Kaplan Professional: CIVMBv3A3 Finance and Mortgage Broking Assignment

This assignment solution addresses a case study involving Clinton and Jennifer Andrews, who are seeking finance for an investment property. The assignment requires assessing the clients' financial situation, including their assets, liabilities, income, and expenditure, and understanding their borrowing needs. It covers tasks such as initial disclosures, gathering client information, assessing their situation, considering the use of equity, making reasonable inquiries, providing recommendations, and understanding interest rates and settlement processes. The assignment also includes a second case study with Tony and Lorraine Denton, focusing on establishing their financial knowledge, responsible lending obligations, self-employed special considerations, advising on strategies, the impact of credit history, external dispute resolution, and effective access to files. The solution demonstrates the application of financial principles and mortgage broking practices, including the use of a client information collection tool and a serviceability calculator to determine the best financial solutions for the clients. The document is a comprehensive response to the assignment brief, demonstrating a deep understanding of the subject matter and a practical approach to the tasks presented.

Assignment
Certificate IV in Finance and Mortgage Broking
(CIVMB_AS_v3A3)
Student identification(student to complete)
Please complete the fields shaded grey.
Student number
Assignment result (assessor to complete)
Result — first submission (Details for each activity are shown in the table below)
Parts that must be resubmitted:
Result — resubmission (if applicable)
CIVMB_AS_v3A3

Result summary(assessor to complete)
First submission Resubmission (if required)
Section 1: Case study 1 —
Clinton and Jennifer Andrews
Task 1— Initial disclosures Not yet demonstrated Not yet demonstrated
Task 2 — Gathering and documenting client information Not yet demonstrated Not yet demonstrated
Task 3 — Assessing the clients’ situation Not yet demonstrated Not yet demonstrated
Task 4 — Using equity Not yet demonstrated Not yet demonstrated
Task 5 — Reasonable enquiries Not yet demonstrated Not yet demonstrated
Task 6 — Recommendations Not yet demonstrated Not yet demonstrated
Task 7 — Clinton and Jennifer’s professional network Not yet demonstrated Not yet demonstrated
Task 8 — Interest rates Not yet demonstrated Not yet demonstrated
Task 9— Settlement Not yet demonstrated Not yet demonstrated
Section 2: Case study 2 —
Tony and Lorraine Denton
Task 10 — Establishing level of financial knowledge Not yet demonstrated Not yet demonstrated
Task 11 — Responsible lending obligations Not yet demonstrated Not yet demonstrated
Task 12 — Self Employed special considerations Not yet demonstrated Not yet demonstrated
Task 13 — Advising on strategies Not yet demonstrated Not yet demonstrated
Task 14 — Impact of credit history Not yet demonstrated Not yet demonstrated
Task 15 — External dispute resolution Not yet demonstrated Not yet demonstrated
Task 16 — Effective access to files Not yet demonstrated Not yet demonstrated
Feedback (assessor to complete)
[insert assessor feedback]
Page 2 of 58

Before you begin
Read everything in this document before you start your assignment forCertificate IV in Finance and
Mortgage Broking (CIVMB_AS_v3A3).
About this document
This document includes the following parts:
• Part 1: Instructions for completing and submitting this assignment
• Section 1: Case study 1 — Clinton and JenniferAndrews
– Task 1 — Initial disclosures
– Task 2 — Gathering and documenting client information
– Task 3 — Assessing the clients’ situation
– Task 4 — Using equity
– Task 5 — Reasonable enquiries
– Task 6 — Recommendations
– Task 7 — Clinton and Jennifer’s professional network
– Task 8 — Interest rates
– Task 9 — Settlement
• Section 2: Case study 2 — Tony and Lorraine Denton
– Task 10 — Establishing level of financial knowledge
– Task 11 — Responsible lending obligations
– Task 12 — Self Employed special considerations
– Task 13 — Advising on strategies
– Task 14 — Impact of credit history
– Task 15 — External dispute resolution
– Task 16 — Effective access to files
• Appendix 1:Client information collection tool/Fact Finder.
• Appendix 2:Serviceability calculator.
How to use the study plan
We recommend that you use the study plan for this subject; it will help you manage your time
effectively and complete the assignment within your enrolment period. Your study plan is in the
KapLearn Certificate IV in Finance and Mortgage Broking (CIVMBv3) subject room.
Page 3 of 58

Part 1: Instructions for completing and submitting
this assignment
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_CIVMBv3A3_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 needed to complete Sections 1 and 2 is presented in case studies at the
beginning of those sections.
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.
Page 4 of 58

Submitting the assignment
You must submit the completed assignment in acompatible 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 26 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 given 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 (CIVMBv3)subject room in KapLearnunder 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:
• Assessing your responses to each question (and sub-parts if applicable)then determining whether you
have demonstrated competence in each question.
• Determining if, on a holistic basis, your responses to the questions have demonstrated overall
competence.
Page 5 of 58

‘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 to amend those
sections where the assessor has determined you are ‘not yet competent’.
When making changes to your original submission, use a different text colour for your
resubmission.This way, 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.
Before you submit your assignment
If you have any queries about the assignment questions, please use the ‘Ask your Tutor’ forum in your
subject room. You can expect an answer from your Tutor within 24 hours of posting your question.
Remember, your online tutor cannot preview or check your assignment answers, or provide specific answer
guidance. Please ensure that your questions are about clarification of the intent of an assignment question.
After your assignment has been assessed
If you have questions about your assessor’s feedback, please
email:<[e-mail]>and include a copy of your assessed assignment. Never post your
assignment answers or assessor comments in the ‘Ask Your Tutor’ forum.
Page 6 of 58

Section 1: Case study 1 — Clinton and Jennifer Andrews
Background
Clinton and Jennifer Andrews live in Sydney with their two school-age children. Theybought their home
15 years ago. With the rise in its value over time they have generated substantial equity and have decided
to purchase an investment property. Recently they went to a real estate seminar where the presenter
explained that it is possible with correct leverage to purchase more than one investment
property.Consequently, they have decided to borrow 90% LVR on the investment property plus the LMI.
The deposit, stamp duties and other costs will come from their ‘offset account’ attached to their home
loan.They have requested not to use their current lender.
After conducting research over the last six months they have decided to purchase a new four-bedroom
home in outer Brisbane for $450,000 with a rental income of $450.00 per week.
The real estate agent has recommended they contact you to arrange their finance.Their accountant has
been providing some advice in relation to negative gearing benefits.
The following tables are a summary of the details obtained from the couple during the fact find interview.
The details provided include a description of the property they wish to purchase, their financial and
employment details and the loan features that they require.
The investment property
Address: 29PacificDrive, Ipswich, Queensland 4305
Purchase price: $450,000
Description: 4-bedroombrick veneer home
Rent: $450.00 per week
Agent details: Rain and Hall
Phone: [phone]
Mobile: [phone]
The borrower’s home address
Current address: 17 Moss Ave, East Hills, NSW 2213
Description: 5-bedroom full brick home
Value: $850,000
Mortgage: $190,000
Monthly repayment: $1,020.00 per month
Home phone: [phone]
Clients’ view of funding requirements
Purchase price: $450,000
Estimated costs: $20,000
Total required: $470,000
Loan: $405,000 + LMI
Own contribution: $65,000
Page 7 of 58

Assets
Big Bank offset savings account (joint) $180,000
Little Bank fixed term account (joint) $10,000
FordFalcon G6, 8 years old (Clinton) $15,000
Holden Barina, 10 years old (Jennifer) $5,000
Superannuation — MPAInsurance (Clinton) $82,000
Superannuation — CLMInsurance (Jennifer) $54,000
Household effects (insured value) $80,000
Liabilities
Big Bank standard home loan (Joint)
(P&I repayment, variable, no fees)
5.0% $190,000(repayments $1,020 p.m.)
Big Bank Visa card (Clinton) 18.5% $800(limit $5,000) (clears monthly)
Little Bank Visa card (Jennifer) 12.9% $1,200(limit $3,000) (pays $500 per month)
All debts have been repaid according to arrangements. In relation to the credit card debt, the minimum
monthly commitment for servicing purposes should be calculated at 3% of the credit limit.
Income/employment
Clinton (date of birth 24/5/84)
Position: Project Manager (full time)
Employer: ACM Construction
10 Wide Rd, Ryde, NSW
Phone: [phone]
Income (gross): $85,000 p.a., gross monthly income of $7,083, net monthly income of $5,476
Employer contact: KellyWilliams, HR Manager
Length of service: 16 years
Driver’s licence: 8869KL
Email: [e-mail]
Jennifer (date of birth 8/10/87)
Position: Accounts Assistant (full time)
Employer: Pretty Clothing Pty Ltd
80 High Street, Penrith, NSW
Phone: [phone]
Income (gross): $74,000 p.a., gross monthly income of $6,166, net monthly income of $4,837
Employer contact: JoanCollins, HR Manager
Length of service: 7 years
Driver’s licence: 2897HT
Email: [e-mail]
Page 8 of 58

Interest income
Approximately $30 per month from the $10,000 term deposit,interest of 3.5% p.a.
Expenditure
Monthly expenditure for living expenses— $3,200.
Solicitor’s details
Jackson & Williams
28West Street, Yagoona, NSW
Phone: [phone]
Fax: [phone]
Note:The solicitor has quoted $1,500 to cover estimates costs.
Proposed loan details
• application fee— $600.00 (includes valuation)
• 30-year term
• principal and interest
• residentialinvestment loan
• standard variable interest rate of 5.68% (comparison 5.82%), special offer rate of 4.78%
(5.16% comparison) (Note: Clinton& Jennifer will qualify for this special loan offer.)
• proposed settlement date — 6 weeks’ time
• ability to make additional payments from time to time without penalty
• fortnightly repayment option
• redraw facility
• internet banking.
Page 9 of 58

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.These disclosures include the way you are remunerated and the range and limitation of your
services.
1. There are four (4) documents listed in ASIC Information sheet INFO 146 ‘Responsible lending disclosure
obligations – Overview for credit licensees and representatives’that must be provided to customers.
Refer to this Information sheet and the information contained in your topic notes to answer part (a) and
(b) below.
(a) Identify which of these four (4) documents you must provide your client before you commence
providing credit assistance and explain the main disclosures relevant tothat document. (40 words)
Student response to Task 1: Question 1(a)
The documents that needs to be provided to the client are as given below:
1) Credit Guide
2) Quote
3) Poposal Document
4) Written assessment
(b) Identify which of these four documents you will provide the client should you intend to charge a
broker fee and explain what is required for it to be valid. (40 words)
Student response to Task 1: Question 1(b)
The documents that are to be given to the client for levying the fees for brokerage are as follows:
 Name of the licensee and the contact details
 The brokerage percentage that is to be levied from the client and the basis of the calculation.
 The explanation and the details of the services for which the brokerage fees would be charged
 The maximum amount that can be levied as brokerage.
The advisor should also explain whether the brokerage fee is to be paid one time or in a periodical manner.
Assessor feedback: Resubmission required?
No
Page 10 of 58

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 should not be in conflict with the case study
information already provided.
Assessor feedback: Resubmission required?
No
Task 3 — Assessing the clients’ situation
1. Using theExcel or Online version of the Genworth Serviceability Calculator,calculate the Genworth NDI
for the borrowers. This will require you to enter all the data, including their future rental income.
<http://www.genworth.com.au/online-tools-forms-and-reports/lmi-tools/serviceability-calculator>.
Once you have completed the calculations, copy the data into the Serviceability Calculator
(located at the end of this assignment in Appendix 2).
Do not upload the Excel spreadsheet as a separate file.
Assessor feedback: Resubmission required?
No
Page 11 of 58

2. 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. Consider and comment on the following issues:
(a) the maximum loan using the Genworth calculator
(b) deposit requirements for the loan required
(c) combined net monthly income, less cost of living expense as specified by the borrower
(d) do they require Lenders Mortgage Insurance (LMI) and if so, how much will it cost?
Refer to Genworth LMI estimator for this figure
(e) 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.
(No word count requirement for questions (a) to (d)).
Question (e) (100 words)
Student response to Task 3: Question 2(a)
In this scenario, it is observed that there are two different maximum amount level that Jennifer and Clinton
can borrow. The first and the lower one comprises of $892.341, which is in respect to the growth
serviceability calculation and the second one is the higher amount which is the actual amount that amounts
to $1,168.697. This has been due to the fact that the special interest that Jennider and Clinton are aligible
for.
Student response to Task 3: Question 2(b)
The deposit amount has been 10% of the property value which amounts to $45,000.
Student response to Task 3: Question 2(c)
The combined net monthly income that is less than the cost of living has been $7.113.
Page 12 of 58