CIVMB_AS_v5A2: Certificate IV in Finance and Mortgage Broking - Finance Assignment Help

Assignment Task:

Background

Philip and Jennifer Brown 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 saving for their own home. 

Following a personal referral from Glenn Brown, Philip’s brother you have already had a first meeting with Philip and Jennifer to discuss their objectives and needs. They admitted they have little time to do much research of lenders, have limited knowledge of the loan products available and have approached you to guide them through the process as they are confused.

During (and subsequent) to your first meeting, Philip and Jennifer have provided the basic information documents — pay slips, tax returns, bank statements, property details for review/verification. You have now undertaken your preliminary assessment and need to discuss and present to them the proposal covering the options and your recommendations. It is important to get the proposal moving quickly, as the agent has indicated other parties are interested in the property.

They have been looking at properties for the past three months and have found a 10 year old established apartment that has really caught their eye, although they have some concern over the kitchen which requires some minor renovations.

They have not paid a deposit at this stage, but the Real Estate Agent has provided some guidance on additional fees and charges.

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.

Task 1 — Key terms, gathering and documenting client information

1. Complete the ‘Key terms’ (located at the end of the written assignment  

2. Using the information provided in Case study 1, complete the ‘Client information collection tool’ (located at the end of the written assignment in Appendix 2).

3. You will also need to complete the Genworth Serviceability Calculator to assess the security, debt service and borrowing capacity for Jennifer and Phillip Brown. To do this, follow these steps:

(a) Use the details in Case study 1.

(b) Read the Genworth Calculator Supplementary Material Guide available in the Kaplearn DIPMB1v3 subject room.

(c) Process the loan application using the Genworth Serviceability Calculator accessible here: 

(d) Once you have processed it, download a copy of the PDF and save it to your desktop. 

Task 2 — Assessing the clients’ situation

1. Based on the information provided in the case study and any other online tools used, you now need to assess the clients’ loan application paying particular attention that you have met legislative requirements, followed industry codes of practice and met lender credit policy. 

Comment on issues such as:

• does it appear to meet legislative requirements (e.g. NCCP)

• maximum borrowing capacity of client

• capacity to meet deposit and total cash contribution for the loan required

• repayment requirements based on the loan required

• what the security will be and if it is appropriate

• do Jennifer and Phillip require Lenders Mortgage Insurance (LMI), and if so, how much will it cost and what are the options to pay the fee

• what loan amount would you recommend, and why

• likelihood that the clients will be able to meet all their financial obligations

• do Jennifer and Philip qualify for concessions on any of the fees and charges 

• 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)

Case study 2 — Richard and Pauline Jackson

Background

Richard and Pauline Jackson have a small mowing and gardening business in which they have been working for the last eight years. As it is only the two of them in the business they operate as a partnership.

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 commercial property contracts.

After further questioning, you realise that the situation is more serious than they originally explained; they had missed payments on their mortgage, only pay the minimum on their credit card of 3% each month and the work ute they have on lease is expiring. They have a $15,000 residual payment due and do not have the funds available.

They lost the major contract 12 months ago and fell behind on the mortgage payments soon after. They spoke to their lender (First and Last Bank) and a ‘hardship application’ was approved. The missed payments were corrected by extending the term of their loan. Nothing adverse was recorded on their credit file but they are still struggling with all the monthly commitments.

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