FNSFMB403: Broking Options and Client Finance - Assignment Solution

This assignment solution for FNSFMB403 covers various aspects of presenting broking options to clients. It begins by highlighting the benefits of using a finance and mortgage broker, including personalized advice, access to numerous products, and time/money savings. The solution then differentiates between comparison interest rates and average annual interest rates. It also outlines the eligibility criteria for first home buyers, identifies risk factors associated with high-risk borrowers, and discusses the advantages of using video tutorials for internet banking. The assignment further explains three types of home loan products available in Australia: variable rate, fixed rate, and split home loans, and it references the ASIC's disclosure guide (RG 168) and the features of home loan establishment fees. The assignment also covers home loan negotiation from a borrower's point of view and concludes with a description of the online home loan application process.

FNSFMB403 PRESENT
BROKING OPTIONS TO
CLIENT

TABLE OF CONTENTS
ACTIVITY- 1..................................................................................................................................1
ACTIVITY- 2..................................................................................................................................1
ACTIVITY- 3..................................................................................................................................1
ACTIVITY- 4..................................................................................................................................1
ACTIVITY- 5..................................................................................................................................1
ACTIVITY- 6..................................................................................................................................1
ACTIVITY- 7..................................................................................................................................2
ACTIVITY- 8..................................................................................................................................2
ACTIVITY- 9..................................................................................................................................2
ACTIVITY- 10................................................................................................................................2
REFERENCES................................................................................................................................4

ACTIVITY- 1
There are major benefits of having the finance and mortgage broker which is that the
advice provided shall be personalised and of customized nature, it shall be offering millions of
products, will provide with the advantageous deal in terms of the expertise and will save time
and money of the client (BENEFITS OF USING A MORTGAGE BROKER, 2021).
ACTIVITY- 2
One of the most significant difference between the comparison interest rate and the
average annual interest rate is that in the prior the average rate is calculated and the other fees
and charges are above and additional to it. Whereas in the latter it can be observed that the
compounded form of the interest rates are calculated on the basis of the honeymoon rates, fes
and charges etc.
ACTIVITY- 3
The eligibility criteria for the first home buyers regarding the first home-owners grant is
that the person must be an individual who is above the age of 18 years and also must be an
Australian citizen who has the purchase date on or after 1st January, 2016. The person must not
have received any grant or must not own a house before as well.
ACTIVITY- 4
There are some risk factors that shows that the borrower is at the high level of borrowing
risks like the current financial position of the client, the credit score that the client is having
showing the creditworthiness, the employment status and if the client is unable to make the down
payment (What is a High-Risk Borrower and... Are You One? 2021).
ACTIVITY- 5
Using the video tutorials on the website for the internet banking is beneficial in several
ways where this improves the engagement ratio, facilitates better understanding, can convert the
customers more quickly and is a highly preferred source.
ACTIVITY- 6
Three types of home loan products that are available for the Australian borrowers:- Variable rate home loans- In this the rate of interest that is charged on the home loans
depends on the RBA official cash rate either impacted by changes in the market or that
made by the lenders.
1

 Fixed rate home loans- In this both the interest rate and the repayments are fixed from
the beginning and remains same for the tenure of the loan. This is good when the interest
rates are going up.
 Split home loans- This is hybrid combination of both the variable and the fixed rates and
this is the reason client is benefited in situations of high as well as the low interest rates
(Types of home loans, 2021).
ACTIVITY- 7
As per the ASIC's disclosure guide RG 168 it shall be specifying regarding the disclosure
obligations on the providers and issuers of the financial products. This requires the preparation of
the Product Disclosure Statement in which the retail clients shall be receiving the number of
documents disclosing each and every stage of the investment process and facilitates the better
understanding among the client. It must be following all the good disclosure principles like
timely, facilitates comparison, accurate etc.
ACTIVITY- 8
Features of home loan establishment fees:-
 The home loan establishment fees can also be regarded as the loan processing fees that is
charged upfront from the pockets of the person.
 This generally does not get reduced from the home loan balance of the individual.
 Usually this amount gets due once the application for home loan is approved and some
banks also waive the costs.
ACTIVITY- 9
The home loan negotiation from the borrower's point of view can be that they can
negotiate the best deal from the lender as possible in the market. This can be done by placing
yourself as the ideal borrower and position it in the best place. Apart from that know the market
and get the best and highest possible prices. It also shows that equal importance must be given to
the competitors prices so that best deal can be negotiated.
ACTIVITY- 10
The online home loan application process shall be beginning with filing the online form
and attaching the required documents, post that the fees shall be processed, further it is discussed
with the banks and the valuations are done of the documents. Then the sanctioning of the loan
2

takes place and finally the offer letter is being processed and the technical and legal check is
made. Finally, the agreement is signed.
3

REFERENCES
Online
BENEFITS OF USING A MORTGAGE BROKER. 2021. [Online] Available through:
<http://www.mortgageadvantage.com/benefits-of-a-broker.php>
What is a High-Risk Borrower and... Are You One? 2021. [Online] Available through:
<https://www.myfico.com/credit-education/blog/high-risk-borrower-characteristics>
Types of home loans. 2021. [Online] Available through: <https://www.aussie.com.au/plan-
compare/aussies-own-home-loans/choosing-the-right-home-loan-for-you.html>
4