ASSIGNMENT 1
To be completed by the Trainee
You must include this page with your Assignment 1 submission
Alternatively you can retype the details as a front page to your Assignment
Trainee name _________________________________________________________________________
Trainee Postal Address _______________________________________________________________
_______________________________________________________________
Trainee Daytime Phone numbers __________________________________________________________
Trainee Email address _________________________________________________________________
I state that this Assignment contains no material which has been written by another person. I make this statement with the understanding that my assessment may be compromised if found to be otherwise.
Signed _____________________________________________ Date __________________________
Submissions can be mailed to NFI, P.O. Box 1354, Capalaba B.C. Qld 4157 OR
Email to assessments@financeinstitute.com.au (if emailing you must adhere to the emailing size rules)
OFFICE USE ONLY BELOW HERE
Date received by NFI ____________________ Date received by Assessor ______________________
Name of Assessor ______________________________________________________________________
Date assessed ____________________________ Mark ____________________
Competent ?
Not Yet Competent ?
Assessor’s Comments: ...................................................................................................
......................................................................................................................................
......................................................................................................................................
......................................................................................................................................
Further action required (if applicable) ______________________________________________________
ASSIGNMENT 1
Task
Using the information contained in the Scenario below, please complete the following 6 tasks. You must complete each task for your submission to be assessed. Omission of any of these 6 tasks will be regarded as ‘Working Towards Competency’ and you will then be required to resubmit in full.
1. 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 to create 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 use their own form as an alternative to that provided in Appendix 14.
2. Recommend a product for the clients and explain your reasons for recommendation
3. List the supporting documents that would be needed to support the loan
4. Complete loan costing sheet *
5. Complete a loan servicing calculation (NSR) *
6. Complete a loan application form (an ANZ loan application form has been provided for you, which you must use) and complete all of the accompanying documents as provided for you. Your answer to this Activity should be prepared as if you were submitting a real 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 of review. It is to be submitted to NFI as if NFI is the lender and you were an accredited broker (but you do not need to make up “dummy” supporting documents eg. rates notice, etc.). If you do not submit 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 Costs worksheet) can be found in Unit 7 (use your own state-specific section at the back of Unit 7) and the instructions for how to complete the NSR form are in Unit 8. A Lenders Mortgage Insurance Chart (if you determine LMI is applicable) is found in Unit 7. Trainees should ensure they refer to Units 7 and 8.
Scenario
Clients: Mary Jane Dowell
DL No.: 4167384
DOB: 06/06/65 Australian Passport No.: L93214773
John James Dowell
DL No.: 4378691
DOB: 03/05/67 Australian Passport No.: L8078972
Current Address: 46 Collins Street, North Ryde NSW 2113
Time there, 2.6 years Phone 0411 123 456
Previous Address: 37 Maple Street, Gladesville NSW 2111 Time there, 4 years.
Children: 2 children aged 7 and 9
Scenario Continued overleaf ….
ASSIGNMENT 1 Continued
Existing Property: Own Home valued at $995,000
Current outstanding loan balance $180,000 (with CBA)
Loan Repayments $1,080 per month
Cash: 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)
Other: Mr and Mrs Dowell each have $85,000 in superannuation and they estimate their current home and contents to be worth $63,000
Mr Dowell works at the Parramatta Council as the tourism manager and earns $115,000 p.a. He has worked there for 8 years.
Mrs Dowell is a primary school teacher at Ryde Primary School and earns $64,000 p.a. She has worked there for the past 3 years after having several years of home duties.
The Dowells own two cars – a 2014 Ford Falcon worth $18,000 unencumbered and a 2015 Land Cruiser 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. The minimum 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 their excitement at buying their second property. They are aware they will need to visit the new lender branch to complete a Customer Identification Procedure prior to finance approval from the lender. They have not yet 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) Jones Rd, 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 the offer 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 567 890
Scenario Continued overleaf ….
ASSIGNMENT 1 Continued
Assumptions:
o Assume this is a cross collateralised loan
o Due to the client’s request below, assume this structure will be a Split facility
o Your clients have told you: that they want to keep the repayments on their home separate from their investment property. They would like to keep the repayments on their home as principal and interest but want to pay interest only on their investment property. (Note: all lenders will use the entire loan amount calculated at P&I, even if the loan is provided as Interest only). They also wish to pay out their personal loan on the car to rationalise their loan repayments. They have agreed that ANZ will be a suitable lender for their circumstances.
o Although addresses show NSW, for the purpose of duty and other cost calculations, assume that the clients live in the same state as you (the broker).
o You should assume a Standard Variable Rate of 5% and a Qualifying rate of 2.5% 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”.
Pleasenote:ThetableoflivingallowancesontheNSRsheetisbasedontheHendersonpovertyindexand maybeusedintheseassignmentsaswearenotusingarealclient.However,inreallifeASIChasruled thatabudgetmustbecompletedforeachclienttoassesslivingexpenses(weprovideasample budgetformatthebackofAppendixB20forinterest).
ASSIGNMENT 1 Continued
1. Complete the Fact Find provided in Appendix 14 or your own company’s Fact Find document (and improvise any information that has not been provided in the scenario).
2. Recommend a product for the clients and explain your reasons for the recommendation
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
3. List the supporting documents that would be needed to support this loan application. Even though there is a checklist in the lender’s application form, you must list the documents separately below.
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
...............................................................................................................................
4. Complete the loan costing sheet below
Estimate of Costs Worksheet – Purchase/Refinance
Client/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 ………………………………………………… $ _______________________
- Other ………………………………………………… $ _______________________ ===================
SUB TOTAL $ _______________________
Lenders Mortgage Insurance (if applicable)
Summary $ _______________________ ===================
TOTAL COSTS $ _______________________
Purchase price (if applicable) $ _______________________
Current Loan Amount/s $ _______________________
Plus 2 months interest on Current Loan (ie. 2 x monthly repayment) $ _______________________
PlusTotal Costs (from above) $ _______________________
PlusTotal Other Debt Consolidations (if applicable) $ _______________________
LessAny Deposit Paid (if applicable) $ _______________________
===================
EqualsTotal Funds Required $ _______________________
LVR: Total Funds Required $_____________ ÷ Client’s Total Security Value $_____________
Equals LVR ____________%
Client Signature: ………………………………………………………………. Date: ………………………………..
5. 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 only one 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, your loan repayment calculations in this NSR form should be calculated at Principal and Interest over 30 years.
FNS40815 CERTIFICATE IV IN FINANCE AND MORTGAGE BROKING – ASSESSMENT TASKS Page 9
NET SURPLUS RATIO (NSR)
Manual Serviceability Calculation
Name of Client/s
1. Loan Amount $
2. Security Value $
3. LVR %
Self-Employed - Annual
Profit & 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) $
LivingAllowances–Annual
Single income $17,906 Joint income $26,033
Single income plus 1 $24,593 Joint income plus 1 $32,360
Single income plus 2 $30,920 Joint income plus 2 $38,687
Single income plus 3 $37,248 Joint income plus 3 $45,014
Single income plus 4 $43,575 Joint income plus 4 $51,272
Summary
© 2019 The National Finance Institute V.190819 FNS40815 CERTIFICATE IV IN FINANCE AND MORTGAGE BROKING – ASSESSMENT TASKS Page 10
ASSIGNMENT 1 Continued
6. Complete the lender’s application form (a blank ANZ loan application form has been provided for you) and the other documents as provided for you. Your answer to this Activity should be prepared as if you were submitting a real full loan application to the lender. 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 please improvise. The application should be completed as neatly as possible to ensure ease of review. Tax charts, an LMI table (if required) and sundry forms can be found in your course content. You do not need to create any “dummy” supporting documents (eg. documents that your client would typically provide to you in a real submission, eg. rates notices), just ensure you list them where required.
For this question you must include the following 5 completed forms (all have been provided for you):
- Lending Checklist
- Credit guide / Disclosures
- Privacy statement and Consent
- Loan Application Cover Sheet - ANZ Application form
TIPS:
• 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 what is current ie. pre-settlement but Income and Expenses are to be shown as proposed ie. post settlement.
© 2019 The National Finance Institute V.190819
GET ANSWERS / LIVE CHAT