Finance and Mortgage Broking: Exploring Property Settlement Details

This assignment delves into various aspects of finance and mortgage broking related to property settlement. It addresses key topics such as the implications of a mortgage loan's 'approved in principle' status, the necessary steps for property settlement preparation, and the calculation of property pur...Read More

Finance and Mortgage
Broking

TABLE OF CONTENTS
ACTIVITY 1....................................................................................................................................3
You have been notified by your bank that your mortgage loan has been ‘approved in
principle’. Should you immediately commit to purchasing a property? Explain your answer...3
ACTIVITY 2 ...................................................................................................................................3
What steps should be taken to prepare for a property settlement?..............................................3
ACTIVITY 3....................................................................................................................................3
Calculate how much Henry can spend on a property without having to pay LMI. Show your
workings......................................................................................................................................3
ACTIVITY 4....................................................................................................................................4
Identify and explain some of the benefits of the new PEXA system of e-conveyancing...........4
ACTIVITY 5....................................................................................................................................4
How is buying property at an auction different from buying property through a real estate
agent?..........................................................................................................................................4
ACTIVITY 6....................................................................................................................................4
What sort of disbursements might a conveyancer make on behalf of a property purchaser?.....4
ACTIVITY 7....................................................................................................................................5
What are adjustments when related to a property settlement?....................................................5
REFERENCES................................................................................................................................6

ACTIVITY 1
You have been notified by your bank that your mortgage loan has been ‘approved in principle’.
Should you immediately commit to purchasing a property? Explain your answer
Answer
In case the mortgage loan has been approved in principle which is notified by the bank to
user can take the decision according to requirement (Rajapakse and Senarath, 2019). He can
make decision regarding his needs as he will become able to get the funds within few working
days. Purchasing a property can be decided by borrower after getting the approval. There is
should be that payment for purchase of property can be done by receiving fund from bank not
just approval.
ACTIVITY 2
What steps should be taken to prepare for a property settlement?
Answer
For the property settlement there is systematic process which has five steps that help to
complete objective in effective manner (Whait and et.al., 2019). It involves exchange of contract,
prepare for property settlement, pre inspection, finalizing transferring of documentations,
completing of agreement.
ACTIVITY 3
Henry has saved up $42,500 to use as a deposit, and he wants to know the maximum
price of a property. He can purchase while avoiding Lender’s Mortgage Insurance (LMI).
Henry’s financial service provider requires borrowers with a Loan to Value ratio (LVR) of 80%
or more to take out LMI.
Calculate how much Henry can spend on a property without having to pay LMI. Show your
workings
Answer
Loan to Value ratio= principle amount/ market value of property
Property value= ?
Loan to Value ratio= 80%
Deposits= 42500
on the basis of this it can be specified that deposits is 20% of the property purchase as the LVR
is given 80%. on the basis of this property value will be calculated as follows:

Property value= 42500×100/20
=4250000/20
=$ 212500
The amount need to be spent without having to pay for LMI.
ACTIVITY 4
Identify and explain some of the benefits of the new PEXA system of e-conveyancing
Answer
There are various forms of the benefits which can be obtained by applying e new PEXA
system of e-conveyancing involves grater certainty, cheaper cost of settlement, access to the
funds quicker, good working atmosphere, consistent notification, safe to use, quick transaction,
etc. It provides assistance in getting secure communication process for achieving quality details
for successful processing (Loukoianova, Wong and Hussiada, 2019).
ACTIVITY 5
How is buying property at an auction different from buying property through a real estate agent?
Answer
There are more chances of trading property at fair prices at auction as there is
involvement of larger public. On the other hand in case estate sale there are chances of obtaining
charging of higher prices (Feary, 2017). Buying the property at auction can be largely benefited
in case of good set of standardization of pricing as compare to real estate agent. There is as well
ability to avoid paying any intermediary commission.
ACTIVITY 6
What sort of disbursements might a conveyancer make on behalf of a property purchaser?
Answer
Conveyancing disbursements are fees that conveyancer will have to pay on the for third
party. It includes searches & stamp duty which needs clear set out of quote issued conveyancer
(Caruso and Creek, 2019). In this aside from the professional fees, charging disbursement,
outgoing incidents that has been incurred on behalf. It as well involves land tax, council, water
rate, etc. are done on the behalf of property purchaser.

ACTIVITY 7
What are adjustments when related to a property settlement?
Answer
The adjustment when property settlement is splitting cost of certain n land charges on it.
It is the exercise taken just previous to settlement of conveyancing transaction. In this both the
buyer and seller sees how the particular property will have tax, deposits, condo fees, etc. These
are used to determine the actual amount that is owed to the buyer so that particular process can
be completed (Bergmann, 2020). On the basis of this, it can be interpreted that these are
adjustments made when property is settled.

REFERENCES
Books and Journals
Bergmann, M., 2020. The Determinants of Mortgage Defaults in Australia–Evidence for the
Double-trigger Hypothesis (No. rdp2020-03). Reserve Bank of Australia.
Caruso, D. and Creek, S., 2019. How family violence impacts on property settlement
proceedings. Brief. 46(6). p.14.
Feary, G., 2017. Risk watch: Conveyancing conundrum: Who should sign a Form 1?. Bulletin
(Law Society of South Australia). 39(2). pp.34-35.
Loukoianova, M. E., Wong, Y. C. and Hussiada, I., 2019. Household Debt, Consumption, and
Monetary Policy in Australia. International Monetary Fund.
Rajapakse, P. and Senarath, S., 2019. Commercial Law Aspects of Residential Mortgage
Securitisation in Australia. Springer.
Whait, R.B., and et.al., 2019. The reverse mortgage conundrum: Perspectives of older
households in Australia. Habitat International,. 94. p.102073.