Task 11 — Usingequity
1. How is it possible for John to borrow 100% of the purchase price + costs?
Student response to Task 11: Question 1
2. Assuming John uses the same bank to finance his home and the investment property he wishes to purchase, what is the loan to value ratio (LVR)? Please show the percentage up to two decimal places in your answer.
Student response to Task 11: Question 2
Task 12 — Self Employed special considerations
1. As John is self-employed via his company, name three (3) possible extra documents you will need to obtain and assess?
Student response to Task 12: Question 1
2. If a Low Doc application is an option for the customer, name three (3) extra documents you will need to obtain and assess.
Student response to Task 12: Question 2
3. Explain how applying for a ‘Low Doc Loan’ could lead the mortgage broker to be accused of recommending an ‘unsuitable’ product.
Student response to Task 12: Question 3
Task 13 — John’s professional network
1. Name three (3) parties John may wish you to keep informed of the progress of his finance application.
Student response to Task 13: Question 1
2. Briefly outline to John the process that will occur from your meeting onwards.
Student response to Task 13: Question 2
3. Although some of these stages do not involve the mortgage broker, briefly explain why it is important to keep abreast of developments.
Student response to Task 13: Question 3
Task 14 — Impact of credit history
John tells you that his former wife failed to properly meet their unsecured personal loan debt obligations before they separated. Although John eventually repaid the debt he is afraid that this incident may count against him when he applies for a loan.
What would you advise Johnabout:
1. Name two of the major credit reporting agencies and advise what information these files contain?
Student response to Task 14: Question 1
2. Advise what procedure is involved and the associated costs to obtain a copy of your own file from each of these agencies on both an urgent and a non urgent basis and can a free copy be obtained?
Student response to Task 14: Question 2
3. If there are errors on the file what is the procedure for John to follow in order to have these errors rectified
Student response to Task 14: Question 3
4. What are the Lender’s legal obligations if they decline an application due to the content of the credit agency file
Student response to Task 14: Question 4
Task 15 — External dispute resolution
During the course of the loan process, John 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.
If COSL was your EDR provider, explain their role in the process.
Student response to Task 15
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.
John’s away at the moment, and his email provider has a size limit on the data that can be sent via email.
What is a potential solution for John, and name a provider that could assist?
Student response to Task 16
Appendix 1: Client information collection tool
Applicant 1 Applicant 2
Contact details Address
Phone (W) Phone (H)
Gross income ( p.a.)
Number of dependants
Assets and liabilities
Details Market value Details Monthly payments Amount owing
Property at: Mortgage with:
Property at: Mortgage with:
Property at: Mortgage with:
Cash at bank Car leasing
Other cash Personal loans
Deposit paid on property Overdraft
Personal effects Credit card limit: $2000
Business value Credit card limit: $3000
Shares and investments Other:
Other assets (give details) Other:
Total assets Total liabilities
1 Name of your current lender?
2 What type of loan do you have?
3 Why did you choose this particular loan and lender?
3 What is the interest rate?
4 What are your payments? Amount
6 Do you know the fees and charges?
7 What is your proposed purpose for the loan proceeds?
8 Branch access available
9 Internet banking available
10 Phone banking available
11 Lenders not to be considered
12 Type of loan sought
13 Interest rate
14 Payment frequency
17 Salary crediting
18 Low fees and charges
Anticipated fees and charges
Anticipated purchase price $
Loan amount $
Stamp duty on transfer $
Rates and land taxes $
Pest inspection $
Application/establishment fee $
Valuation fee $
Security admin fee $
Mortgage stamp duty $
Registration of mortgage $
Release of mortgage $
Search fees $
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 any unusual circumstances you may wish to record