Assignment Certificate IV in Finance and Mortgage Broking (CIVMB_AS_v3A1) 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) Result summary (assessor to complete) First submission Resubmission (if required) Section 1: Case study 1 — Clinton and Jennifer Andrews 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 Feedback (assessor to complete) [insert assessor feedback] Before you begin Read everything in this document before you start your assignment for Certificate IV in Finance and Mortgage Broking (CIVMB_ASMG_v3). 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 Jennifer Andrews – 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. 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_CIVMBv3_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. Submitting the assignment You must submit the 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 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 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: • 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. ‘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: and include a copy of your assessed assignment. Never post your assignment answers or assessor comments in the ‘Ask Your Tutor’ forum. Section 1: Case study 1 — Clinton and Jennifer Andrews Background Clinton and Jennifer Andrews live in Sydney with their two school-age children. They bought 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 is a summary of the details of the property they wish to purchase, the couple’s financial and employment details and the loan features that they require. The investment property Address: 29 Pacific Drive, Ipswich, Queensland 4305 Purchase price: $450,000 Description: 4-bedroom brick veneer home Rent: $450.00 per week Agent details: Rain and Hall Phone: 07 9322 1113 Mobile: 0412 880 088 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: 02 6051 2121 Funds position Purchase price: $450,000 Estimated costs: $20,000 Total required: $470,000 Loan: $405,000 + LMI Own contribution: $65,000 Assets Big Bank offset savings account (joint) $180,000 Little Bank fixed term account (joint) $10,000 Ford Falcon G6, 8 years old (Clinton) $15,000 Holden Barina, 10 years old (Jennifer) $5,000 Superannuation — MPA Insurance (Clinton) $82,000 Superannuation — CLM Insurance (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: 02 7061 2111 Income (gross): $85,000 p.a., gross monthly income of $7,083, net monthly income of $5,476 Employer contact: Kelly Williams, HR Manager Length of service: 16 years Driver’s licence: 8869KL Email: [email protected] Jennifer (date of birth 8/10/87) Position: Accounts Assistant (full time) Employer: Pretty Clothing Pty Ltd 80 High Street, Penrith, NSW Phone: 02 9940 3677 Income (gross): $74,000 p.a., gross monthly income of $6,166, net monthly income of $4,837 Employer contact: Joan Collins, HR Manager Length of service: 7 years Driver’s licence: 2897HT Email: [email protected] 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 28 West Street, Yagoona, NSW Phone: 02 9283 1365 Fax: 02 9283 1802 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 • residential investment 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. 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. 1. Identify which document you must provide your client once you have decided to provide credit assistance and explain the main features of that document. (100 words) Student response to Task 1: Question 1 Answer here 2. Identify which document you will provide the client should you intend to charge a broker fee and explain what is required for it to be valid. (100 words) Student response to Task 1: Question 2 Answer here Assessor feedback: Resubmission required? 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? Task 3 — Assessing the clients’ situation 1. Using the Excel 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. . 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? 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) Answer here Student response to Task 3: Question 2(b) Answer here Student response to Task 3: Question 2(c) Answer here Student response to Task 3: Question 2(d) Answer here Student response to Task 3: Question 2(e) Answer here Assessor feedback: Resubmission required? Task 4 — Using equity 1. Although Clinton and Jennifer have chosen to borrow 90% LVR on the investment property plus the LMI costs, what other option could you present that would avoid the cost of LMI? (100 words) Student response to Task 4: Question 1 Answer here Assessor feedback: Resubmission required? 2. Explain how it could be possible for Clinton and Jennifer to borrow 100% of the purchase price ($450,000) and obtain a tax benefit for the interest charged. (100 words) Student response to Task 4: Question 2 Answer here Assessor feedback: Resubmission required? 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 Answer here Assessor feedback: Resubmission required? 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 either on your knowledge of the products currently offered by your own organisation or on the products offered by a lender you have researched. In your proposal, you should include: • a summary of your understanding of the clients’ needs (this could be an outline summary of their proposed loan structure) • a summary of their current financial position (use information from the ‘funds to complete’ template completed in Appendix 1) • the product options you have considered that meet their needs (research two lenders and detail their loan features; you can use the internet or if working in industry, internal software) • the option you recommend and the reasons for the recommendation — explain how the recommended product meets the clients’ needs (refer to the case study and explain why you are recommending this lender) • disclosures applicable to the situation (a summary of likely applicable disclosures is adequate). Include disclosures in the Credit Guide and any conflicts of interest. 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 Answer here Assessor feedback: Resubmission required? 2. (a) Describe the home buyer assistance scheme benefits and stamp duty concessions that are available in your State or Territory, who would be eligible and what would be their benefit? Note: Please identify what State or Territory you are from in your answer (150 words). Student response to Task 6: Question 2(a) Answer here Assessor feedback: Resubmission required? 2. (b) Provide a summary of all additional costs and fees, that the couple should be made aware of. (100 words) Note: When considering your response, you can refer to your completed Appendix 1 which lists fees expected and charges. Apart from known costs, you can estimate other costs (i.e. pest inspection, rate etc.). Student response to Task 6: Question 2(b) Answer here Assessor feedback: Resubmission required? Task 7 — Clinton and Jennifer’s professional network 1. Name three (3) parties Clinton and Jennifer may wish you, as their broker, to keep informed of the progress of their finance application who are not directly involved in the loan processing? (100 words) Student response to Task 7: Question 1 Answer here Assessor feedback: Resubmission required? 2. It is important that as a broker you understand the loan application process and how to effectively manage the progress of a loan application. Outline to Clinton and Jennifer the process that will occur from your first meeting through to post settlement. Please present nine (9) steps in the process. (350 words) Student response to Task 7: Question 2 Answer here Assessor feedback: Resubmission required? 3. Briefly explain why is it important for the broker to remain informed of developments in the lending process despite not being actively involved at every stage? (100 words) Student response to Task 7: Question 3 Answer here Assessor feedback: Resubmission required? Task 8 — Interest rates Clinton and Jennifer have reconsidered the loan proposed and have called in to discuss whether they should consider fixing the interest rate on their proposed loan — they have conflicting opinions and are seeking your guidance. 1. Firstly, they need to understand the role of the RBA with respect to interest rates and why it is necessary to have these controls. Conduct some research and explain how the movements of interest rate occur in Australia and in relation to mortgage loans. Are banks obliged to follow the RBA cash rate? Explain. (200 words) Student response to Task 8: Question 1 Answer here Assessor feedback: Resubmission required? 2. Explain to Clinton and Jennifer some of the advantages and disadvantages of fixing a loan. (150 words) Student response to Task 8: Question 2 Answer here Assessor feedback: Resubmission required? 3. Suggest how Clinton and Jennifer could potentially manage the risks associated with fixing a loan in the event they need to break the fixed loan contract. (100 words) Student response to Task 8: Question 3 Answer here Assessor feedback: Resubmission required? 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 Answer here Assessor feedback: Resubmission required? Section 2: Case study 2 — Tony and Lorraine Denton Background Tony and Lorraine Denton have a small cleaning business at which they have been working for the last eight years. As it is only the two of them in the business they operate as sole traders. They have approached you to help restructure their finance, as they are finding the management of their debts a struggle following the loss of one of their major cleaning contracts. After further questioning, you realise that the situation is more serious than they originally explained; they have missed payments on their mortgage, only pay the minimum on their credit card of 3% each month and the work car they have on lease is expiring. They have a $15,000 residual or balloon payment due and do not have the funds available. When they lost the major contract and fell behind on the mortgage payments, they spoke to their lender (Popular Credit Union) and accepted a ‘hardship application’. The missing payments have now been corrected by extending the term of their loan. This happened nine (9) months ago and no report was made to the credit agency. After reading the case study above and reviewing their funding position below, answer the questions that follow: Assets 23 Watkins Road, Central Park $450,000 Popular Credit Union savings account (joint) $1,200 Little Saving Building Society cheque account (joint) $2,300 Business debtors (unpaid invoices for work) $6,200 Ford Utility, 3 years old (work vehicle) $25,000 Holden Commodore, 7 years old (family car) $15,000 Superannuation — AMB Insurance (Tony) $36,000 Superannuation — AMB Insurance (Lorraine) $24,000 Household effects (insured value) $60,000 Liabilities Lender Situation Interest rate Monthly repayment Debt Popular Credit Union (home loan — joint) Currently up to date though had 3-month extension to contract after hardship application 9 months ago 5.7% $1,567.00 $270,000 Big Bank Visa card (Tony) Only able to repay 3% per month for last 6 months 18.95% (pays 3% per month) $230.00 $7,600 (limit $8,000) Little Bank Visa card (Lorraine) Only able to repay 3% per month for last 6 months Is over limit by $800 21.5% (pays 3% per month) $90.00 $3,800 (limit $3,000) Hardly Normal Furniture Store Did not keep to interest free contract and paying debt by instalments 28.50% $380.00 $3,600 Super Car Loan lease 3-year contract expiring next month and need $15,000 to pay residual n/a $850.00 $15,000 (residual) Cleaning Contract Supplies Purchase approx. $1,000 per month in supplies, they are behind 1 month n/a $1,000.00 $1,800 Total $4,117.00 $301,800 Assignment tasks (student to complete) Task 10 — Establishing level of financial knowledge What communication skills might you use to confirm Tony and Lorraine’s understanding and knowledge about credit and finance, as well as their current position, including establishing their requirements and objectives with the refinance? (150 words) Student response to Task 10 Answer here Assessor feedback: Resubmission required? Task 11 — Responsible lending obligations The National Consumer Credit Protection Act 2009 imposes ‘responsible lending’ obligations on brokers that must be satisfied by all people arranging loan applications. The primary objective under responsible lending guidelines is that the credit facility offered to the borrower is ‘not unsuitable’ for the borrower, meets their requirements and objectives and will not create substantial hardship. 1. How would you define ‘substantial hardship’ (detailed information on this subject is found at RG 209 issued by ASIC)? (150 words) Student response to Task 11: Question 1 Answer here Assessor feedback: Resubmission required? 2. What are the benefits of debt consolidation for Tony and Lorraine? (100 words) Student response to Task 11: Question 2 Answer here Assessor feedback: Resubmission required? 3. Tony and Lorraine have decided to consolidate their debts into one home loan with two splits, one for the existing home loan and a second split for the all other debts. They will not be including the cleaning supplies bill as they pay this in full each month. In the template below provide a new liabilities summary once Tony and Lorraine have completed the debt consolidation including their new monthly repayments. Note: They have chosen ‘New Bank Loan’ who are offering a 4.5% interest rate on a variable, principal and interest loan over 30 years. Student response to Task 11: Question 3 Answer here Lender Interest rate Monthly repayment Debt Total Assessor feedback: Resubmission required? 4. What savings will Tony and Lorraine obtain in monthly repayments? (Include calculation how you determined the savings.) Student response to Task 11: Question 4 Answer here Assessor feedback: Resubmission required? Task 12 — Self Employed special considerations 1. As Tony and Lorraine are self-employed, what documents will you need to obtain and assess their income? (150 words) Student response to Task 12: Question 1 Answer here Assessor feedback: Resubmission required? 2. If a Low Doc application is an option for the customer, name three (3) extra documents you will need to obtain and assess. Explain how each these documents will establish their income? (150 words) Student response to Task 12: Question 2 Answer here Assessor feedback: Resubmission required? 3. Explain how applying for a ‘Low Doc Loan’ could lead the mortgage broker to be accused of recommending an ‘unsuitable’ product. (250 words) Student response to Task 12: Question 3 Answer here Assessor feedback: Resubmission required? Task 13 — Advising on strategies Following the presentation of your proposal, Tony and Lorraine say that they would like your advice regarding loan and debt management strategy tools that are available to help them to pay down their home loan as quickly as possible. List strategies or methods that will help them achieve their aim. Note to students: You may refer to the MoneySmart website for information on this subject and your answer may also include available mobile phone apps used for debt management. Provide the advantages and disadvantages of each. (300 words) Student response to Task 13 Answer here Assessor feedback: Resubmission required? Task 14 — Impact of credit history Tony tells you that his former wife failed to properly meet their unsecured personal loan debt obligations before they separated. Although he eventually repaid the debt he is afraid that this incident may count against him when he applies for a loan. There are a few things Tony can do as he is concerned about his credit rating. What information would you provide in the following two situations? 1. Provide Tony with the details of three (3) major credit reporting agencies and explain what information may be recorded on his credit file. (Information can be sourced from the websites of credit reporting agencies and .) (200 words) Student response to Task 14: Question 1 Answer here Assessor feedback: Resubmission required? 2. Tony has decided he would like to obtain a copy of his credit report from either Veda or Dun & Bradstreet. Explain what options are available for each provider, how long it takes to obtain a copy, and the associated costs. (100 words) Student response to Task 14: Question 2 Answer here Assessor feedback: Resubmission required? 3. If there are errors on file, what is the procedure for Tony to follow in order to have these errors rectified? Hint: Refer to the Veda website. (150 words) Student response to Task 14: Question 3 Answer here Assessor feedback: Resubmission required? 4. What are the Lender’s legal obligations if they decline an application due to the content of the credit agency file? (100 words) Student response to Task 14: Question 4 Answer here Assessor feedback: Resubmission required? 5. What options are available to Tony and Lorraine in the event that the loan was rejected by the lender you initially proposed due to a credit report (150 words) Student response to Task 14: Question 5 Answer here Assessor feedback: Resubmission required? Task 15 — External dispute resolution During the loan process, Tony 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. 1. As a broker it is important to understand the role of the Credit Ombudsman. Explain the function and role of the Credit and Investment Ombudsman (CIO) in the EDR process. (200 words) Student response to Task 15 Question 1 Answer here Assessor feedback: Resubmission required? 2. What could be the maximum penalty imposed by the CIO? (You can obtain this information on the CIO website.) (100 words) Student response to Task 15 Question 2 Answer here Assessor feedback: Resubmission required? 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. The lender has requested these documents be forwarded as soon as they are available. Tony and Lorraine are away at the moment and their email provider has a size limit on the data that can be sent via email. Name a service provider that could assist in solving this problem? (100 words) Student response to Task 16 Answer here Assessor feedback: Resubmission required? Appendix 1: Client information collection tool/ Fact Finder Appointment date: Appointment time: Applicant 1 Applicant 2 Surname Other names Contact details Address Phone (W) Phone (H) Mobile Email Employment How long? Previous employer (if less than 2 years) How long? Employment status PAYG Self-employed Gross income (p.a.) Number of dependants Motor vehicles Loan purpose Purchase price/Valuation Deposit Loan amount Genworth Borrowing capacity (Task 3) Assets and liabilities Assets Liabilities Details Market value Details Monthly payments Amount owing Owner Occupied Property at: Mortgage with: Investment Property at: Mortgage with: Investment Property at: Mortgage with: Cash at bank (includes fixed deposits) Car leasing Other cash (includes offset accounts) Personal loans 1. 2. Deposit paid on property Overdraft Motor vehicles: 1. 2. Other loans: 1. 2. Personal effects Credit card limit: $ Business value Credit card limit: $ Shares and investments Other: Superannuation Other: Other assets (give details) Other: Total assets Total liabilities Surplus/deficiency: $ CURRENT MONTHLY LIVING EXPENSES (Provide a breakdown of the total amount listed in the case study – use your discretion) Food/housekeeping Insurance (e.g. motor vehicles, home contents/ building, medical, life/income protection) Utilities (e.g. rates, gas, electricity, transport) Transport (e.g. public transport, petrol, registration, repairs) Education (e.g. school, college, university) Dependents support (e.g. childcare, child maintenance) Entertainment Other (detail below: MONTHLY LIVING EXPENSES Needs analysis 1 Name of your current lender? 2 What type of mortgage loan do you have? 3 Why did you choose this particular loan and lender? 4 What is the interest rate? 5 What are your payments? Amount 6 Frequency 7 Do you know the fees and charges? 8 What is your proposed purpose for the loan you are applying for? 9 Branch access available with current lender 10 Internet banking available with current lender 11 Phone banking available with current lender 12 Lenders not to be considered 13 Type of loan sought 14 Preferred Interest rate range 15 Payment frequency 16 Redraw 17 Offset 18 Salary crediting 19 Low fees and charges Notes Anticipated fees and charges Anticipated purchase price Deposit Loan amount LVR Purchase costs Stamp duty on transfer (include transfer fee) Solicitor/conveyancer (estimate) Rates and land taxes (estimate) Pest inspection (estimate) Building Inspection (estimate) Borrowing costs Application/establishment fee Valuation fee Security admin fee Mortgage stamp duty LMI Registration of mortgage Release of mortgage Search fees Other Total of purchase costs Funds to complete PURCHASE AND LOAN COSTS: AVAILABLE FUNDS: Purchase price: Deposit paid Lender application / valuation fees: Cash savings: Transfer stamp duty Sale proceeds: Legal and registration fees: Gift: FHOG: Other: LMI: 1. 2. No Add to Loan? TOTAL COSTS (A): TOTAL OWN FUNDS (D): LOAN AMOUNT REQUESTED (B): OWN FUNDS REQUIRED (A-B) = C: OWN FUNDS REQUIRED (A-B) = C SURPLUS/SHORTFALL (D-C) Loan interview diary Name(s) of client(s) present at interview Date of interview: Location of interview Indicate all clients who were interviewed in person Do all of the clients appear to clearly understand English? Y/N If not, have the services of an interpreter been recommended? Y/N Do all of the clients clearly benefit from taking out this loan? Y/N If not, what inquiries have been made to ascertain the level of benefit to each party of the loan? 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 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 of any unusual circumstances you may wish to record. Appendix 2: Serviceability calculator Loan details Loan amount $ Security value $ Loan term (in months) Actual rate Repayment type Interest only period (in years) LVR Commitments Actual living costs $ HEM living costs $ Total credit card limits $ Commitments (maximum 8) Commitment type Amount Frequency Limit/scheduled balance (plus redraw) Commtiment 1 $ Commtiment 2 $ Commtiment 3 $ Commtiment 4 $ Commtiment 5 $ Commtiment 6 $ Commtiment 7 $ Commtiment 8 $ Total commitments $ Serviceability calculations NDI ratio Net disposable income $ Assessment rate Monthly repayment $ Maximum loan amount $ Actual rate serviceability calculations NDI ratio Monthly repayment $ Actual interest rate Maximum loan amount $