FNS40815 CERTIFICATE IV IN FINANCE AND MORTGAGE BROKING – ASSESSMENT TASKS Page 1
© 2020 The National Finance Institute V.010920
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 | _________________________________________________________________ |
By your submission you are stating that this Assignment contains no answers which have
been completed by another person. You acknowledge that your assessment marking may be
compromised if it is found to be otherwise.
Date _______________________________________________
Submissions can be uploaded or mailed to NFI, P.O. Box 1354, Capalaba B.C. Qld 4157 OR
Email to [email protected] (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) ______________________________________________________
FNS40815 CERTIFICATE IV IN FINANCE AND MORTGAGE BROKING – ASSESSMENT TASKS Page 2
© 2020 The National Finance Institute V.010920
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 in which case 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 task should be prepared as if you were
submitting a real 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.
* Important: 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 Units 7 and 8 are used to source correct figures for this assignment.
Scenario
| Clients: | Mary Jane Jackson DL No.: 4167380 |
DOB: 06/06/88 Australian Passport No.: L93214770
John James Jackson
DL No.: 4378690
DOB: 03/05/87 Australian Passport No.: L8078970
| Contact Phone No: Current Address: | Phone 0401 101 111 22 Collins Street, North Ryde NSW 2113 Time there, 2.6 years 33 Maple Street, Gladesville NSW 2111 Time there, 4 years. 2 children aged 7 and 9 |
| Previous Address: | |
| Children: |
Scenario Continued overleaf ….
FNS40815 CERTIFICATE IV IN FINANCE AND MORTGAGE BROKING – ASSESSMENT TASKS Page 3
© 2020 The National Finance Institute V.010920
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 The clients have $12,000 cash in the bank. CBA Visa – $5,000 limit (balance $2,000) Westpac MasterCard – $5,000 limit (balance $1,500) Mr and Mrs Jackson each have $85,000 in superannuation and they estimate their current home and contents to be worth $63,000 |
| Cash: Credit Cards: | |
| Other: |
Mr Jackson works at the Ryde Council as the development manager and earns $115,000 p.a. He has
worked there for 8 years.
Mrs Jackson is a librarian 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 Jacksons own two cars – a 2014 Ford Falcon worth $18,000 unencumbered and a 2010 Toyota Land
Cruiser worth $30,000 subject to Toyota Finance of $20,000 ($450 per month).
A few days ago, the Jacksons signed up for a 20 month Interest Free loan from Latitude for a sound/movie
system for $3,000. They paid a $50 establishment fee to avoid the monthly admin fee and their minimum
monthly payment is 5%.
You interviewed Mr and Mrs Jackson at your office after some initial telephone conversations previously.
They both spoke good English, they are Australian citizens of more than 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.
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 3870, Vol. 1820.
The solicitors they will be using are Henderson & Partners, ph 1234 567 890
Scenario Continued overleaf ….
FNS40815 CERTIFICATE IV IN FINANCE AND MORTGAGE BROKING – ASSESSMENT TASKS Page 4
© 2020 The National Finance Institute V.010920
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.
o Lenders will calculate servicing using the entire loan amount calculated at P&I,
even if the loan is provided as Interest only.
o The cilents 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 your 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”.
Please note: The table called Living Allowances on the NSR sheet is based loosely on the Henderson
Poverty Index and should be used in these assignments, including in the Fact Find form, as we are not
using a real client. However, in real life ASIC has ruled that a budget must be completed for each client
to assess living expenses (we provide a sample budget form at the back of Appendix B20 for interest).
FNS40815 CERTIFICATE IV IN FINANCE AND MORTGAGE BROKING – ASSESSMENT TASKS Page 5
© 2020 The National Finance Institute V.010920
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
Write or type your answer in this box
FNS40815 CERTIFICATE IV IN FINANCE AND MORTGAGE BROKING – ASSESSMENT TASKS Page 6
© 2020 The National Finance Institute V.010920
ASSIGNMENT 1 Continued
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.
Write or type your answer in this box
FNS40815 CERTIFICATE IV IN FINANCE AND MORTGAGE BROKING – ASSESSMENT TASKS Page 7
© 2020 The National Finance Institute V.010920
ASSIGNMENT 1 Continued
4. Complete the loan costing sheet below
Estimate of Costs Worksheet – Purchase/Refinance
Client/s Name: _______________________________________________________________________
| Owner Occupier: Estimated Costs: | Yes | No | Lender (if chosen): ________________________ |
| 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 (if applicable) Old Lender’s Settlement fee Miscellaneous Costs (if applicable): | $ _______________________ $ _______________________ |
– Other ……………………………………………… $ _______________________
– Other ………………………………………………… $ _______________________
– Other ………………………………………………… $ _______________________
===================
| SUB TOTAL | $ _______________________ $ _______________________ =================== | Lenders Mortgage Insurance (if applicable) |
TOTAL COSTS $ _______________________
Summary
| Purchase price (if applicable) Current Loan Amount/s Plus 2 months’ repayments on Current Loan (ie. 2 x monthly repayment) Plus Total Costs (from above) Plus Total Other Debt Consolidations Less Any Deposit Paid (if applicable) | $ _______________________ $ _______________________ $ _______________________ $ _______________________ $ _______________________ $ _______________________ =================== $ _______________________ |
| 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 8
© 2020 The National Finance Institute V.010920
ASSIGNMENT 1 Continued
5. Complete a 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
we have provided. 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
© 2020 The National Finance Institute V.010920
NET SURPLUS RATIO (NSR)
Manual Serviceability Calculation
Name of Client/s
| 1. |
| 2. |
| 3. |
| Loan Amount | $ |
| Security Value | $ |
| 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) | $ |
Individuals – Annual
| Gross Annual Income | Taxation | Net Annual Income | |
| Applicant 1 | $ | $ | $ |
| Applicant 2 | $ | $ | $ |
| Applicant 3 | $ | $ | $ |
| Average Adjusted Net Profit (from above if applicable) | $ | ||
| Total Net Income | $ | A |
Outgoings – Annual Loan Amount Annual Payment
| Loan (loan being applied for) | $ | $ |
| Personal loans | $ | $ |
| Other property loans | $ | $ |
| Credit cards | $ | $ |
| Other | $ | $ |
| Total Commitments | $ | |
| Less 80% annual rental income | $ | |
| Total Commitments | $ | B |
Living Allowances (Annual)
| Single income | $19,222 | Joint income | $27,946 |
| Single income plus 1 | $26,401 | Joint income plus 1 | $34,738 |
| Single income plus 2 | $33,193 | Joint income plus 2 | $41,530 |
| Single income plus 3 | $39,985 | Joint income plus 3 | $48,323 |
| Single income plus 4 | $46,778 | Joint income plus 4 | $51,040 |
Summary
| Annual Living Allowance (from above table) | $ | |
| Total Commitments (from B above) | $ | |
| Total Outgoings (C) | $ | C |
| C (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 Serviceability Calculators, which may or may not be similar to this practice sheet. |
FNS40815 CERTIFICATE IV IN FINANCE AND MORTGAGE BROKING – ASSESSMENT TASKS Page 10
© 2020 The National Finance Institute V.010920
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.