FINANCE AND MORTGAGE BROKING

FNS40815 CERTIFICATE IV IN FINANCE AND MORTGAGE BROKING – ASSESSMENT TASKS Page 1© 2017 The National Finance Institute V.080217ASSIGNMENT 1TaskUsing the information contained in the Scenario below, please complete the following 6 tasks. Youmust complete each task in order for your submission to be assessed. Omission of any of these 6 taskswill be regarded as Working Towards Competency and you will then be required to resubmit in full.
Complete the Fact Find document on these clients – using the form in Appendix 14. We have not included all supplementary information on these clients so you will need tocreate your own “improvised” answers for inclusion in the Fact Find document.Trainees who already have access to their own version of a Fact Find template may usetheir own form as an alternative to that provided in Appendix 14.
Recommend a product for the clients and explain your reasons for recommendation
List the supporting documents that would be needed to support the loan
Complete loan costing sheet *
Complete a loan servicing calculation (NSR) *
Complete a loan application form (an ANZ loan application form has been provided foryou which you must use) and complete all of the accompanying documents as providedfor you. Your answer to this Activity should be prepared as if you were submitting areal full loan application to the lender.Please note: If there is information required on the ANZ application form that is not supplied,please improvise. The application should be completed as neatly as possible to ensure ease ofreview. It is to be submitted to NFI as if NFI is the lender and you were an accredited broker (butyou do not need to make up “dummy” supporting documents eg. rates notice, etc). If you do notsubmit in a professional manner, your assessment will not be marked.
The fees and charges required in order to complete this assignment correctly (ie. Estimate of Costsworksheet) can be found in Unit 7 (use your own state-specific section at the back of Unit 7) and theinstructions for how to complete the NSR form are in Unit 8. A Lenders Mortgage Insurance Chart(for your LMI calculation if applicable) is found in Unit 7. Trainees should ensure they source theirfees and charges from these units.ScenarioClients: Mary Jane DowellDL No.: 4167384DOB: 06/06/65 Australian Passport No.: L93214773John James DowellDL No.: 4378691DOB: 03/05/67 Australian Passport No.: L8078972Current Address: 46 Collins Street, North Ryde NSW 2113Time there, 2.6 yearsPhone 0411 123 456Previous Address: 37 Maple Street, Gladesville NSW 2111Time there, 4 years.Children: 2 children aged 7 and 9Scenario Continued overleaf ….FNS40815 CERTIFICATE IV IN FINANCE AND MORTGAGE BROKING – ASSESSMENT TASKS Page 2© 2017 The National Finance Institute V.080217ASSIGNMENT 1 ContinuedExisting Property: Own Home valued at $995,000Current outstanding loan balance $180,000 (with CBA)Loan Repayments $1,080 per monthCash: The clients have $12,000 cash in the bank.Credit Cards: CBA Visa – $5,000 limit (balance $2,000)Westpac MasterCard – $5,000 limit (balance $1,500)Mr Dowell works at the Parramatta Council as the tourism manager and earns $115,000 p.a. He hasworked there for 8 years.Mrs Dowell is a primary school teacher at Ryde Primary School and earns $64,000 p.a. She has workedthere for the past 3 years after having several years of home duties.The Dowells own two cars – a 2011 Ford Falcon worth $18,000 unencumbered and a 2011 Pajero worth$30,000 subject to finance of $20,000 ($450 per month).The Dowells have a 36 month Interest Free loan from GE for a sound/movie system for $3,000. Theminimum monthly payment is 5%.You interviewed Mr and Mrs Dowell at your office after some initial telephone conversations previously.They both spoke good English as they are permanent Australians for 20 years and they expressed theirexcitement at buying their second property. They are aware they will need to visit the new lender branchto complete a Customer Identification Procedure prior to finance approval from the lender. They have notyet enquired into an exact payout figure from CBA.The clients wish to refinance their current loan and purchase an investment property.The investment property is an established 2 bedroom unit in a residential block of 4 at 45 (Lot 4) JonesRd, North Ryde and is valued at $685,000.Rental Income of $650 per week is expected and the body corporate expense will be just $35 per week.They have made an offer on the unit at the asking price, have put down a $1000 cash deposit, and theoffer has been accepted with settlement in 60 days.Title particulars: Lot 4, Folio 3871, Vol. 1821.The solicitors they will be using are Henderson & Partners, ph 1234 567 890Scenario Continued overleaf ….FNS40815 CERTIFICATE IV IN FINANCE AND MORTGAGE BROKING – ASSESSMENT TASKS Page 3© 2017 The National Finance Institute V.080217ASSIGNMENT 1 ContinuedAssumptions:o Assume this is a cross collateralised loano Due to the client’s request below, assume this structure will be a Splitfacilityo Your clients have told you: that they want to keep the repayments on their homeseparate from their investment property. They would like to keep the repaymentson their home as principal and interest but want to pay interest only on theirinvestment property. They also wish to pay out their personal loan on the car torationalise their loan repayments. They have agreed that ANZ will be a suitablelender for their circumstances.o Although addresses show NSW, for the purpose of duty and other costcalculations, assume that the clients live in the same state as you (the broker).o You should assume a Standard Variable Rate of 5.5% and a Qualifying rate of 2%above the Standard Variable Rate (for your NSR form).o Assume the current car loan will be paid out by the refinance of the home.o Assume the clients will be “full-doc”.Please note: The table of living allowances on the NSR sheet is based on the Henderson poverty index andmay be used in these assignments as we are not using a real client. However in real life ASIC has ruledthat a budget must be completed for each client to assess living expenses (we provide a sample budgetform at the back of Appendix B20 for interest).FNS40815 CERTIFICATE IV IN FINANCE AND MORTGAGE BROKING – ASSESSMENT TASKS Page 4© 2017 The National Finance Institute V.080217ASSIGNMENT 1 Continued
Complete the Fact Find provided in Appendix 14 or your own company’s Fact Finddocument (and improvise any information that has not been provided in thescenario).
Recommend a product for the clients and explain your reasons for therecommendation……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………FNS40815 CERTIFICATE IV IN FINANCE AND MORTGAGE BROKING – ASSESSMENT TASKS Page 5© 2017 The National Finance Institute V.080217ASSIGNMENT 1 Continued
List the supporting documents that would be needed to support this loanapplication. Even though there is a checklist in the lender’s application form, youmust list the documents separately below.…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………FNS40815 CERTIFICATE IV IN FINANCE AND MORTGAGE BROKING – ASSESSMENT TASKS Page 6© 2017 The National Finance Institute V.080217ASSIGNMENT 1 Continued
Complete the loan costing sheet belowEstimate of Costs Worksheet – Purchase/RefinanceClient/s Name: __________________________________________________________Owner Occupier:  Yes  No Lender (if chosen): ___________Estimated Costs:Lender’s Loan Establishment/Application Costs $ ___________Valuation cost (if not included above) $ ___________Property Transfer Stamp Duty $ ___________Solicitor/Settlement Agent/Conveyancing Charge $ ___________Registration of new Mortgage $ ___________Register of Transfer of Title $ ___________Title Search $ ___________Discharge of old Mortgage $ ___________Old Lender’s Settlement fee $ ___________Miscellaneous Costs (if applicable):
Other ……………………………………………… $ ___________
Other ………………………………………………… $ ___________

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SUB TOTAL $ ___________

TOTAL COSTS $ ___________SummaryPurchase price (if applicable) $ ___________Current Loan Amount/s $ ___________Plus 2 months interest on Current Loan $ ___________Plus Total Costs (from above) $ ___________

Equals Total Funds Required $ ___________LVR: Total Funds Required $_____________ ÷ Client’s Total Security Value $_____________Equals LVR __%Client Signature: ………………………………………………………………. Date: ………………………………..FNS40815 CERTIFICATE IV IN FINANCE AND MORTGAGE BROKING – ASSESSMENT TASKS Page 7© 2017 The National Finance Institute V.080217ASSIGNMENT 1 Continued
Complete the loan servicing calculation (NSR) by completing the form overleaf.TIP: Remember this NSR calculation is based on 2 security properties, but you use onlyone NSR form. You should calculate your loan repayments based on the qualifying rate.Even though the clients have requested Interest Only for their investment property slip,your loan repayment calculations in this NSR form should be calculated at Principal andInterest.FNS40815 CERTIFICATE IV IN FINANCE AND MORTGAGE BROKING – ASSESSMENT TASKS Page 8© 2017 The National Finance Institute V.080217NET SURPLUS RATIO (NSR)Manual Serviceability CalculationName of Client/s
Loan Amount $
Security Value $
LVR %Self-Employed – AnnualProfit & Loss Statement (year) 20___ (year) 20___ (year)Net profit $ $Director’s salary (if applicable) $ $Depreciation $ $Interest on debt being refinanced $ $Other $ $Net Profit $ $Average Adjusted Net Profit (then transfer to table below) $Individuals – AnnualGross Annual Income Taxation Net Annual IncomeApplicant 1 $ $ $Applicant 2 $ $ $Applicant 3 $ $ $Average Adjusted Net Profit (from above if applicable) $Total Net Income $ AOutgoings – Annual Loan Amount Annual PaymentLoan (loan being applied for) $ $Personal loans $ $Other property loans $ $Credit cards $ $Other $ $Total Commitments $Less 80% annual rental income $Total Commitments $ BLiving Allowances – Annual (Dec 2014)Single income $17,906 Joint income $26,033Single income plus 1 $24,593 Joint income plus 1 $32,360Single income plus 2 $30,920 Joint income plus 2 $38,687Single income plus 3 $37,248 Joint income plus 3 $45,014Single income plus 4 $43,575 Joint income plus 4 $51,272SummaryAnnual Living Allowance (from above table) $Total Commitments (from B above) $Total Outgoings (C) $ CC (Total Outgoings) as a % of A (Total Income). [ C÷A x 100 = ] NSR equals ____ %We have created this form for practice purposes only. Each lender will have their own assessment criteria and their own ServiceabilityCalculators, which may or may not be similar to this practice sheet.FNS40815 CERTIFICATE IV IN FINANCE AND MORTGAGE BROKING – ASSESSMENT TASKS Page 9© 2017 The National Finance Institute V.080217ASSIGNMENT 1 Continued
Complete the lender’s application form (a blank ANZ loan application form has beenprovided for you) and the other documents as provided for you. Your answer to thisActivity should be prepared as if you were submitting a real full loan application to thelender. Remember you must treat this as a cross-collateralised loan structure.Please note: If there is information required on the application that is not supplied pleaseimprovise. The application should be completed as neatly as possible to ensure ease of review.Tax charts, an LMI table and sundry forms can be found in your course content. You do notneed to create any “dummy” supporting documents (eg. documents that your client wouldtypically provide to you in a real submission, eg. rates notices), just ensure you list them whererequired.For this question you must include the following 5 completed forms (all have beenprovided for you):
Lending Checklist
Summary of product choice
Privacy Act, Disclosure and Consent
Loan Application Cover Sheet
ANZ Application formTIPS:Use the LMI table in Unit 7 to calculate your LMI and don’t forget LMI stamp duty.Page 6 of the ANZ form is where you show your split facility structure.On page 9 of the ANZ form Assets and Liabilities should be shown as current / pre-settlementbut Income and Expenses are to be shown as proposed / post settlementFNS40815 CERTIFICATE IV IN FINANCE AND MORTGAGE BROKING – ASSESSMENT TASKS Page 10© 2017 The National Finance Institute V.080217

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