Certificate IV in Finance Assignment

This assignment for the Certificate IV in Finance and Mortgage Broking includes various tasks related to financial assessments, client interactions, and mortgage recommendations. Students are required to analyze case studies, complete client information collection tools, and provide detailed proposals based on the financial situations of clients. The assignment emphasizes understanding responsible lending obligations and the necessary documentation for mortgage applications.

Assignment
Certificate IV in Finance and Mortgage Broking
(CIVMBv1_AS_A2)
Student identification (student to complete)
Please complete the fields shaded grey.
Student number 10430965
Assignment result (assessor to complete)
Result — first submission (Details for each activity are shown in the table below)
Not yet competent
Parts that must be resubmitted:
1, 6.1, 6.2a, 14.2, 14.4
Result — resubmission (if applicable)
CIVMBv1_AS_A2

Result summary (assessor to complete)
First submission Resubmission (if required)
Task 1 Not yet demonstrated Demonstrated
Task 2 Demonstrated Demonstrated
Task 3 Demonstrated Demonstrated
Task 4 Demonstrated Demonstrated
Task 5 Demonstrated Demonstrated
Task 6 Not yet demonstrated Demonstrated
Task 7 Demonstrated Demonstrated
Task 8 Demonstrated Demonstrated
Task 9 Demonstrated Demonstrated
Task 10 Demonstrated Demonstrated
Task 11 Demonstrated Demonstrated
Task 12 Demonstrated Demonstrated
Task 13 Demonstrated Demonstrated
Task 14 Not yet demonstrated Demonstrated
Task 15 Demonstrated Demonstrated
Task 16 Demonstrated Demonstrated
Feedback (assessor to complete)
A very good first attempt at the assignment. There are a few questions that require further
work: 1, 6.1, 6.2a, 14.2, 14.4. Please be guided by my comments at each task and refer to the
self-study material for reference.
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Before you begin
Read everything in this document before you start your assignment for Certificate IV in Finance and
Mortgage Broking.
About this document
This document includes the following parts:
• Instructions for completing and submitting this assignment
• Results and feedback
• Section 1: Case study 1 — Malcolm and Susan Johnson
• Section 2: Case study 2 — John Simpson
• Appendix 1: Fact Finder
Instructions for completing and submitting this assignment
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
assignment within your enrolment period. Your study plan is in the KapLearn Certificate IV in Finance and
Mortgage Broking subject room.
Completing the assignment
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_Submissionnumber
(e.g. 12345678_DFP1B_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.
The assignment
This assignment is split into 16 Tasks, over 3 Sections. To finish this assignment, you must complete all
16 tasks.
The information and data you need to complete Sections 1 & 2 is presented in case studies at the beginning
of those sections.
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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.
Additional research
When completing the Client Information Collection Tool in Appendix 1, assumptions are permitted although
they must not be in conflict with the information provided in the Case Study.
You may also be required to source 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 assignment
You must submit your completed assignment in a compatible Microsoft Word document.
You need to save and submit this entire document.
Do not delete/remove any sections of the document template.
Do not save your completed assignment as a PDF.
The assignment must be completed before submitting it to Kaplan Professional Education.
Incomplete assignments will be returned to you unmarked.
The maximum file size is 5MB. Once you submit your assignment for marking you will be unable to make
any further changes to it.
You are able to submit your assignment earlier than the deadline if you are confident you have completed
all parts and have prepared a quality submission.
The assignment marking process
You have 12 weeks from the date of your enrolment in this subject to submit your completed assignment.
Should your assignment be deemed ‘not yet competent’ you will be give an additional four (4) weeks to
resubmit your assignment.
Your assessor will mark your assignment and return it to you in the Certificate IV in Finance and
Mortgage Broking subject room in KapLearn under the ‘Assessment’ tab.
Make a reasonable attempt
You must demonstrate that you have made a reasonable attempt to answer all of the questions in
your 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 assignment.
How your 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 competent or not yet competent.
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.
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‘Not yet competent’ and resubmissions
Should sections of your assignment be marked as ‘not yet competent’ 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 competent’.
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.
We are here to help
If you have any questions about this 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 — Malcolm and Susan Johnson
Background
Malcolm and Susan Johnson 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 also saving for their own home.
They have been looking at properties for the last month and one has really caught their eye, although the
bathroom and ensuite could do with a little work. They had planned on shopping around the various
lenders themselves to find the most appropriate loan for their needs, but as they both work, they have little
time to do the research necessary. And, as they both admit, they have limited knowledge of the loan
products available and might have difficulty in evaluating the options.
They have not paid a deposit at this stage.
On a suggestion from Susan’s brother (one of your former clients) they have contacted you about the loan.
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 12, 43 Seaside Parade, Coastville, <Your State>
Purchase price: $490,000
Description: 2 bedroom strata title unit
Agent details: Steven Allstone
Phone: [phone]
Mobile: [phone]
The couple
Current address: Unit 12, 22 Wentworth Lane, Highville, <Your State>
Malcolm and Susan have lived there 5 years
Home phone: [phone]
Funds position
Purchase price: $490,000
Estimated costs: $20,000
Total required: $510,000
Loan: $430,000
Own contribution: $80,000
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Assets
Capital Bank savings account (joint) $92,000
Capital Bank cheque account (joint) $1,600
Holden Commodore SS, eight years old (Malcolm) $25,000
Suzuki Baleno, seven years old (Susan) $9,000
Superannuation — Capital Bank (Malcolm) $28,000
Superannuation — Capital Bank (Susan) $62,000
Household effects (insured value) $40,000
Liabilities
Capital Bank personal loan (Malcolm) $3,600
(repayments $180 p.m.)
Capital Bank Visa card (Malcolm) $200
(limit $2,000)
Capital Bank Visa card (Susan) $600
(limit $3,000)
All debts have been repaid according to arrangements. In relation to the credit card debt, the minimum
monthly commitment should be calculated at 3% of the credit limit.
Income/employment
Malcolm (date of birth 21/2/86)
Position: Team leader (full time)
Employer: ACME Limited
101 City Rd, Westside, <Your State>
Phone: [phone]
Income (gross): $55,000 p.a., net monthly income: $3,705
Employer contact: Alison Johnson, HR Manager
Length of service: 10 years
Driver’s licence: 8855KL
Email: [e-mail]
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Susan (date of birth 8/10/87)
Position: Accountant (full time)
Employer: Phones R Us
804 High Street, City East, <Your State>
Phone: [phone]
Income (gross): $91,000 p.a., net monthly income: $5,629
Employer contact: Stan Adams, HR Manager
Length of service: 12 years
Driver’s licence: 17016C
Email: [e-mail]
Interest income
Approximately $40 per month from $12,000, remaining in savings account after home loan deposit. Interest
4% p.a.
Solicitor’s details
Jones and Co
22 High Street, City East, <Your State>
Phone: [phone]
Fax: [phone]
The loan requirements
• 30-year term
• Premium Option home loan
• standard variable interest rate @ 5.57%
• proposed settlement date — 6 weeks time
• ability to make additional payments from time to time without penalty
• fortnightly repayment option
• redraw facility
• funds access via card
• offset facility.
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Assignment tasks (student to complete)
Task 1 — Initial disclosures
Following a personal introduction, and before you begin gathering information about the clients’ existing
financial situation or needs, there are certain disclosures you are required to make as a finance broker
regarding the way you are remunerated and the range and limitation of your services.
Identify and describe three (3) of these disclosures. (200 words)
Student response to Task 1
The three disclosures prior to the gathering the information from the client are:
1. How the intermediary is to be paid: The process that would be used for the payment to the
intermediaries is to be laid down so that the client has adequate knowledge about the mode of
payment and how it would reduce the time.
2. Who the intermediary represents: It is essential to reveal the client about who the intermediary
represents so that the client has knowledge about whom they are paying the money and does not
go missing.
3. Who the intermediary pays for the referrals: The referrals are paid by the intermediary to the
individuals who are making the referrals and bringing in new clients.
The three disclosures that requires to be mentioned are:
1. Credit Guide: It provides primary data regarding the broker to the consumer. The time of providing
the credit guide is dependent upon the kind of entity the broker is and the what credit operations,
the broker engages in but would be specifically before initiating in the credit operations of the
consumers.
2. Quote: Quote describes the consumers about the anticipated costs before making use of the
services if the fee of the consumer is charged. Before initiating the credit assistance, a quote
requires to be given to the consumers and the consumer requires to accept the quote by signing
the quote.
3. Proposal Document: A proposal document provides the cost to the consumers of making use of the
services that are inclusive of the commission of the broker that they may receive. A proposal
document requires to be given to the consumer during the same time of credit assistance given to a
consumer.
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Assessor feedback: Resubmission required?
You have correctly identified the documents to be provided to the
client at different stages however the question asks you to identify
and describe three disclosures you should make prior to gathering
information from client, not the documents. What disclosures
particularly are included in the Credit Guide? Topic 3.1 page 20 may
also assist.
Refer to MFAA Code Of Practice 2014 on its website and ASIC website:
http://asic.gov.au/regulatory-resources/credit/responsible-lending/
responsible-lending-disclosure-obligations-overview-for-credit-
licensees-and-representatives/
Yes
Task 2 — Gathering and documenting client information
Complete the Client Information Collection Tool located at the end of the assignment in Appendix 1 using
the information provided in Case Study 1.
Note: Any assumptions you make should be listed, and not be in conflict with the case study information
already provided.
You have demonstrated that you are competent regards to this Task.
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Task 3 — Assessing the clients’ situation
1. Based on the information provided in the case study and using the tools available to you
(e.g. loan calculators, including those available on lenders’ websites), provide an assessment of
the clients’ borrowing ability and ability to service the loan they require.
Consider and comment on issues such as:
• borrowing ability in relation to the loan required
• deposit requirements for the loan required
• repayment ability based on the loan required
• likelihood that the clients will be able to meet their financial obligations
• do they require Lenders Mortgage Insurance (LMI), and if so, how much will it cost
• 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)
Student response to Task 3: Question 1
The borrowing capability of Malcolm and Susan cam ne understood easily by assessing their asset and
liabilities statement. It is known that the couple has been married for over 5 years and has being living in a
rented house. They are in the idea of purchasing their own house and therefore has been looking for
various options of loan. They wants to purchase a property that is situated in 43 Seaside Parade Coastville
that has a cost of $490,000 and the Gant name is Steven Allstone. It is seen that the price of the property is
$490,000 and the anticipated costs associated to the property is $20,000 and thus the total cost comes to
$510,000. The amount of loan they want to receive is $430,000 and they have the idea of making a down
payment of $80,000.
The asset consists of $92,000 in the savings account of capital bank which has a value of $1,600 in the
cheque account of capital bank, superannuation of value of $90,000 for the couple as a both. They have
two cars for each of the couple with a value of $34,000 and value of household comprising of $40,000 and
the liabilities consists of the personal loan of $3600 and an outstanding credit card amount of of $800 for
the couple. Malcolm is working in ACME Ltd as a team leader and has annual income of $55,000 and Susan
is an accountant in Phones r Us with an annual salary of $91,000. It has been observed that the total annual
salary of the couple as a whole is $146,000 and the loan interest of 5.575 that results to $2460 per month
and therefore the amount can be paid with ease by the couple. The down payment value of $80,000 can be
paid easily by the couple by observing their annual salary along with the savings account balance and the
superannuation that they possess. The ability of borrowing for the couple is accurate in accordance to their
income as they can bring forth the down payment payment of $80,000 and the rest of the balance can be
taken as a loan as they have the ability to pay for the interest in a simpler manner.
The requirements of deposits of the required loan consists of the identity proof of the person who is taking
the loan, their proof of address, photo, salary slip and government witnessed guarantors, authenticity proof
of the property, collateral securities and and the bank statement of the person who is undertaking the loan.
The ability of repayment is on the basis of the amount of loan required is simple for the couple as they
have adequate bank balance along with the superannuation and their salary is quite good for the
repayment of the loan. It is observed that they have been married for more than 5 years and have been
working for over 12 years so it is estimated that as they are young they have the ability to work for a longer
period of time unless they are down with sickness or any accidents and therefore by looking at the tenure
of loan which has been 30 years, they can pay for their loan in an easy manner. It is even seen that the rate
of interest falls along with the duration of the loan and repayment and therefore the accrued interest along
with the amount of principal annually would be around $2460 per month, which is pretty moderate on
comparison to their monthly income.
The couple have the ability to meet their financial obligations easily as they have a steady income rate
along with the benefit of being young which provides them with the chance to raise their income in the
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coming years. It is even possible that they may be able to pay off their loan long before the loan repayment
tenure.
They would even be looking for a lender’s mortgage insurance as their bank deposits and assets are quite
good and in case of any sickness and accidents to them, the lender may not not be able be able to pay for
the amount of loan out of their collateral securities. By observing the loan value and the property price, the
lender’s mortgage insurance value will come up to $5246. The lender’s mortgage loan may not be suitable
for the couple if a guarantor is provided to the bank who would be liable to pay for the loan in case the
couple are unable to make the payment.
There are potential threats related with the life of an individual as there are various risks like accidents and
death that might occur at any point of life and hence these risks can have an impact on the couple to meet
their financial obligations.
Assessor feedback: Resubmission required?
You have demonstrated that you are competent regards to this Task. No
2. Stress testing the loan repayments
Most lenders add 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 Malcolm and Susans loan repayments be,
do you think they would be able to cope with the extra repayments, and what could you recommend
that may remove this consideration as a risk factor?
Student response to Task 3: Question 2
If the lender raises the rate of interest by 3%, then the new rate of interest would come up to 8.57%.
Hence, the monthly repayment amount comes up to $3328. Is is observed that at the present financial
position of Mr and Mrs Johnson that they may face certain issues to pay back the desired interest as their
total net monthly income comes up to $9334 with an additional income that is received as interest from
the superannuation and the account of the capital savings. The value they gain on a monthly basis is not
adequate to pay for additional interest as they need to pay for their monthly expenses and with the
increase in the rate of interest as they will have a burden on their head.
In order to decrease the risk the suggestion that can be provided to the couple are by lowering the loan
term from 30 years to some other year of tenure thereby decreasing the extra burden of the additional
interest rate. The other alternative for the couple is consolidating the two loans so that they become a
combined one and thereby the rate of interest gets combined as well and in a way lowering the rate of
interest. In this scenario, they can combine the home loan with the personal loan that has been taken by
Malcolm so that the rate of interest lowers. The option of a maintaining a proper credit score by paying for
the interest within the stipulated time might influence the lenders to terminate the additional burden of
interest from the couple.
Assessor feedback: Resubmission required?
You have demonstrated that you are competent regards to this Task. No
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Task 4 — 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 is ‘not unsuitable’ for the borrower.
Identify and describe the key factors that must be taken into consideration when assessing whether a
credit facility is ‘not unsuitable’ for a borrower. (100 words)
Student response to Task 4
The significant factors that requires to be considered while evaluating whether a credit facility is
inappropriate for the borrower are stated below:
(i) It meets the requirements and objectives of the consumer
(ii) The consumer has the ability to repay the loan without suffering substantial problem
The base line has established that the loan is not ideal by discovering the ability of the couple to pay for the
loan by verifying the PAYG income by reference to the payslips and authenticating the income that is self-
employed with reference to the tax returns and the statements from the banks.
Assessor feedback: Resubmission required?
You have demonstrated that you are competent regards to this Task. No
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Task 5 — 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 5
It is essential to determine the the reasonable enquiries about the objectives of the borrower. The six
reasonable enquiries that requires to be asked to the couple to gain knowledge are as follows:
(a) The level of fixed expenses of the couple like the repayment of the existing debt, rent, recurring
expenses like insurance etc.
(b) The credit history of the consumer
(c) Whether the couple looks for a specific characteristics of a product and gains knowledge about the
costs of these features and any extra risks
(d) The ability of the consumer to gain knowledge about the credit contract.
(e) The factors that are geographic like the remoteness, which may look for the consideration of the
distinct issues like the increasing living costs in comparison to the urban areas.
(f) The degree to which any existing debts are to be repaid from the credit that has been advanced.
(g) The asset of the consumer that are inclusive of their nature as whether they produce value and
income.
These enquiries are significant because it is important gain knowledge about the borrower so that this
comprehensive knowledge can be helpful to us in preparing a statement of loan that would provide benefit
to the consumer and would provide maximum output with a minimum level of rate of interest and risk
related with the loan. It should even be noted that the loan and the amount of loan that would satisfy with
the consumer’s interest.
Assessor feedback: Resubmission required?
You have demonstrated that you are competent regards to this Task. No
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Task 6 — Recommendations
Note: Incorrect or uninformed advice can lead to significant financial detriment for your client and lead to
possible complaints against you for misleading or deceptive and misleading conduct. Therefore, all three (3)
questions of this task are ‘critical’ and you must demonstrate the required knowledge in each to be
deemed competent.
1. Based on the information presented in the case study, prepare a written proposal to your clients.
(750 words)
The style and language used in the proposal should be appropriate to the case study client’s level of
understanding. It should be clear and concise, and written in language that is easy to understand,
while still remaining professional in its presentation.
You may base your response to this part of the assignment on either your knowledge of the products
currently offered by your own organisation, or the products offered by a lender you have researched.
In your proposal, you should include:
• a summary of your understanding of the clients’ needs
• a summary of their current financial position
• the product options you have considered to meet their needs
• the option you recommend and the reasons for the recommendation. Explain how the
recommended product meets the clients’ needs
• disclosures applicable to the situation (a summary of likely applicable disclosures is adequate).
Consider disclosures that are required by both legislation and by lenders codes of practice.
Note: List any assumptions you have made about the clients and their situation in order to complete this
part of the assignment. There are no rules regarding the format. Please use the format that best suits
you. Note that the credit guide in your resources is not a ‘written proposal’.
Student response to Task 6: Question 1
The written proposal that is provided in the case study has discovered that Malcolm and Susan have been
married for 5 years and have been living in a rented house since their marriage. They are both working and
it is seen that Malcolm works in ACME Ltd earning an annual salary of $ 55,000 and his wife Susan works as
an accountant in Phone R Us and earns $91,000 annually. They have the intention of purchasing a house
that would meet their demand and have selected a two bedroom house at a desired location. The cost of
the property id $490,000 and they are in the mind of taking a loan of $430,000 and the rest of the amount
will be paid by the couple from their savings. The background of the client has revealed that they are in the
requirement of a loan from the lender that would provide them with the lowest amount of interest rate
and the one that is appropriate with them.
The present financial reports that have been provided by the couple shows that they are both earning and
have an annual salary combined of $146,000. It is even seen that they have a joint savings of $92,000 in
their savings account and $1600 in their cheque account. The overall household asset consisting of the
superannuation of the couple is $130,000. They both have a car each that has an overall value of $34,000.
The liabilities of the couple consists of the personal loan of $3600 and they have a credit card balance of
$200 and $600 each for the couple. By observing their financial statements it is noticed that they have very
less liabilities and have effective amount of income and assets that are sufficient enough to undertake a
loan for the house and have the capability to pay for their debts in a timely manner.
The product that is likely to be appropriate for the couple regarding a loan from a financial institution that
would give out the lowest level of rate of interest, hence it is suitable for a generalised rate of 5.57%. If any
financial institution gives out a standard rate then it is suitable to take loan. There are various loan products
that are available to the client which they can make use of in order to purchase the property they desire. It
is seen that according to the financial position of the client and the two products that are ideally suitable
for them are home loan provided by HSBC and the home loan that is provided by IMB bank. HSBC provides
loan of 3.65% and on the other hand IMB provides an interest rate of 3.79%. There are various other home
Page 16 of 43

loan products that are available to the client but it is seen that these two are the appropriate ones because
of the fact that HSBC has a monthly repayment of $1144 and on the other hand IMB offers a monthly
repayment of $1163. These are the two loans that offers a minimum deposit percentage of 10% each.
There are various other companies that are offering the same or lower minimum deposit percentages but
these two products offers LMI. These two products even provide the option of paying out the loan early
and in case the payments are paid at early, then the cost reduces. Out of the two products, HSBC home
loan product does not charge any additional rate of interest. IMB charges an additional interest rate as
processing fees of the clients which HSBC does not. Lender mortgage insurance is a key for the lender as
there are threats associated to the life of any individual and therefore some probable action requires to be
given to the couple so that they can lower their degree of risk related with the lender mortgage insurance
interest.
The option that is recommended to them has been to the client for undertaking a loan to purchase their
first house is to take purchase the HSBC home loan that gives out a rate of interest of 3.65% and does not
charge any extra interest rates in order to recognise the ability of repayment for the couple. The couple
requires to pay the lender’s mortgage insurance and has to undertake certain steps so that additional
pressure of risk related with the insurance can be terminated. This is due to the fact that observing the
assets and income of the couple it is suitable that they pay an rate of interest of 3.65% that would result to
the amount costing $1144, which is the value that would be payable for them if the income of the couple
are combined. HSBC home loan offers a significant lower time frame from application for the loan and the
settlement of the loan as they have a better settlement team. HSBC settles the loan application within 15
days from the application of the loan, which is lowest with respect to the other products that are available
in the Australian market. The documents that requires to be submitted by the clients are the photo ID proof
address proof and the financial statements of the couple.
The disclosures that can be implied to the present condition are inclusive of :
1. Credit Guide: It provides primary data regarding the broker to the consumer. The time of providing
the credit guide is dependent upon the kind of entity the broker is and the what credit operations,
the broker engages in but would be specifically before initiating in the credit operations of the
consumers.
2. Quote: Quote describes the consumers about the anticipated costs before making use of the
services if the fee of the consumer is charged. Before initiating the credit assistance, a quote
requires to be given to the consumers and the consumer requires to accept the quote by signing
the quote.
3. Proposal Document: A proposal document provides the cost to the consumers of making use of the
services that are inclusive of the commission of the broker that they may receive. A proposal
document requires to be given to the consumer during the same time of credit assistance given to a
consumer.
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Assessor feedback: Resubmission required?
Consider that if you received the proposal as it is now, would you be
confident as the Mortgage Broker that you have provided all the
information to allow the Johnson’s to make an informed decision?
Your proposal should include all important information about the loan
options you are proposing.
A good proposal would cover what you have stated but also some
additional factual information:
- A detailed Comparing at least 2 different loan products before
coming to your recommended product.
- What the loan repayments are;
- What the costs would be and if they need to contribute more;
- The fact that LMI is applicable and what the cost and options for
payment are;
- The supporting documents they will need to provide;
- The expected time frame from application to settlement; and
- The mandatory disclosures that are required and remuneration
you will receive (reference to documents is not sufficient in this
case but a detailed summary is acceptable).
- summary of the client’s financial position;
- The actual loan amount (to be clear for clients and take into
account all the costs which can impact in the loan amount);
You might want to review the Example Written Proposal Format
available in the course material.
Yes
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2. (a) Describe the workings of any home buyer assistance schemes and stamp duty concessions that
may be available in your State or Territory. Would your client be eligible for any of these?
(150 words)
Student response to Task 6: Question 2 — part (a)
With respect to the clients Mr and Mrs Johnson, who are residing in Victoria, it is seen that, the home
buyer assistance scheme especially First Home Owner’s Grant there are subsidies that are available in
Victoria region where the couple are purchasing their house. It has been observed that The First Home
Owner’s Grant of the state discloses that qualified purchasers are given exceptions from transfer duty on
new homes that values to $550,000 and so looking at the amount of the house that they are purchasing
valued at $490,000 they are qualified for the exemption on stamp and transfer duty of $10,000 on their
first house in the state of Victoria. In order for the couple to be entitled for the exception it is important for
the borrower to be a citizen of Australia, the agreement must be of the purchase of the whole property,
needs be over 18 years, requires to be a natural person and borrower or his/her partner must not hold any
previous residential property in any state or territory of the country. By observing the eligible criteria and
the indemnity validity of Mr and Mrs Johnson it is seen that they are qualified for deductions with respect
to the home buyer assistance schemes as it is their first home and they have applied with respect to the all
the conditions disclosed by the state. There are no concessions on stamp duty is observed.
Assessor feedback: Resubmission required?
Competency not yet demonstrated. Which state in Australia are you
referring to? You have correctly described the stamp duty concession but
how about the First Home Owner’s Grant, describe the workings and
whether your clients will be eligible.
Yes
Page 19 of 43

2. (b) Provide a summary of all additional costs and fees that the couple should be made aware of.
(150 words)
Note: When considering your response to these questions, bear in mind the couple’s inexperience with
the borrowing and property purchasing process.
Student response to Task 6: Question 2 — part (b)
The main additional fees and costs that the couple requires to be aware of while buying the house and
processing of the loan is as follows:
Deposit: This is found to be the down payment that the couple requires to pay before buying the house and
undertaking the loan and this value specifically ranges from 5 to 20% of the total amount of the house.
Stamp Duty: It is the value that is paid to the government as a tax for any of the properties that have a
value above $125,001.
Valuation fee: The lender will evaluate the property value and will discover the value that would be loaned.
This amount varies with respect to the property value and generally few lenders even do not charge this
fee.
Surveyor’s fee: It is important to get the property examined by the surveyor before buying the house. It is
important as it discovers any issues that are related to the house. The structural amount of the survey has a
value that ranges from $250 to $600.
Legal fees: A solicitor is required by the couple in order to complete all the legal related works while
purchasing the house and therefore a fee requires to be paid to the solicitor for their service.
Electronic transfer fee: It is the cost that requires to be paid for the electronic transfer of the loan amount
by the lender to the borrower.
Estate’s Agent fee: It is the fee that has been given to the agent for being a link between the seller and the
buyer.
Removal Cost: It is the expenditure that requires to be paid for the transfer of the household furniture and
other items from the old to the new house.
Assessor feedback: Resubmission required?
You have demonstrated that you are competent regards to this Task. No
Page 20 of 43

Task 7 — Advising on strategies
Following the presentation of your proposal, Malcolm and Susan say that they would like your advice
regarding strategies that will help them to pay down their home loan as quickly as possible.
List strategies or methods that will help them achieve their aim.
Provide the advantages and disadvantages of each. (250 words)
Student response to Task 7
The list of strategies that will help the couple to pay off their loan in a faster manner are: :
1. Support the mortgage repayments with the income: It is a good choice to pay the mortgage fortnightly as
it lowers the interest payable and saves a certain amount of money over the course off the loan. It is an
advantage for the couple as the interest rate will get lowered and the disadvantage is that their
expenditure would increase.
2. Park lump sums in the mortgage account: Depositing additional income from dividends, bonus and tax
refunds in the mortgage account can result to the cut down of years’ worth of interest for the loan term.
The drawback of this strategy is that this additional income cannot be used for any other purposes or in
case of emergency.
Increasing repayments while the rates are stable: It is vital to maintain the amount of repayment same
even if the rate is decreased by the banks and the financial institutions. It is an advantageous position
because it can lead to a cut down of up to two years of life span simply by paying more.
Offsetting loan with the savings account: Settling the loan amount with the savings account earns interest
and that amount can be subtracted from the from the interest payable of the loan. It can really lead to the
reduction in the loan value and lower the interest payable. The drawback is that the total amount in the
savings account gets transferred to the loan and hence, there is no savings left for the consumers.
Perform a mortgage health check: It can be seen that with time the loan might not best fitted anymore due
to transformation in rate of interest leaving a better occasion with a variable rate than a fixed one.
Assessor feedback: Resubmission required?
You have demonstrated that you are competent regards to this Task. No
Page 21 of 43

Task 8
Malcolm & Susan have called to discuss whether they should consider fixing the interest rate on their loan
— they say their parents have said ‘you never beat the bank when you fix’, and yet their friends are telling
them about a loan where they can ‘have a bit of both’.
1. Explain the role of the RBA with respect to interest rates and why it is necessary to have these controls.
Student response to Task 8: Question 1
The Reserve bank of Australia has power of the rate of interest of the country as it is seen that the rate of
interest has an influence on the monetary policy of the country. The decisions with respect to the monetary
policy are taken with respect to the cash rate. The RBA looks to take control of the interest by raising and
lowering the interest rate with respect to the transforming market scenario. These controls requires to be
taken as no administration over the rate of interest will result to inflation in the country and thereby
transforming the economic structure of the country.
Assessor feedback: Resubmission required?
You have demonstrated that you are competent regards to this Task. No
2. Suggest how Malcolm and Susan could potentially solve their dilemma.
Student response to Task 8: Question 2
The couple have the chance to rectify the dilemma of constructing the rate of interest by primarily
evaluating the interest rate given by all the banks and the financial institutions. It is recommended that the
couple looks for alternatives of gaining a mix of both of combining themselves and permitting the banks to
fix so that it becomes elastic and the interest rate can change according to the requirement of the
consumers.
Assessor feedback: Resubmission required?
You have demonstrated that you are competent regards to this Task. No
Page 22 of 43

Task 9 — Settlement
Outline in detail the steps a Lender should take post-approval in order to document, settle the loan and
administer the loan post-settlement. (300 words)
Student response to Task 9
The Post approval of the loan is the effort of the lender and it is their role to file the loan by signing all the
documents and all essential payments are transferred to conclude the purchase of the house. The stages
undertaken to maintain a loan from the time it is secured until its payment is undertaken by the lender.
They look after the borrower billing, payments collection and making transformations in the contract in
accordance to the transforming rate of interest in the market and the requirement of the lender and the
borrower. It is even not unusual to have the servicing of the loan transferred among various organizations
during the time period of the loan. It is even seen that title insurance is also done in certain circumstances
which refer to a policy that defends the lender or the borrower against any loss to a dispute, error related
to the title, the document that gives out ownership of the property.
Assessor feedback: Resubmission required?
You have demonstrated that you are competent regards to this Task. No
Page 23 of 43

Section 2: Case study 2 — John Simpson
Background
John has been a self-employed carpenter for 10 years, and operates his business under a company
structure.
He has approached you for help in arranging finance for a potential purchase of an investment property.
He was referred to you by his accountant, who is a friend of yours. Apart from purchasing the home he
currently lives in some 12 years ago, he has had no other experience in dealing with a mortgage
application, though he has recently obtained finance for a new work truck via his local bank.
He has found a property he likes, and has already secured the services of a solicitor to assist with the
purchase.
John currently owes $375,000 and estimates his home to be worth $650,000.
He has agreed to purchase the investment property for $300,000 and needs to borrow the full purchase
price plus $20,000 to cover stamp duty, and other associated costs including a $5,000 ‘cash reserve’ in case
there are delays in securing a tenant for the property.
After reading the case study above, answer the questions below.
Page 24 of 43

Project tasks (student to complete)
Task 10 — Establishing level of financial knowledge
What communication skills might you use to establish and confirm John’s level of knowledge about credit
and finance and to establish his needs? (150 words)
Student response to Task 10
In order to confirm and establish the degree of knowledge about finance and credit in order to understand
the requirements about of John, it is important to undertake a direct face to face communication with the
individual so that all the necessities needed by John can be understood effectively and any queries
associated to the loan can be rectified directly. John can have an effective idea about the process of loan
application as he is not experienced about the methods that are essential for gaining a loan and thus he can
have a precise idea about the documentation, settlement, methods and the loan amounts that he can
receive by observing the financial assets.
Assessor feedback: Resubmission required?
You have demonstrated that you are competent regards to this Task. No
Page 25 of 43

Task 11 — Using equity
1. How is it possible for John to borrow 100% of the purchase price + costs?
Student response to Task 11: Question 1
It can be possible for John to borrow 100% of the costs and purchase as a loan if John is capable of
providing a guarantor for the loan. If the bank is satisfied with the income and the asset of the guarantor,
they may permit a loan of 100% to John. The guarantor performs as a person who would bear the
responsibility of the loan if John is unable to pay back the debt within the duration of the loan or thinks of
surrendering if he is unable to pay for the loan.
Assessor feedback: Resubmission required?
You have demonstrated that you are competent regards to this Task.
The clients can also use their existing loan as collateral.
No
2. Assuming John uses the same bank to finance his home and the investment property he wishes to
purchase, what is the loan to value ratio (LVR)?
Student response to Task 11: Question 2
The loan to value ratio is computed by dividing the amount that has been taken as a loan from the bank by
the overall estimated value of the property. It is seen that John owes $375,000 for the house which has
been anticipated to have a value of $650,000 and the investment property he under the impression of
purchasing is valued at $325,000 that are inclusive of the cash reserve and the stamp duty out of which he
wants a loan from the bank that would be 100%. Thus, the loan to value ratio is computed as:
$375,000 + $300,000 + $20,000/$650,000 + $300,000 = $695,000/$950,000 or 73.1%.
It can be observed that John would receive 73.1% of the overall value of the property that is inclusive of his
house and the investment property.
Assessor feedback: Resubmission required?
You have demonstrated that you are competent regards to this Task. No
Page 26 of 43

Task 12 — Self Employed special considerations
1. As John is self-employed via his company, name three (3) possible extra documents you will need to
obtain and assess?
Student response to Task 12: Question 1
It is seen that John is self-employed and therefore three additional documents that are required to be
evaluated for John are:
1. The individual tax return and the ATO Notice of Assessment that is not older than 18 months.
2. The Profit and Loss Statement, the Balance Sheet and the Business Tax, that is no older than 18 months.
3. The idea about any other income sources lie the income from interest and dividend, annuity, foreign
income, superannuation, pension, or government income sources with the addition of several other assets
like motor vehicles and all that was not disclosed previously.
Assessor feedback: Resubmission required?
You have demonstrated that you are competent regards to this Task. No
2. If a Low Doc application is an option for the customer, name three (3) extra documents you will need to
obtain and assess.
Student response to Task 12: Question 2
The three additional documents that are essential to be evaluated and gathered in case of Low Doc
application are given below:
1. The bank statement revealing the performance of the self-employed projects and the amount of money
that gets deposited in the bank account and how much expenditure are incurred due to their profession.
2. Statement for Business Activity the last 12 months.
3. Signed Borrower’s Income Declaration
Assessor feedback: Resubmission required?
You have demonstrated that you are competent regards to this Task. No
3. Explain how applying for a ‘Low Doc Loan’ could lead the mortgage broker to be accused of
recommending an ‘unsuitable’ product.
Student response to Task 12: Question 3
The Low Doc Loan application is suggested as inappropriate by the mortgage broker as these loans are
related with a high level of risk and are costly in nature. The rate of interest are more as there are certain
financial documents that have been submitted by the borrower which establishes a threat to the broker as
there are probabilities of fraud and the real income and the capability to pay off the debt by the borrower
is not known easily.
It is observed that the brokers are alleged of suggesting the Low Doc Loans and are not appropriate as most
of the time the Low Doc Loans are not able to meet the requirements and the goals of the borrowers as
Page 27 of 43

these loans are not in need of any financial documents and thus the rate of interest is high and the threat
factors become higher as well. it is seen that the main aim of the borrower is to gain a loan of their desired
value by paying the minimum amount of the interest. Conversely, it is observed that the interest rate is
very high which may result to issues for the borrowers to pay off the debt.
Assessor feedback: Resubmission required?
You have demonstrated that you are competent regards to this Task. No
Page 28 of 43

Task 13 — John’s professional network
1. Name three (3) parties John may wish you to keep informed of the progress of his finance application.
Student response to Task 13: Question 1
The three parties that John looks to keep informed about the development of his finance application are:
1. His Solicitor
2. The Mortgage Broker
3. The Estate Agent
Assessor feedback: Resubmission required?
You have demonstrated that you are competent regards to this Task. No
2. Briefly outline to John the process that will occur from your meeting onwards.
Student response to Task 13: Question 2
The procedure that would undertake after the meeting with John involves the appropriate inspection of all
the financial statements presented by John. It is also significantly to assess the address proof, photo ID
proof properly before applying for the loan. The next phase involves the conclusion of the loan application
form after which the application requires to get preapproved by the banking systems. In the next step the
dispensation of the loan where all the documents of the borrower along with the offered property for
purchase are inspected closely to find out the real value and any legal responsibilities associated with the
property or not. After this method, the authorization requires to be received after which pre-closing and
closing of the loan is taken after which the loan is approved.
Assessor feedback: Resubmission required?
You have demonstrated that you are competent regards to this Task. No
3. Although some of these stages do not involve the mortgage broker, briefly explain why it is important to
keep abreast of developments.
Student response to Task 13: Question 3
The requirement of the mortgage broker is essential in each stages of the application of the loan as the
mortgage broker as a concierge of the personal loan and undertakes all the work on behalf of the
borrowers. The borrower undertakes the loan application with several lenders and discovers the lowest
rate of mortgagee, undertakes the negotiation and undertakes the approval to take place. The mortgage
brokers has an effective relationship between with the national and regional lenders and thereby they can
create some connections to get some loan fees that have been waived. The broker can give out the
accessibility to individual attention which is likely not to be gained while working directly. Thus, it is
essential to inform the broker so that in case of any issues with respect to the approval of the loan the
broker can resolve and rectify the issues so that the loan process can be fast and smooth.
Page 29 of 43

Assessor feedback: Resubmission required?
You have demonstrated that you are competent regards to this Task. No
Page 30 of 43

Task 14 — Impact of credit history
John tells you that his former wife failed to properly meet their unsecured personal loan debt obligations
before they separated. Although John eventually repaid the debt he is afraid that this incident may count
against him when he applies for a loan.
What would you advise John about:
1. Name two (2) of the major credit reporting agencies and advise what information these files contain?
Student response to Task 14: Question 1
The two major credit reporting agencies in the country are
1. Creditor Watch
2. Tasmanian Collection Service
The document that requires to be given to the credit reporting agencies should comprise of all the
authentic personal statements of the borrower along with the financial reports. The credit history of the
past with respect to the borrower also needs to be submitted along with the term and payment mode. The
amount of repayment along with the factor for failure to pay the previous loan on time requires to be
informed as well. John even wants to disclose the proof of his divorce with his wife who took the loan and
should provide documents that he has repaid it properly without delay so that his credit score as well as
the loan taking credit increases.
Assessor feedback: Resubmission required?
You have demonstrated that you are competent regards to this Task. No
2. Advise what procedure is involved and the associated costs to obtain a copy of your own file from each
of these agencies on both an urgent and a non-urgent basis and can a free copy be obtained?
Student response to Task 14: Question 2
It is very easy to gather the credit report by undertaking any of the packages provided by the agencies. If a
free credit report is needed then it can be gained within ten days. The free services only requires to give
out the credit report and are not inclusive of the score and the contributing factors which creates a
synopsis of the main items that has an impact on the credit rating.
There are specific situations under which the copy of the credit report is freely available.
With respect to the agencies that have been discussed earlier, it is seen that Creditor Watch provides
unlimited credit report before taking on a new customer, one can run a credit check on the customer to see
if they have any negative information attached to their credit file. This will help to identify and avoid
potential bad debtors. The company provides a 15 days free trial for this service and in case of urgent or
non-urgent basis, it is seen that the company charges a fee of $9.95 for every time they require a report.
In case of Tasmanian Collection Service it is seen that a free credit report is available once in a year and it is
seen that a free credit report is even available if an application for the credit has been declined for the past
three months. The report is provided by the company within 10 days of the request. In case of urgent and
non-urgent basis, the reports are available as a little as $5.50, which is inclusive of GST.
Page 31 of 43

Assessor feedback: Resubmission required?
Please elaborate on the procedures to obtain a credit reports from
each of the agencies your identified on a :
-Free basis
- Urgent and non-urgent basis and what are the costs involved. Please
resubmit.
Yes
3. If there are errors on the file what is the procedure for John to follow in order to have these
errors rectified?
Student response to Task 14: Question 3
If there are any existence of any errors in the file and is required to be resolved by John, then he requires to
request a copy after applying for a correction request and therefore has been recommend that the data on
the file has been improved. The stages to resolve the credit report comprises of the following.
1. review each line of every single report – it is important to remember that not all credit reports say the
same things;
2. if there is an error on a report, file a complaint with the CFPB as well as a request for investigation with
each credit reporting agency;
3. Review the updated credit reports to ensure that the errors are corrected.
Assessor feedback: Resubmission required?
You have demonstrated that you are competent regards to this Task. No
Page 32 of 43

4. What are the Lender’s legal obligations if they decline an application due to the content of the credit
agency file?
Student response to Task 14: Question 4
The legal obligations of the lender if the application is declined due to the information within the credit
agency file are given as follows:
1. Provide justification to the borrower the reason why the loan has been rejected.
2. Provide adequate measures and advise to the borrower so that they can improve their financial credit
score and financial statements so that they can apply for the loan later on.
3. Recommend the borrower to reduce their level of debts and taking help of financial consultants so that
their financial position is back on track helping them to undertake a loan.
Assessor feedback: Resubmission required?
Refer to Topic 3.3 Section 11.5 pages 25-26
As John’s Mortgage Broker and given the situation it is essential that you
make John aware of the legal obligation a Lender has to him, especially if a
lender declines finance? (Hint – There are three obligations.
Yes
Page 33 of 43

Task 15 — External dispute resolution
During the course of the loan process, John is starting to become upset with the time it’s taking to get him
an approval. Although you’ve explained that this is because of delays with the lenders processing system
due to staff being away, you’re concerned the matter may escalate beyond your control.
Explain the role of the Credit and Investment Ombudsman (CIO) in the EDR process.
Student response to Task 15
The EDR provider performs as a recording agency that records all the credit reporting file so that it can be
used during the time when required. The EDR can assist in terminating the postponement in the lenders
processing method so that John could get his loan sanctioned.
If COSL acts as the EDR then it can said that COSL looks into the complaints and disputes about their
members in accordance to their products and services like the credit products and services. they resolve
the issues in a non-adjudicative means with the help of conciliation even though the real Ombudsman can
undertake decisions which binds on the members. The determination undertaken by the Ombudsman links
the members but not the complaints.
COSL’s process of conciliation is both consensus-based and inquisitorial and focuses on producing an
outcome that is mutually satisfactory. The consumers and the members are afforded equivalent chances to
bring forth their cases. This has been intended to make sure procedural fairness and promote effective
resolution of dispute.
The role is undertaken by the COSL as an EDR requires covering the the complaints of the borrowers if they
have dispensed with a COSL member as a borrower or prospective borrower, loan guarantor or prospective
guarantor and in any way looks into the services of a member in the general course of their business in the
credit market place.
Assessor feedback: Resubmission required?
You have demonstrated that you are competent regards to this Task. No
Page 34 of 43

Task 16 — 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.
John’s away at the moment, and his email provider has a size limit on the data that can be sent via email.
What is a potential solution for John, and name a provider that could assist?
Student response to Task 16
It has been observed that the loan has been sanctioned finally and it is seen that John is out of town at the
moment. There are important documents which are required to be accessed by John. It is seen that the
email provider of John does not possess the available size of limit so that the files and the documents can
be forwarded to him. The only probable solution that is left to John is to ask the lender to make use of the
Cloud Storage Services where the files can be restored so that the files can be shared various cloud services
like Sky Drive, Google Drive and Dropbox. It can then become easier to share the file with John and the
lender can inform John that the file has been forwarded to him. John just has to click on a specified link and
can directly download the file in his computer.
The provider that can aid John can either be Microsoft o Google. If John makes use of Microsoft and
Google, they have an integrated Sky Drive and Google Drive into their respective email services. Just a click
on the SkyDrive and and Google Drive button while forwarding an email and the lender would be able to
share their file via email service. Outlook and Gmail will aid in selecting a file that exists already in the cloud
storage drive or can be possible by uploading a new file.
Assessor feedback: Resubmission required?
You have demonstrated that you are competent regards to this Task. No
Page 35 of 43

Appendix 1: Client information collection tool
Appointment date: 22/08/2017
Appointment time: 10:20 AM ___
Applicant 1 Applicant 2
Surname Johnson Johnson
Other names Malcolm Susan
Contact details Address Unit 12, 22 Wentworth Lane,
Highville, Victoria
Unit 12, 22 Wentworth Lane,
Highville, Victoria
Phone (W)
Phone (H)
9800 1111
9001 2121
9910 2033
9001 2121
Mobile NA NA
Email [e-mail] [e-mail]
Employment Team Leader (Full time) Accountant (Full time)
How long? 10 Years 12 Years
Previous employer NA NA
How long? NA NA
PAYG NA NA
Self-employed NO NO
Gross income (p.a.) $ 55,000 $ 91,000
Number of dependants NA NA
Motor vehicles 1 1
Page 36 of 43

Loan purpose Purchase of House Property
Purchase price/Valuation $510,000
Deposit $80,000
Loan amount $430,000
Borrowing capacity $430,000
Page 37 of 43

Assets and liabilities
Assets Liabilities
Details Market value Details Monthly payments Amount owing
Property at: NA NA Mortgage with: NA NA
Property at: NA NA Mortgage with: NA NA
Property at: NA NA Mortgage with: NA NA
Cash at bank $93,600 Car leasing NA NA
Other cash NA Personal loans
1. Malcolm
2. $180 $3,600
Deposit paid on property NA Overdraft NA NA
Motor vehicles:
1. Holden Commodore SS
2. Suzuki Baleno,
$25,000
$9,000
Other loans:
1.
2.
NA NA
Personal effects $40,000 Credit card limit: $2000 0 $200
Business value NA Credit card limit: $3000 0 $600
Shares and investments NA Other: NA NA
Superannuation $90,000 Other: NA NA
Other assets (give details) NA Other: NA NA
Total assets $257,600 Total liabilities $ 180 $4,400
Surplus/deficiency: Surplus of $253,200_________________________
Page 38 of 43

Needs analysis
1 Name of your current lender? ANZ Bank
2 What type of loan do you have? Personal Loan
3 Why did you choose this particular loan and lender? Reputation of the bank and due to some personal
investment purpose
3 What is the interest rate? 14.69 p.a
4 What are your payments? Amount $3600
5 Frequency Annually
6 Do you know the fees and charges? No
7 What is your proposed purpose for the loan proceeds? Purchase of Refrigerator
8 Branch access available Yes
9 Internet banking available Yes
10 Phone banking available No
11 Lenders not to be considered YES
12 Type of loan sought Home Loan
13 Interest rate 5.57%
14 Payment frequency Annually
15 Redraw YES
16 Offset YES
17 Salary crediting YES
18 Low fees and charges NO
Page 39 of 43

Notes
The process of interview with the borrower has been initiated at the head office at 10:20 pm AST. The
questions that have been asked are associated to the financial constancy of the couple Susan and
Malcolm and they amount they earn annually and their extent of expenditure. All of their information
and documents with respect to their liabilities and assets have been told to be forwarded and
information about any other medium of income has been asked. The requirement of a house and why a
house with such an increasing cost is their requirement has even being asked. The answers given are
recorded. The computation of the loan has been completed via loan calculator and the excel sheets to
provide clear idea to the clients about the amount that has to be paid. The requirements and the
obligations in accordance to the loan are even forwarded to the client so that no arguments can arise
later.
Page 40 of 43

Anticipated fees and charges
Anticipated purchase price $ $490,000
Deposit $ $80,000
Loan amount $ $ 430,000
LVR 87.75%
Purchase costs
Stamp duty on transfer $ 20,000
Solicitor/conveyancer $ 300
Rates and land taxes $ 600
Pest inspection $ 150
Borrowing costs
Application/establishment fee $ 1250
Valuation fee $ 4000
Security admin fee $ 350
Mortgage stamp duty $775
LMI $ 900
Registration of mortgage $ 250
Release of mortgage $ 1600
Search fees $ 550
Other $ 745
Total $ 31,470
Page 41 of 43

Loan interview diary
Name(s) of client(s) present at interview
Malcolm and Susan Johnson
Date of interview:
Location of interview
Head Office
Indicate all clients who were interviewed in person
Malcolm Johnson
Susan Johnson
Do all of the clients appear to clearly understand English? Yes
If not, have the services of an interpreter been recommended? Y/N
Do all of the clients clearly benefit from taking out this loan? Yes
If not, what inquiries have been made to ascertain the level of benefit to each party of the loan?
NA
Are any clients acting as though they are under duress or other disability? Y/N
Are any clients acting as though they are unsure of anything about the loan? Y/N
Are any of the clients acting as though they are unable to comprehend their obligations? Y/N
Page 42 of 43

Are there any guarantors? Y/N
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/N
Provide details of other pertinent information obtained during the loan interview which may be of interest
or any unusual circumstances you may wish to record
Nothing to record as such
Page 43 of 43