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 and their financial and employment information.

Written
CIVMB_AS_v5A2

Certificate IV in Finance and Mortgage Broking
(CIVMB_AS_v5A2)
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Student identification (student to complete)
Please complete the fields shaded grey.
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Written assignment overall result (assessor to complete)
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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 Demonstrated Not applicable
Task 4 — Reasonable enquiries Demonstrated Not applicable
Task 5 — First Home Owners Grant and home buyer assistance schemes Demonstrated Not applicable
Task 6 — Professional network and loan settlement process Not yet demonstrated Not applicable
Task 7 — Interest rates Demonstrated Not applicable
Section 2: Case study 2 — Richard and
Pauline Jackson
Task 8 — Establishing level of financial knowledge Demonstrated Not applicable
Task 9 — Responsible lending obligations Not yet demonstrated Not applicable
Task 10 — Self-employed special considerations Demonstrated Not applicable
Task 11 — Advising on strategies 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 Demonstrated Not applicable
Section 3: Case study 3 — Mary Jane
Smith
Task 15 — Prepare and check a loan application Demonstrated Not applicable
Section 4: Working in financial services
Task 16 — Financial services legislation and industry codes of practice Demonstrated Not applicable
Task 17 — Design a document Demonstrated Not applicable
Task 18 — Applying principles of professional practice to work in the financial
services industry Demonstrated Not applicable
Task 19 — Develop and maintain in-depth knowledge of products and
services used by an organisation Demonstrated Not applicable
Please note: To pass this written assignment, you will need to be assessed as DEMONSTRATED in
either your first submission or your resubmission in all tasks above.
Task feedback
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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. To finalise this assignment you need to revisit the
above tasks and then resubmit for further assessment. Please leave the assessor comments intact
and use a different colour and font for your additional work.
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Before you begin
Read everything in this document before you start your written assignment for Certificate IV in
Finance and Mortgage Broking (CIVMB_ASMG_v5A2).
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About this document
This document is the written assignment — half of the overall Written and Oral Assignment.
This document includes the following parts:
• Instructions for completing and submitting this assignment
• 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 assignment within your enrolment period. Your study plan is in the KapLearn
Certificate IV in Finance and Mortgage Broking (CIVMBv5) subject room.
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Instructions for completing and submitting the
written assignment
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Completing the written assignment
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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 assignments.
• Name your file as follows:
Studentnumber_SubjectCode_Assignment_versionnumber_Submissionnumber
(e.g. 12345678_CIVMB_AS_v5A2_Submission1).
• Include your student ID on the first page of the assignment.
Before you submit your work, please do a spell check and proofread your work to ensure that
everything is clear and unambiguous.
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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.
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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 assignment 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 written assignment
Only Microsoft Office compatible written assignments 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 assignment as a PDF.
The written assignment must be completed before submitting it to Kaplan Professional Education.
Incomplete written assignments will be returned to you unmarked. The written assignment must
be submitted together with the oral assignment. If you do not submit both completed assignments
at the one time it will be returned to you unmarked.
The maximum file size is 20MB for the written and oral assignment. Once you submit your
written assignment for marking you will be unable to make any further changes to it.
Once you submit your written assignment for marking you will be unable to make any further
changes to it.
You are able to submit both assignments earlier than the deadline if you are confident you have
completed all parts and have prepared a quality submission.
Please refer to the Assignment submission/resubmission videos in the Assessment section of
KapLearn under your ‘Assignment Enrolment’ for details on how to submit/resubmit your written
assignment.
Your Written Assignment and Oral Assignment must be submitted together on or before your
due date. Please check KapLearn for the due date.
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The written assignment marking process
You have 26 weeks from the date of your enrolment in this subject to submit your
completed assignment.
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 assignment and return it to you in the
Certificate IV in Finance and Mortgage Broking (CIVMBv5) subject room in KapLearn under the
‘Assessment’ tab.
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Make a reasonable attempt
You must demonstrate that you have made a reasonable attempt to answer all of the questions in
your written assignment. Failure to do so will mean that your assignment 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 deadline to submit your completed written and oral assignment.
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How your written assignment is graded
Assignment 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.
Your assessor will follow the below process when marking your assignment:
• 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 assignment.
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‘Not yet demonstrated’ and resubmissions
Should sections of your assignment 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 will be in a better position to gauge the quality and nature of your changes. Ensure
you leave your first assessor’s comments in your assignment, 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 assignment 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 assignment is one of two assessments required to meet the
requirements of the units of competency.
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We are here to help
If you have any questions about this written assignment 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
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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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Assignment tasks (student to complete)
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Task 1 — Key terms, gathering and documenting client information
1. Complete the ‘Key terms’ (located at the end of the written assignment in Appendix 1).
2. Using the information provided in Case study 1, complete the ‘Client information collection
tool’ (located at the end of the written assignment 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 assignment
submission. This will assist your assessor with providing feedback on your written and oral
assignment 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
In the Funds to Complete Statement the deposit has not been
paid yet and personal superannuation has nothing to do with the
property purchase so both of these items need to be deleted.
The cheque and savings account balances are to be included.
The assignment wants you to state the LMI premium amount
and this then gets added to the $440K loan amount. You will
then need to do your sums again.
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 assignment 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 has 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, dependents, 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.
Repayment requirements based on the loan required
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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 wanting a 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 provide all the repayment requirements as the term loan is significant period.
However, the set off charges apply to the client on early set off 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 often 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 good
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 do not currently have any dependents. Should they start a family, it will have an impact
on their earnings.
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)
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Answer here
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
1) The income for the borrowers you have used in the
Servicing calculator is wrong which gives you the
wrong amount they could potentially borrow. This
amount is different to what you have included as your
answer. You also need to do the Genworth LMI
Premium Estimator calculator the get the correct LMI
amount and attach this printout as well
Question(s) that need to be resubmitted (if required) 1
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 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 enquiries as the lender may find necessary for granting the loan.
Six enquiries 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 can afford 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 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 than $ 650,000 are allowed with full exemption on the transfer duty. For availing this
exemption, they must 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 Homeowner Grant scheme through the bank or financial institution
from which loan is borrowed. The application must 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 state’s 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 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
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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 must be clarified and assessed
during the discussions with client. The clients could be asked about their future 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.
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 must
provide them benefits associated with the purchase of certain property or land. They must 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’s Policies 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 provide 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.
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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/conveyancer
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 after 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 listed such as council rates and other
taxes associated with the property.
Assessor feedback for Task 6 — Professional network and loan settlement process
Q1) What parties are involved in the sale and transfer of the
property
Question(s) that need to be resubmitted (if required) 1
First submission Not yet demonstrated
Resubmission (if required) Not applicable
Page 36 of 91

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.
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)
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Answer here
a) I am required to research and identify the different options that are available over loans for
meeting the requirements of loan. I can make research over the options over online
sources that provide information about the different options available. Comparison must
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, which means your payments do not
change too.
2) It allows the borrower to have fixed amount of expense every year.
Disadvantages
1) Cannot benefit from fallen interest rates.
2) There may be restrictions on making additional payments.
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
(Insert Feedback)
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Demonstrated
Resubmission (if required) Not applicable
Page 38 of 91

Section 2: Case study 2 — Richard and Pauline Jackson
Page 39 of 91

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) and a ‘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
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Assignment tasks (student to complete)
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Task 8 — Establishing level of financial knowledge
1. What communication skills would you 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 relationship 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 are 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 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 because if the
quality will not be good then the consumer will not like it.
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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 with 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 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
(Insert Feedback)
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Demonstrated
Resubmission (if required) Not applicable
Page 43 of 91

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 if they couldn’t be
ready to meet the accompanying prerequisites and the targets for taking the necessary advance.
Here borrower confronted substantial hardship that implies it becomes too 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 if 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.
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
Page 44 of 91

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% 1520 300000
Total $300000
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 $1520. So, after debt consolidation with One State Bank, Richard & Pauline
monthly savings will be = ($3117 - $1520-) = $1597.
Assessor feedback for Task 9 — Responsible lending obligations
Q#) Task requires you to refinance debts into
their home loan with two splits, one for the
existing home loan $270,000 and a second
split for all other debts. $30,000
Q4) Once 3 is completed you will need to check
sums for 4.
Question(s) that need to be resubmitted (if required) 3 & 4
First submission Not yet demonstrated
Resubmission (if required) Not applicable
Page 45 of 91

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.
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
Page 46 of 91

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 of 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 to take loan from the bank under the Low- doc loan system.
Assessor feedback for Task 10 — Self-employed special considerations
(Insert Feedback)
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Demonstrated
Resubmission (if required) Not applicable
Page 47 of 91

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 be 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 offices who
counsel the borrower however they do not 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 occasionally be 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
Offset account
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Demonstrated
Resubmission (if required) Not applicable
Page 48 of 91

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. If they
cannot 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.
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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 credit report? (150 words)
Student response to Task 12: Question 5
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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 is not right, and we have to correct an inappropriate information with viable demonstrate.
These are the alternative route for Richard and Pauline.
Assessor feedback for Task 12 — Impact of credit history
Q1)Transunion is not in Australia. In addition to Experian please
advise the names of the two largest Australian Credit bureaus
Q4) Under the Privacy Act what must a credit bureau tel the
borrower if they decline an application due to the content of the
credit bureau report
Q5) If the credit is not suitable for prime lenders who else might
approve the loan
Question(s) that need to be resubmitted (if required) 1,4,5
First submission Not yet demonstrated
Resubmission (if required) Not applicable
Page 51 of 91

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 Jackson 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
Page 52 of 91

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.
(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 improve these 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, if 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 do not represent either
gathering to advocate their position. If a complaint does not 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 could not 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.
Page 53 of 91

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.
Assessor feedback for Task 13 — Dispute resolution
Task asks you for the amount for a direct financial loss for an
owner occupied consumer home loan
Question(s) that need to be resubmitted (if required) 3
First submission Not yet demonstrated
Resubmission (if required) Not applicable
Page 54 of 91

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 could remark through the drive and
loan lender will get the notice can be roll out that improvements before they are 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 Demonstrated
Resubmission (if required) Not applicable
Page 55 of 91

Section 3: Case study 3 — Mary Jane Smith
Page 56 of 91

Task 15 — Prepare and 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
complimented you 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 assignment.
Page 57 of 91

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’s personal 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 real estate 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
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
Page 58 of 91

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. Refer to the ‘Example of an Organisations Policies 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 organisational credit 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.
(c) Industry Code of Practice.
Student response to Task 15: Question 4(c)
Page 59 of 91

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 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 Demonstrated
Resubmission (if required) Not applicable
Page 60 of 91

Section 4: Working in financial services
Page 61 of 91

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.
(c) Code of Practice.
Student response to Task 16 Question 2(c)
Page 62 of 91

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). After 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 must. 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 Demonstrated
Resubmission (if required) Not applicable
Page 63 of 91

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’.
Student response to Task 17
Page 64 of 91

Assessor feedback for Task 17 — Produce a document
(Insert Feedback)
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Demonstrated
Resubmission (if required) Not applicable
Page 65 of 91

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
Page 66 of 91

(Insert Feedback)
Question(s) that need to be resubmitted (if required) (List question numbers)
First submission Demonstrated
Resubmission (if required) Not applicable
Page 67 of 91

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
Page 68 of 91

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 based on ratings, awards etc.
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)
Page 69 of 91

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.
(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 Demonstrated
Resubmission (if required) Not applicable
Page 70 of 91

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
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.
Lessor and
lessee
A lessor is basically somebody who gives leases a rental to somebody else. As
such, a lessor is the proprietor of an asset that is leased under an agreement to a
lessee. The lessee makes one-time instalments to the lessor in return for the use
of the asset.
Mortgagee and
mortgagor
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
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 When one party promises to take on the borrower’s debt obligation that the
borrower defaults. They can be liable for only a portion or all the debt.
Loan contract 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
This type of payment allows you to authorise the bank to make payments, for a
set amount at regular intervals on your behalf. Together with any fee that may
apply your account will be debited for payment.
When setting periodical debit authority on account, VFS requires PPA to be filled
and signed by customer before periodical payment authority could be set over
nominated account.
Page 71 of 91

Signed
application
form
A legal form signed/ initialled by the party to confirm an accept that they are
applying for the property etc and informations mentioned in the application form
are true. This signature also allows the lender to do any check with regards to
referencing.
3. In your own words, and using the grid below; describe:
The negotiation
process
The process whereby the parties attempt to achieve an agreement on matters of
mutual interest. For example, property prices.
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 under stability 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 72 of 91

Appendix 2: Client information collection tool/Fact finder
Appointment date: 2nd September 2020
Appointment time: 3.30pm
Applicant 1 Applica
nt 2
Surname Brown Brow
n
Other names Phillip Jennif
er
Contact details Address 12/22 Wentworth Lane,
Highville WA
12/22 Wentworth Lane,
Highville WA
Phone (W)
Phone (H) W: 9800 1111
H: 9123 2121
W: 9910 2033
H: 9123 2121
Mobile Answer here Answer here
Email [e-mail] [e-mail]
Employment Ace limited 101 Tech
city
How long? Since October 2005 (15 years) Since
Marc
h
2006
(14
years)
Previous employer (if less than two years) NA NA
How long? NA NA
Employment type
(FT/PT/Casual/Self-employed) Full time Full
time
Gross income (p.a.) 58,000 p.a 95,00
0 p.a
Number of dependants 0 0
Page 73 of 91

Motor vehicles Holden commodore SS 2007 Kia
Cerat
o
Sport
2015
Loan purpose Home loan –
purchase
home
Purchase price/Valuation $490,000
Deposit on property $50,000
Loan amount $440,000
Borrowing capacity (using Genworth
serviceability calculation) $941,585.00
Page 74 of 91

Assets and liabilities
Assets
Details Market value Details Monthly payments Amount owing
Owner Occupied Property at: Answer here Mortgage with: Answer here Answer here
Investment Property at: Answer here Mortgage with: Answer here Answer here
Cash at bank
(includes fixed deposits) $79,600 Car leasing Answer here Answer here
Other cash
(includes offset accounts) $1600 Personal loans
1. Capital Bank personal
loan
$180 $5,600
Deposit paid on property (only if
paid) $50,000 Overdraft Answer here Answer here
Motor vehicles:
1.
2.
1. $25,000
2. $9000
Other loans:
1.
2.
Answer here Answer here
Personal effects Credit card limit:
$4000 $200 Answer here
Business value (if self-employed) Answer here Credit card limit:
$5000 $1,600 Answer here
Shares and investments Answer here Other: Answer here Answer here
Superannuation Phill: $28,000
Jenn: $62,000
Other: Answer here Answer here
Other assets (give details) Household
effects
$40,000
Other: Answer here Answer here
Total assets $293,600 Total liabilities $1980 $5,600
Surplus/deficiency: (Total assets less Total liabilities) $Answer here
Total Assets = $293,600
Total Liabilities = $5600+$1980 = $7580
Surplus = $286,020
Page 75 of 91

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 76 of 91

Needs analysis
1 Name of your current lender? Capital bank
2 What type of mortgage loan do you have? Personal
loans
3 Why did you choose this particular loan and lender? Best suits the
borrower
4 What is the interest rate? 3%
5 What are your payments? Amount $180
6 Frequency Monthly
7 Do you know the fees and charges? No
8 What is your proposed purpose for the loan you are applying for? Purchase of a
house
9 Branch access available with current lender Western
Australia
10 Internet banking available with current lender Capital bank
11 Phone banking available with current lender Capital bank
12 Lenders not to be considered Answer here
13 Type of loan sought Home loan
14 Preferred Interest rate range 3%-6%
15 Payment frequency Fortnightly
16 Redraw Redraw
facility for
making
additional
repayments
at any time of
the loan.
17 Offset Offset Facility
available
18 Salary crediting $153,000
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19 Low fees and charges No additional
charges
Page 78 of 91

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 is 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 79 of 91

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%
Page 80 of 91

Registration of mortgage Answer here
$1000
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 81 of 91

Funds to complete
PURCHASE AND LOAN COSTS: A
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 82 of 91

Loan interview diary
Name(s) of client(s) present at interview
Answer here
Phillip Brown
Jennifer Brown
Date of interview
02 September 2020
Location of interview
Capital bank, Western Australia
Indicate all clients who were interviewed in person
Answer here
Phillip Brown
Jennifer Brown
Glenn Brown
Do all of the clients appear to clearly understand English? Y
If not, have the services of an interpreter been recommended? N
Do all of the clients clearly benefit from taking out this loan? Y
If not, what inquiries have been made to ascertain the level of benefit to each party of the loan?
Answer here
Are any clients acting as though they are under duress or other disability? N
Are any clients acting as though they are unsure of anything about the loan? N
Are any of the clients acting as though they are unable to comprehend their obligations? N
Are there any guarantors? Y
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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? Y
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 want 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
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Cover sheet
Applicant name Mary Jane Smith
Broker name IG group (Valerie)
Contact phone/Mobile [phone]
Email address [e-mail]
Solicitor/conveyancer details
Name Jones and Co
Address 22 High street, City West Australia
Contact phone/Mobile [phone]
Email address [e-mail]
Loan summary
Loan amount $100,000
Loan term 30 years
Variable or Fixed rate Variable 5.7% p.a
Principal and Interest or Interest only Principle and interest
Broker notes and recommendation
Answer here
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 A
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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
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Applicant 1 A
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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
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
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Product name Hone loan Loan amount $100,000
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 Answer here
LVR 33.33% Approx. floor area (if known) Answer here
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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%
$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:
100%
$46000
$50000
$150000
Motor vehicles
Make and model Year built Owner Market value
Tesla car model 3 (4 years ago) 2016 Applicant 1:
100%
$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%
$126010
Others
Applicant 1: %
Applicant 2: %
None
Total assets
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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
Surplus/deficiency
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