bill
☐ Last six months savings account statements
☐ Last three months credit card statements
Proof of income
 Three current pay slips
 Signed letter from employer on letterhead (must have ABN)
☐ Latest year’spersonal tax return and tax assessment notice
☐ If self-employed — last two-year financial tax return and assessment notices
☐ If self-employed and no financials — three of the following four:
☐ Last 12 months BAS returns
☐ Original signed letter from accountant detailing net income, and how it was ascertained
☐ Last six months business bank statements
☐ Last 12 months ATO tax portal statements from the ATO
☐ For rental properties — copy of last three months lease statements, copy of agreement or letter from
realestate agent
Refinance
 Last six months loan statement
Property purchase
 Copy of contract/offer including title details
Construction
☐ Council approved plans and specifications
☐ Building contract
☐ Quotes for additional work
Page 39 of 69

3. Before submitting Mary’s loan application, you must check her details thoroughly to ensure accuracy.
Using the following two items available in the toolbox,check that the personal details and current
employment details section of Mary’s Fact Find document and loan application are accurate and identify
three (3) errors. Write your answer in the box below.
• example driver’s license
• example pay slip.
Student response to Task 15: Question 3
Answer here
The current employee details should be tallied with the driver’s licence in respect to name or contact
details and the date of expiry of license. the employee record should be in the form which can be easily
accessible to the work inspector and should be kept for at least 7 years unaltered. The employee records
are private in nature and no one should be allowed to access it. Employers are also required to make copies
of the employee’s record at the request of current or former employee.
4. Referto the ‘Example of an OrganisationsPolicies and Procedures’document in the toolbox and provide
at least two (2) examples in each question of how Mary’s loan application complies with each of the
below:
(a) The organisationalcredit policy.
Student response to Task 15: Question 4(a)
Answer here
AFCA has replaced the three previous EDR plans of the Financial Ombudsman Service, the Credit and
Investments Ombudsman and Superannuation Complaints Tribunal with the point of giving buyers
admittance to a solitary EDR system. Enrolment of the organization will be required under law or a permit
state of a financial firm. AFCA activities are financed by commitments made by its individuals. AFCA is the
single purpose of contact for complainants for EDR administrations has higher fiscal cut-off points is more
responsible to clients. Therefore, loan application of Mary has provided all the useful information in respect
to the broker and the required details which helps in making sure that the broker is complying with all the
rules or else Mary can take help of EDR scheme.
(b) Legislative requirements (particularly NCCP).
Student response to Task 15: Question 4(b)
Answer here
The NCCP Act, 2009, is enactment that is intended to secure purchasers and guarantee moral and expert
principles in the financial business. Banks and home loan intermediaries must hold a credit permit or be
enlisted as an approved credit delegate and should cling to the standards set out in the NCCP. The NCCP Act
is managed and implemented by ASIC as per the National Credit Code (NCC). The loan application of Mary
complies with all the set rules and regulations.
Page 40 of 69

(c) Industry Code of Practice.
Student response to Task 15: Question 4(c)
Answer here
The reason for an industry code is to guarantee industry consistence with the standards set for the benefit
of staffs and the clients. These code aims at the advancement of best industry work on, enhancing the
safety principles and upgrading customers certainty. Likewise, the reason and goals must be clear and
imparted to partners, industry members and buyers. These codes set out a system for consistence through
provisions such as: specific measures for consistence, applicable rules, norms and practices; RMS,
Complaint handling plans and an procedure for timely reviewing the code of conduct.
Assessor feedback for Task 15 — Prepare and check a loan application
(Insert Feedback)
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Not yet demonstrated
Resubmission (if required) Not applicable
Page 41 of 69

Section 4: Working in financial services
Task 16— Financial services legislation and industry codes
of practice
1. Conduct some research and identify two (2) websites that you could use to keep up to date with
legislative changes and two (2) websites for changes in Industry codes of practice. (50 words)
Student response to Task 16: Question 1
Answer here
Websites for legislative changes
https://www.legislation.gov.au/WhatsNew
https://www.aph.gov.au/parliamentary_business/bills_legislation
Websites for industry code of practice
https://www.business.gov.au/Products-and-services/Fair-trading/Codes-of-conduct
https://www.nhvr.gov.au/safety-accreditation-compliance/industry-codes-of-practice
2. Describe the key features of:
(a) The National Consumer Credit Protection Act 2009.(150 words)
Student response to Task 16: Question 2(a)
Answer here
The main feature of the National Consumer Credit Protection Act 2009 (NCCP Act) was the outlining of a
national permitting necessity for business entities/people that take part in credit exercises. The license
essential is an Australian Credit License (ACL), this is to demonstrate that the element is authorized to give
credit activities and not overstepping the law.
(b) The Privacy Act.
Student response to Task 16: Question 2(b)
Answer here
The Privacy Act forbids the divulgence of a record about a person from an arrangement of records missing
the composed consent of the individual, except if the exposure is as per one of twelve legal special cases
exception.
Page 42 of 69

(c) Code of Practice.
Student response to Task 16 Question 2(c)
Answer here
A code of training can be an archive that supplements work related safety and security laws and guidelines
to give point by point functional direction on the most proficient method to comply to lawful commitments,
and should be followed except if another arrangement with the equivalent or better wellbeing and security
standard is set up.
3. How would you communicate any changes in legislation or codes of practice to colleagues?(100 words)
Student response to Task 16: Question 3
Answer here
For communicating the changes one-on-one system can be used in which a business owner, or any other
relevant partner - could work through the implicit rules and other necessities and desires with existing staff.
Online based instructional class codes of conduct can be conveyed online in an arrangement that permits
staff to work through subjects at their own pace (even a cut off time ought to be set to guarantee it is done
in a convenient way). Subsequent to finishing the course, staff ought to have the option to print a
competency declaration as evidence that they comprehend the code. Organization intranet providing the
implicit rules on the organization intranet permits all staff to get to it when they have to. Representative
handbook a printed variant of the worker handbook available in a communal area, for example, a staff
room will give staff easy admittance to the code when required.
4. An Australian Credit Licencee must maintain statutory records; such as financial records,
membership certificates, insurance policies, training and risk assessment registers.
Explain how these could be managed to ensure they are secure and available for easy retrieval when
updating is required.(50 words)
Student response to Task 16: Question 4
Answer here
Record-keeping frameworks need to account for the nature of data to be stored and recovered; security
and access of documents and data (especially PC records); legitimacy and unwavering quality of the data
gathered and the framework on which it is recorded; assets and training required; and time span that the
records ought to be kept.
Assessor feedback for Task 16 — Financial services legislation and industry codes of practice
(Insert Feedback)
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Not yet demonstrated
Resubmission (if required) Not applicable
Page 43 of 69

Task 17 —Produce a document
You have recently joined YS Finance, a small broking business. Your employer has asked you to design
a personalised ‘CPD Register’ where you will record any training and personal development that you
undertake in your role as a mortgage broker.
Using the organisational requirements from the ‘YS Finance Personalised CPD Register checklist’ in the
toolbox, you will need to create a CPD Register in a new word document.
Your CPD Register should include a table with the following column headings:
• date
• activity
• duration
• content
• method
• location
• CPD points allocated.
Once you have created your CPD Register, you will need to do the following:
1. Save a copy of the CPD Register to your desktop.
2. Print the document.
3. Take a clear photo of the document and a screen snipping of the document from your screen.
To do this you will need to use the Snipping Tool on your device and a camera.
4. Insert a copy of the photo and the screen snipping into the box below.
Remember to do the following:
• Proofread your CPD Register prior to printing, to ensure there are no spelling errors.
• Adhere to all of the organisational requirements outlined in the ‘YS Finance Personalised CPD Register
checklist’.
Page 44 of 69

Student response to Task 17
Answer here
Assessor feedback for Task 17 — Produce a document
(Insert Feedback)
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Not yet demonstrated
Resubmission (if required) Not applicable
Page 45 of 69

Task 18 — Applying principles of professional practice to work
in the financial services industry
As a mortgage broker, you are required to complete 20 points per annum of Continuous Professional
Development (CPD). This task requires you to identify and evaluate appropriate professional development
(PD) opportunities available to you in the industry. In this task, you will need to visit the Education and
Events page on the Mortgage and Finance Association of Australia (MFAA)
website:<https://www.mfaa.com.au/education-events/courses>.
Identify two (2) professional development events that you would like to attend after your studies and
complete the table below.
Note:You can list events that are available online.
Student response to Task 18
Course Name Describe what the
event is about
Why have you
selected this event?
How will this event
help you to develop
professionally in
industry?
As a non-member, what
is the fee associated
with participating in this
event?
What is the
CPD value?
MFAA Initial
Compliance
pack
This course
assists the
brokers in
understanding
and gaining
knowledge
about the key
legislations.
It covers various
modules which
is important for
the career
advancement.
It covers topics
such as NCCP,
Privacy Act, AML,
literacy and
numeracy which
help in working
on these aspects
in future.
$220 6
MFAA SMSF
Lending
Program
This program is
especially
designed for the
brokers who
wants to gain
aspects in LRBA
and SMSF and
its rules and
regulations.
By completing
this program,
broker will be
considered as
the major
professionals
who are
involved in the
SMSF lending
transactions.
It will help in
practicing in the
field of SMSF
lending
accreditation
which will take
the professional
to the higher
level.
$880 22
Assessor feedback for Task 18 — Applying principles of professional practice to work in the
financial services industry
(Insert Feedback)
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Not yet demonstrated
Resubmission (if required) Not applicable
Page 46 of 69

Task 19 — Develop and maintain in-depth knowledge of products
and services used by an organisation
1. There are three (3) main types of products used in finance and mortgage broking:variable rate home
loans, fixed interest rate home loans and a line of credit.
Using the table below, define each product, its strengths, its weaknesses and how it is promoted.
You should list at least two (2) strengths and two (2) weaknesses for each product.
Write this in your own words.
Student response to Task 19: Question 1
Product/service definition Strengths Weaknesses Promotion
Variable rate
home loans In this loan is provided
at the rate which
fluctuates; thus,
amount can go up and
down.
1. It offers offset
account or the redraw
facility.
2. Suitable when
interest is expected to
go down.
1. Interest rate is not
fixed which may go up
in future.
2. Budgeting process
becomes challenging.
By offering lower rate
than the competitors.
Fixed
interest rate
home loans
In this, interest rate is
fixed for a specific
period.
1. Provides certainty
that repayment
amount will not
change.
2. If rates rise,
borrower is not
required to pay more.
1. Refinancing during
term will cause
penalty.
2. No option of offset
a/c or redraw
facilities.
By offering the risk-
free interest rate.
Line of credit It allows the mortgage
holder to have access
to the equity in the
property when
required.
1. Can have money
when needed.
2. Interest rate is low.
1. Might require
collateral.
2. Lender can change
the limit and interest
rate.
It is promoted by
offering lower rate
and other facilities.
2. This exercise requires you to compare refinancing options for a home loan to report on the benefits and
disadvantages of selecting a particular refinancing option.
To complete this task, you will need to visit<www.canstar.com.au>.
What service does Canstar provide?
Student response to Task 19: Question 2
Answer here
Smart Booster Home Loan can used for refinancing as it carries low rate, helps in savings, building equity.
Other benefits no monthly fees, free redraws, loan splits available but with lower rate it gets deprived of
other benefits which is being given in other higher rate refinancing options like offset account.
Canstar is the top research agency in Australia and the financial comparison site. It collects, analysis and
researches about variety of financial products on the basis of ratings, awards etc.
Page 47 of 69

3. You now need to examine the current rate, comparison rate and monthly repayment applicable
to refinancing a home loan by comparing home loans.
Enter the following details to compare:
Loan amount: $350,000
Loan purpose: Refinance
Type: Variable rate loan
State: NSW
Using the Sort feature on the website, fill in the table below for the product with:
Student response to Task 19: Question 3(a)–(c)
Provider name Loan type: Current rate Comparison rate Monthly repayment
(a) lowest
comparison
rate?
G&C Mutual
Bank
Home Loan 3.19% 3.23% 1512
(b) highest
monthly
repayment?
Flexible Home
Loan
Home Loan 4.31% 4.34% 1734.11
(c) highest star
rating? UBank Home Loan 3.07% 3.07% 1489
4. Answer the following questions about home loan products.
(a) As a mortgage broker, how would you keep informed about updates to the various home loan
product options in your organisation or elsewhere?
Student response to Task 19: Question 4(a)
Answer here
By conducting research on the various products available in the market is the only way through which the
mortgage broker can be kept informed about the new products and the changes in the existing products.
Page 48 of 69

(b) Describe one (1) emerging trend in variable rate home loans.
Note:This may require some internet research.
Student response to Task 19: Question 4(b)
Answer here
Nowadays, the home loans can be acquired at both fixed and variable interest rates which adjust with the
change in the market conditions. Thus, some risk is fixed and other is variable and this helps in taking
advantage of both.
Assessor feedback for Task 19 — Develop and maintain in-depth knowledge of products and
services used by an organisation
(Insert Feedback)
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Not yet demonstrated
Resubmission (if required) Not applicable
Page 49 of 69

Appendix 1: Key terms
1. In your own words, and using the grid below; define and explain loan transaction terminology and
definitions of the following:
Lender and
borrower
Answer here
The lender is person who provides loan to the person, institution or company at specific
interest rates and repayments terms
Borrower is person who has availed loan from the lender at fixed interest rates and to
be paid at such repayment schedules as may be agreed between both of them.
Lessor and lessee Answer here
Lessor is the person who grants asset on lease to the other person. Lessor is owner of
the asset that has provided been provided to lessee on lease on agreement.
Lessee is the person that makes periodic payment or one time payment to lessor against
the use of asset they are taking
Mortgagee and
mortgagor
Answer here
Mortgagee is the lender which is generally an entity which lends money to borrower for
purpose of purchasing real estate.
Mortgagor in the mortgage agreement is the party that borrows money for purchasing
real estate.
2. In your own words, and using the grid below; explain what the different documentation required by a
lender is:
Credit check
authority signed
Answer here
Lenders see the payment history and the low amounts of the debt and late payments.
Credit check helps the creditor to analyse the credit score of the borrower.
Guarantees Answer here
Guarantee is taken by the lender for the loan granted by the lender for securing the
payments or loans. So that in case of default by borrower it could be recovered by
guarantor
Loan contract Answer here
Loan contract is the legal agreement that consists of terms and conditions on which
loans are granted to borrower. It makes the contract enforceable in case of default.
Periodical payment
authority
Answer here
When setting periodical debit authority on account , VFS requires PPA for to be filled and
signed by customer before periodical payment authority could be set over nominated
account.
Signed application
form
Answer here
By entering name into appropriate fields of the online application, the person is legally
signing document. By signing the application form electronically processing is reduced,
electronic methods of signature may vary...
Page 50 of 69

3. In your own words, and using the grid below; describe:
The negotiation
process
Answer here
Negotiation refers to the process where terms and conditions are settled on the loan
between lender and borrower. It includes process where the terms of agreements are
reached by common understability and acceptance. The negotiation process should
result in win win situation for both the lender and borrower. The process ensures that
both borrower and lender are satisfied over the loan’s terms such as interest rates,
repayment scheduled payments , instalment amounts and such other factors associated
with the loan.
Page 51 of 69

Appendix 2: Client information collection tool/Fact finder
Appointment date: Student to insert date
Appointment time: Student to insert time
Applicant 1 Applicant 2
Surname Answer here
Brown
Answer here
Brown
Other names Answer here
Philip
Answer here
Jennifer
Contact details Address Answer here
Unit 12, 22 Wentworth Lane,
Highville,, Western Australia
Answer here
Unit 12, 22 Wentworth Lane,
Highville,, Western Australia
Phone (W)
Phone (H) Answer here
(W) 9800 1111
(H) 9123 2121
Answer here
(w) 9910 2033
(H) 9123 2121
Mobile Answer here Answer here
Email Answer here
[e-mail]
Answer here
[e-mail]
Employment Answer here
Team Leader
Answer here
Accountant
How long? Answer here
Since October 2005 (15 years)
Answer here
Since March 2006 (14 years)
Previous employer (if less than two years) Answer here
NA
Answer here
NA
How long? Answer here
NA
Answer here
NA
Employment type
(FT/PT/Casual/Self-employed) Answer here
Full time
Answer here
Full time
Gross income (p.a.) Answer here
$58,000 p.a
Answer here
$95,000 p.a.
Number of dependants Answer here
NA
Answer here
NA
Page 52 of 69

Motor vehicles Answer here
Holden Commodore SS 2007
Answer here
Kia Cerato Sport 2015
Loan purpose Answer here
For purchasing new home
Purchase price/Valuation Answer here
$490,000
Deposit on property Answer here
$50,000
Loan amount Answer here
$440,000
Borrowing capacity (using Genworth
serviceability calculation) Answer here
$153,000
Page 53 of 69

Assets and liabilities
Assets Liabilities
Details Market value Details Monthly payments Amount owing
Owner Occupied Property at: Answer here
NA
Mortgage with: Answer here Answer here
Investment Property at: Answer here
NA
Mortgage with: Answer here Answer here
Cash at bank
(includes fixed deposits) Answer here
$78,000
Car leasing Answer here Answer here
Other cash
(includes offset accounts) Answer here
$ 1600
Personal loans
1. Capital Bank
2.
Answer here
$180 p.m
Answer here
$5,600
Deposit paid on property (only if
paid) Answer here
$50,000
Overdraft Answer here Answer here
Motor vehicles:
1.
2.
Answer here
$25,000
$9000
Other loans:
1.
2.
Answer here Answer here
Personal effects Answer here
0
Credit card limit:
Answer here
Capital Bank Visa
card (Philip)- $4,000
Answer here
$200
Answer here
Business value (if self-employed) Answer here
0
Credit card limit:
Answer here
Capital Bank Visa
card (Jennifer)
Answer here
$1,600
Answer here
Shares and investments Answer here
0
Other: Answer here Answer here
Superannuation
Philip
Jennifer
Answer here
$28,000
$62,000
Other: Answer here Answer here
Other assets (give details)
Household effects
Answer here
$40,000
Other: Answer here Answer here
Total assets Answer here
$293,600
Total liabilities Answer here
$1980
Answer here
$5600
Surplus/deficiency: (Total assets less Total liabilities) $Answer here
Page 54 of 69

Total Assets = $293,600
Total Liabilities = $5600+$1980 = $7580
Surplus = $286,020
Page 55 of 69

CURRENT MONTHLY LIVING EXPENSES (Provide a breakdown of the total amount listed in the case study — use
your discretion)
Food/housekeeping $1200
Insurance (e.g. motor vehicles, home contents/ building, medical, life/income
protection) $100
Utilities (e.g. rates, gas, electricity, transport) $500
Transport (e.g. public transport, petrol, registration, repairs) $300
Education (e.g. school, college, university) 0
Dependents support(e.g. childcare, child maintenance) 0
Entertainment (include online subscriptions, e.g. Netflix/Stan) $250
Other (detail below):
Travel and personal entertainments $400
MONTHLY LIVING EXPENSES Answer here
2750
Page 56 of 69

Needs analysis
1 Name of your current lender? Answer here
Capital Bank
2 What type of mortgage loan do you have? Answer here
Personal loans
3 Why did you choose this particular loan and lender? Answer here
For meeting the personal needs
4 What is the interest rate? Answer here
3%
5 What are your payments? Amount Answer here
$180
6 Frequency Answer here
Monthly
7 Do you know the fees and charges? Answer here
No
8 What is your proposed purpose for the loan you are applying for? Answer here
For purchasing new home
9 Branch access available with current lender Answer here
Western Australia
10 Internet banking available with current lender Answer here
Capital Bank
11 Phone banking available with current lender Answer here
Capital Bank
12 Lenders not to be considered Answer here
NA
13 Type of loan sought Answer here
Home Loan
14 Preferred Interest rate range Answer here
3%-6%
15 Payment frequency Answer here
Fortnight payment option
Page 57 of 69

16 Redraw Answer here
Redraw facility for making additional
repayments at any time of the loan.
17 Offset Answer here
Offset Facility available
18 Salary crediting Answer here
$153,000
19 Low fees and charges Answer here
No additional charges
Notes
NB:Providing substantive notes here is a compulsory part of your assessment.
Answer here
The needs analysis states that the applicants are only having one personal loan and no other liability. Client
have passed the Genworth loan requirement criteria. The client are ready to make fortnight payments for
the repayments and will be availing redraw facility on the home loan. The salary is credited monthly to the
applicants. There are no additional charges for processing the loan as availed under special offer. Clients
have sufficient assets and have good credit score as they have not defaulted in payment for credit card. The
loan application to be sent for further processing. Clients have only one lender which is Capital bank that
also credit card facility.
Page 58 of 69

Anticipated fees and charges
Anticipated purchase price Answer here
$ 490000
Deposit on property Answer here
$ 50000
Loan amount Answer here
$ 440000
LVR Answer here
$ 89.8
Purchase costs
Stamp duty on transfer (include transfer fee) Answer here
$17,558
Solicitor/conveyancer (estimate) Answer here
$ 1500
Rates and land taxes (estimate) Answer here
$ 500
Pest inspection (estimate) Answer here
$ 300
Building Inspection (estimate) Answer here
$ 750
Borrowing costs
Application/establishment fee Answer here
$ 2000
Valuation fee Answer here
$2000
Security admin fee Answer here
$500
LMI Answer here
4.5%
Registration of mortgage Answer here
$1000
Page 59 of 69

Release of mortgage Answer here
$800
Search fees Answer here
$600
Other Answer here
NA
Total purchase and borrowing costs Answer here
$20,608 + $ 6,900
= $27,508
Page 60 of 69

Funds to complete
PURCHASE AND LOAN COSTS: AVAILABLE FUNDS:
Purchase price: Answer here
$ 490,000
Deposit if paid Answer here
$50,000
Lender application/valuation fees: Answer here
$ 4000
Cash savings: Answer here
$78000
Transfer stamp duty/transfer fee Answer here
$ 17,558
Sale proceeds: Answer here
0
Government registration fees Answer here
$ 1000
Gift: Answer here
0
Solicitors fees: Answer here
$ 1500
FHOG: Answer here
0
Other Answer here
$ 3400
Other:
Superannuation (Joint) Answer here
$ 90,000
Lenders Mortgage Insurance
Added to Loan Yes / No Answer here
No
Other: Answer here
0
TOTAL COSTS (A): Answer here
$ 517,458
TOTAL OWN FUNDS (D): Answer here
2,18,000
LOAN AMOUNT REQUESTED (B): Answer here
$440,000
OWN FUNDS REQUIRED (A–B) = C: Answer here
$ 77458
OWN FUNDS REQUIRED (A–B) = C Answer here
$77458
SURPLUS/SHORTFALL (D–C) Answer here
$ 140, 542
Page 61 of 69

Loan interview diary
Name(s) of client(s) present at interview
Answer here
Philip Brown
Jennifer Brown
Date of interview
Answer here
25th August 2020
Location of interview
Answer here
Capital Bank, Western Australia
Indicate all clients who were interviewed in person
Answer here
Philip Brown
Jennifer Brown
Glenn Brown
Do all of the clients appear to clearly understand English? Yes
If not, have the services of an interpreter been recommended? No
Do all of the clients clearly benefit from taking out this loan? Yes
If not, what inquiries have been made to ascertain the level of benefit to each party of the loan?
Answer here
The clients are clearly benefiting from the loan as the loan is available at the interest rate of 4.5% and also
the loan repayments will be made from salaries of both Philip and Jennifer. Also the loan is applied under
an offer because of which no processing has been charged from the clients. The couple will also be able to
get tax benefits on the interest charged over the home loan. The loan is beneficial in clear terms to all the
parties associated with loan.
Page 62 of 69

Are any clients acting as though they are under duress or other disability? No
Are any clients acting as though they are unsure of anything about the loan? No
Are any of the clients acting as though they are unable to comprehend their obligations? No
Are there any guarantors? Yes
If yes is answered to any of the above questions, have the clients been advised to seek
the services of a lawyer or financial adviser? Yes
Provide details of other pertinent information obtained during the loan interview which may be of interest
or of any unusual circumstances you may wish to record.
Answer here
The loan terms and conditions have been clearly defined and made understood to the parties. They have
been properly made understood about the loan requirements, interest rates and the repayment schedules.
It has been decided during the loan interview that clients wants to have the redraw facility for making
additional repayments without any penalties. They were also of the view that they may also balance off the
loan by making early payments or settling off the loan amount in around 10 year. Early settlement may
cause some charges to be paid to bank as they will be suffering interest loss.
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Appendix 3: Loan application
Cover sheet
Applicant name Mary Jane Smith
Broker name IG Group
Contact phone/Mobile [phone]
Email address [e-mail]
Solicitor/conveyancer details
Name Jones and Co
Address 22 High Street, City East, Western Australia
Contact phone/Mobile [phone]
Email address jonesandco.net.au
Loan summary
Loan amount $100,000
Loan term 30 years
Variable or Fixed rate 5.7% p.a
Principal and Interest or Interest only Principle and interest
Broker notes and recommendation
All the information provided by the client is fair and has been verified which ensures the ability of the client
to repay the loan amount on time. The client is having enough assets or resources to repay the amount on
time.
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Loan application details
Applicant 1 Applicant 2
Personal details
Surname Smith
Other names Mary Jane
Date of Birth 1/1/90
Marital Status Single
Number of Dependents None
Contact details Current address Tech park, high street, West Australia
Time at address 20
Phone (W)
Phone (H) None
Mobile [phone]
Email [e-mail]
Previous Address (if less than 2 years) None
Current employment details
Employer and contact details Hyperloop, 701 High Street, West
Australia
Job Title IT consultant
Employment type
(FT/PT/Casual/Self-employed) Full time
How long? 12 years
Previous employer (if less than two years) None
How long? None
Employment type
(FT/PT/Casual/Self-employed) None
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Applicant 1 Applicant 2
Income details
Gross salary per annum $85,000
Monthly net salary $7083
Social security $1000
Pension None
Other — specify None
Loan details
Loan product 1
Product name Hone loan Loan amount $100000
Loan term (years) 30 years Interest 5.7% p.a.
Loan purpose Property purchase
Options required No
Security details
Security property 1
Address of property 46 Walters Road, whitefield
Estimated value/purchase price $300,000
Property type land Number of bedrooms None
LVR 33.33% Approx. floor area (if known) Not available
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Assets and liabilities
Savings, term deposits and other accounts
Name of institution Account type Owner Current balance
First and Last Bank
Little Saving Building Society
Saving account
Fixed account
Applicant 1: 100%
Applicant 1: 100%
$22000
$18000
Investments including superannuation, life insurance, shares, trusts
Name of institution Investment type Owner Current balance
Superannuation — MySuper funds
BHP Group Ltd (Shares)
Land
Long term
Long term
Long term
Applicant 1: %
Applicant 2: %
$46000
$50000
$150000
Motor vehicles
Make and model Year built Owner Market value
Tesla car model 3 (4 years ago) 2016 Applicant 1: 100%
Applicant 2: %
$37,990
Other assets including personal effects, cash, boats, tools of trade etc.
Personal effects and household items
(furniture, electrical goods, clothing, jewellery, etc.) Applicant 1: 100%
Applicant 2: %
$126010
Others Applicant 1: %
Applicant 2: %
None
Total assets $450000
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Liabilities
Credit cards
Name of Lender Borrower Interest rate Limit Balance
My Door Furniture House Applicant 1: 100%
Applicant 2: %
None 20000 50000
Tesla car loan Applicant 1: 100%
Applicant 2: %
n/a Residual $15000
Other loans
Lender and loan type Borrower Loan repayment Limit Balance
First and Last Bank Applicant 1: 100%
Applicant 2: %
$150000 $25000 $95000
Total liabilities $160000
Surplus/deficiency $290000
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