FNS40821 - Certificate IV in Finance and Mortgage Broking

Case Study 1 Philip and Jennifer Brown

Background

Philip and Jennifer Brown are a young couple preparing to purchase their first home. They have been married for five years and have spent that time renting an apartment while saving for their own property.

Before living with Philip, Jennifer owned a property jointly with her sisters. The property was sold once they completed university, but the sale did not yield significant profit. Because of this, the applicants believe they are not eligible for a government-sponsored First Home Owner Grant.

The couple was referred to you by Glenn Brown (Philip’s brother). You had an initial phone call with Jennifer to schedule a meeting. She explained that they have limited time to research lenders, lack knowledge of available loan products, and are seeking your guidance as they find the process confusing.

They have been viewing properties for the past three months and are particularly interested in a 10-year-old established apartment. However, they are concerned about the kitchen, which needs some minor renovations. The real estate agent has indicated there are other interested buyers, so moving quickly is crucial.

The couple has not yet paid a deposit, though the agent provided some guidance on fees and charges. They want a loan with a low interest rate (between 5.5% and 6.25%) and an offset account to help reduce interest costs. They stated they can afford repayments up to $5,000 per month.

Property Details

• Address: Unit 1, 92 Golf Links Way, Bundoora VIC 3083

• Certificate of Title: Volume 10120, Folio 456, Folio Identifier 5

• Purchase Price: $790,000

• Description: 3-bedroom, 2-bathroom strata title apartment with kitchen/family area, lounge, 2-car garage, and golf course views

• Agent Details: Stephanie Jones

• Phone: (03) 9123 1113

• Mobile: 0412 880 088

Couple’s Details

• Current Address: Unit 12, 22 Wentworth Lane, Thomastown VIC 3074

• Time at Address: 5 years

• Home Phone: 0419 123 456

Funds Position

• Purchase Price: $790,000

• Estimated Costs (stamp duty and other fees): $50,000

• Total Required: $840,000

• Loan Amount: $710,000 + Lenders Mortgage Insurance (LMI)

• Maximum Contribution (deposit + savings): $130,000

(Note: Fees and charges applicable to Victoria. Use postcode 3083 if required in servicing calculator.)

Assets

• Capital Bank savings account (joint): $132,000

• Capital Bank transaction account (joint): $18,600

• Nissan Patrol 2020 (Philip): $75,000

• Kia Cerato Sport 2019 (Jennifer): $25,000

• Superannuation (Philip, Capital Bank): $88,000

• Superannuation (Jennifer, Capital Bank): $72,000

• Household effects (insured value): $80,000

Liabilities

• Capital Bank personal loan (Philip): Balance $15,600 (repayments $480/month, interest 7.5%)

• Capital Bank Visa (Philip): $200 balance (limit $5,000, cleared monthly — company card)

• Capital Bank Visa (Jennifer): $1,600 balance (limit $4,000)

Note: Minimum monthly commitment for each credit card is calculated at 3% of the credit limit.

Living Expenses

• Annual living expenses: $36,000

Employment and Income

Philip Brown (Age 32)

• Position: Team Leader (full time)

• Employer: ACE Limited, 101 City Road Westside, Melbourne VIC 3000

• Phone: 0419 123 456

• Income (gross): $108,000 per year ($9,000 monthly gross, $6,869 net per month)

• Length of Service: 12 years

• Employer Contact: Priya Kumar, HR Manager

• Driver’s Licence: 8855KL

• Email: philipb@ace.com.au

Jennifer Brown (Age 31)

• Position: Compliance Manager (full time)

• Employer: Tech City, 804 High Street, Docklands VIC 3008

• Phone: 0412 987 654

• Income (gross): $125,000 per year ($19,416 monthly gross, $7,806 net per month)

• Length of Service: 11 years

• Employer Contact: Dominic Mancini, HR Manager

• Driver’s Licence: 17016C

• Email: jbrown@techcity.com.au

Case Study 2 Mary Azacca

Background

Mary currently has a home loan with an online lender. She recently attempted to negotiate a rate reduction but was unsuccessful. Friends suggested she compare other lenders for better deals.

Mary feels frustrated with:

• The poor customer service she receives.

• The lack of integration between her banking facilities and her home loan.

She is divorced (five years ago) and, although she received settlement funds that allowed her to purchase her own home, she still carries a sizeable mortgage. She lives in a four-bedroom, two-bathroom house on a large corner block. Although the home is large for one person, she plans to keep it for at least five years before considering downsizing. Her young adult children, both financially independent, occasionally live with her until they purchase their own homes.

Mary was referred to you by her colleague, Adib Bursal , who praised your services. She expects the same high standard of professional guidance. While she has had joint loans in the past, this is her first experience making significant financial decisions independently.

Mary’s primary objective is to refinance her mortgage with Simply Home Loans Ltd. She would prefer a bank with a retail presence and is especially interested in reducing her current interest rate.

Her current loan:

• Variable rate loan.

• Offset account with a $10 monthly fee.

• Redraw facility with a $25 fee.

She wishes to:

• Make extra repayments to reduce her loan balance.

• Retain access to these funds through redraw if needed.

Mary also mentioned that she may have a default listing on her credit report from three years ago due to late payments during her divorce. Although payments were never more than 30 days overdue, she suspects one may have exceeded that period. This did not prevent her from securing her current loan with a risk-rated non-bank lender.

Following your preliminary assessment (based on pay slips, tax returns, bank statements, and property details), you are preparing a refinancing proposal to present to her.

Personal Information

• Name: Mary Azacca

• Age: 48

• Current Address: 8 North Road, Rockingham WA 6168

• Time at Address: 2 years

• Home Phone: (08) 8594 6168

• Email: mary.azacca@gmail.com

Employment and Income

• Position: Nursing Unit Manager (full time, shift work)

• Employer: Allied Health Services Ltd, Perth WA 6000

• Employer Contact: Andrew Jenkins, CEO

• Phone: 0439 258 478

• Length of Service: 18 years

• Annual Income: $130,000 (excluding overtime)

• Monthly Gross Income: $10,833

• Net Monthly Income: $8,069

• Driver’s Licence: 25974MV

Living Expenses

• Annual expenditure: $30,000

Assets

• House at 8 North Road, Rockingham WA: $590,000

• Western Bank savings account (2.55% interest): $24,000

• Western Bank term deposit (12 months fixed, 4.7%): $20,000

• Holden Commodore SS 2007 (collector’s car): $25,000

• Nissan Qashqai 2021: $21,000

• Share portfolio (IAG shares): $18,000

• Superannuation — HESTA: $480,000

• Household effects (insured value): $115,000

Property / Security Details

• Address: 8 North Road, Rockingham WA 6168

• Certificate of Title: Volume 78567, Folio 449, Folio Identifier 10

• Description: 4-bedroom, 2-bathroom house on a 700 sqm block

• Purchase Price (2 years ago): $480,000

• Current Valuation: $590,000

• Valuing Real Estate Agent: Lloyds Real Estate

• Landline: (08) 8123 1113

• Mobile: 0415 990 099

Liabilities

• Home Loan: Current balance $330,000

• Western Bank Visa Card: Balance $700 (limit $5,000, interest 12%)

Note: Minimum monthly credit card commitment = 3% of the limit.

Existing Loan Details

• Lender: Simply Home Loans (mortgage manager, no banking services)

• Loan Account Number: 34-451-9955

• Original Loan Amount: $360,000

• Original Term: 25 years

• Monthly Repayments: $2,529

• Current Interest Rate: 6.80% (variable)

• Outstanding Balance: $330,000

• Lump Sum Payment Made: $20,000 (after 12 months)

Loan Requirements

Mary’s refinancing objectives include:

• New 20-year loan term

• No monthly account or redraw fees

• Premium home loan features

• Variable interest rate (competitive, determined by comparison calculator)

• Flexibility to make additional repayments without penalty

• Fortnightly repayment option

• Redraw facility

• Offset account

• Access to funds via card

Case Study 3 Ravi and Alice Patel

Background

Ravi and Alice Patel are ready to purchase their first investment property. They have lived in their current home for ten years and would like to use the equity they have built up to purchase an investment property in Kingswood, a suburb in Sydney’s west.

Kingswood has:

• A hospital

• A university

• A new shopping precinct under development

They believe this area is poised for growth.

Personal details

• Ravi: Self-employed carpenter specialising in renovations and extensions.

• Alice: Interior designer, working part-time since the arrival of their children.

• Plan: Purchase an older property, renovate it themselves, and increase its value for future investment opportunities.

Alice contacted your office based on a Facebook recommendation. They previously faced complications in securing their first home loan due to Ravi being self-employed, so they want a broker’s assistance this time.

You met with them at their home and received their documents: payslips, tax returns, profit and loss statements, company balance sheet, bank statements, and property details.

They found a 3-bedroom, 2-bathroom established home on an 800 sqm block in Kingswood. The property needs:

• New kitchen

• Laundry built internally (currently on back patio)

• Outdoor deck repairs

Ravi will do the renovations, Alice will paint and decorate.

They have signed a Contract of Sale, paid a 10?posit, and settlement is due in 60 days. They want to finance the full purchase amount and have the $66,000 deposit returned to their offset account.

Client Loan Product Requests

The clients have requested costings for:

1. Variable loan to refinance their existing home loan with annual fee package (credit card + offset).

2. Fixed-rate loan (3 years), interest-only for the investment property.

3. Interest-only variable rate loan for the investment property.

4. Home equity (line of credit) for future use — not required for current purchase.

5. Credit card with interest-free period and low rate (no other features).

6. Overdraft account for business purposes.

The Property

• Address: 3 Premier Street, Kingswood NSW 2747

• Certificate of Title: Volume 789654, Folio 365, Folio Identifier 8

• Purchase price: $660,000

• Description: 3-bedroom, 2-bathroom house, 800 sqm block

• Agent details: James Holmes – Star Partners

• Landline: (02) 9148 0025

• Mobile: 0419 147 874

The Couple

• Current address: 12 Mascot Street, Lidcombe NSW 2141 (10 years)

• Home phone: (02) 9784 0454

Funds Position

• Purchase price: $660,000

• Estimated statutory costs: $30,000

• Total required for purchase: $685,000

• Renovations: $25,000

• Loan amount: $715,000

• Client’s contribution: $0 (want to borrow 100% + costs)

• Stamp duty: To be calculated using NSW state rules.

Assets

• Penrith Mutual savings (joint): $65,000

• Penrith Mutual transaction account (joint): $2,500

• Residential property (12 Mascot Street, Lidcombe): $1,300,000

• Toyota Prado 2019: $48,000 (financed via redraw)

• Boat (Bar Crusher 2021): $65,000

• Superannuation (Ravi): $300,000

• Superannuation (Alice): $120,000

• Household effects (insured value): $140,000

Liabilities

• Home loan (P&I variable): Balance $450,000 | Repayments $2,727/month | Interest 6.1%

• North Bank Visa card (Alice): $800 (limit $5,000)

  • Minimum repayment: 3% of credit limit = $150/month

Credit history: All payments up to date, previous loans repaid in full.

Living Expenses

• Annual expenditure: $54,000

Employment and Income

Ravi Patel (Age 44)

• Position: Company Director – Carpenter

• Employer: Self-employed, Jayzar Carpentry Pty Ltd

• Time in business: 15 years

• Contact: 0419 456 123

• Driver’s licence: 789456

• Email: ravi@jayzar.com.au

• Income for serviceability:

  • Average wages: $90,000 p.a.

  • Company profits: $82,000 p.a.

Alice Patel (Age 42)

• Position: Senior Designer (part-time)

• Employer: Elite Style Pty Ltd

• Length of service: 25 years

• Contact: (02) 9741 1254 (CEO: Prudence Fairchild)

• Driver’s licence: 784125

• Email: alicep@elitestyle.com.au

• Gross income: $85,000 p.a.

• Monthly gross: $7,083

• Net monthly: $5,434

Company Information

• Name: Jayzar Carpentry Pty Ltd

• ABN: 48 521 369

• Sole Director: Ravi Patel

• Phone: 0419 456 123

• Time in business: 15 years

• Email: ravi@jayzar.com.au

Company Assets:

• Cash at bank (working account): $25,000 credit

• Accounts receivable: $30,000

• Ford Ranger Raptor: $68,000

• Trades Trailer: $5,000

• Tools: $15,000

Company Liabilities:

• Penrith Mutual Business Visa: $500 balance | $10,000 limit | Cleared monthly

• Penrith Mutual Chattel Mortgage (Ford Ranger Raptor): $30,000 owing | Repayments $750/month

Company Income:

• Year 20X1 NPBT: $100,000 | NPAT: $75,000 | Depreciation: $8,000 | Director’s wages: $80,000

• Year 20X2 NPBT: $105,340 | NPAT: $79,000 | Depreciation: $5,000 | Director’s wages: $100,000

• Average NPAT (2 years): $77,000

• Average Director’s wages: $90,000

• Depreciation (lowest): $5,000

Solicitor Details

• Eastern Conveyancing

• Address: 18 Rocks Road, Sydney NSW 2000

• Phone: (02) 9351 8796

• Email: easternconveyancing.com.au

• Quoted fee: $2,500

Loan Requirements

• Loan amount: $715,000 (investment)

• Application fee: Nil

• Valuation fee: $600

• Cross-collateralised with owner-occupied property

• Term: 25 years (investment loan)

• Interest-only variable interest rate: 6.6% p.a.

• Interest-only term: 5 years (then P&I)

• Settlement: 60 days from exchange of contracts

Refinance Existing Loan

• Current loan remains unchanged

• Amount: $450,000

• Term: 30 years

• Type: Principal and Interest, variable rate

Section 1: Industry Knowledge

Task 1

Question 1
(a) List three (3) ways a mortgage broker can assist a client if interest rates rise as a result of a change to the cash rate.
(b) Are banks and other lenders obligated to adjust their lending rates on loans secured by mortgages following changes made by the Reserve Bank? Explain the basis for your answer.

Question 2
(a) How do lenders apply the serviceability buffer rate (also known as the “loan assessment rate”) when determining if a borrower can afford a loan repayment in the event of an interest rate rise?
(b) What buffer margin does APRA currently impose on banks?

Task 2

Question 1

1. Provide the applicants with the online resource for the first-home buyers grant and explain how this website is helpful.

2. Provide the website URL address for an online resource that could assist clients in managing their budget, and describe how it will help them better manage their finances.

3. Provide the online resource (website URL) you would research to address the client’s requirements and objectives, and clarify how to make an appropriate recommendation.

Question 2
(a) Would leaving a liability off the Fact Find and Credit Application potentially breach the responsible lending requirements of the National Credit Code (NCC)? Please explain the basis for your answer.
(b) If the NCC were breached, what would the consequences be for the brokerage, your aggregator, and your licence authority?

Question 3
Prepare speaking notes covering the key features of the Privacy Act 1988.
Additionally, describe whether it was appropriate for a loan processing team member to request a borrower’s partner to provide their Tax Assessment Notice even though they were not a party to the loan. What went wrong and why?

Question 4
(a) List the key parts of the Banking Code of Practice (25 February 2025 version) that may directly relate to the activities of arranging and servicing a client’s needs.
(b) List at least two (2) items of information that must be provided to a client when providing financial products and services.
(c) Explain the rationale as to why the items listed in part (b) are given to the customer.
(d) What three (3) factors does the Code advise about when providing banking services to vulnerable clients?

Question 5
(a) Explain why your decision not to recommend refinancing the loan is both ethical and in the best interests of the client.
(b) Review the Banking Code of Practice and provide some direction of what the bank may be able to do for your client in their present situation.

Question 6
(a) What communication methods could you use to convey the changes required under RG273 Mortgage Brokers: Best Interests Duty to staff?
(b) Prepare an email to your colleagues explaining what changes could be made to your organisation’s policy, procedures, and practices to ensure the best interests duty is being applied.

Question 7
(a) Where would you commence to check if the broker is applying the correct procedures when charging fees to arrange loans?
(b) Which ASIC Information Sheet or industry Code of Practice might be helpful in guiding how fees can be charged? What obligation is required when charging fees?
(c) Who would you seek assistance from in your organisation?

Question 8
(a) What is one effective way to monitor compliance during the loan process from interview to settlement?
(b) What essential items should be included in the monitoring process?
(c) Who will undertake the monitoring and audit process?
(d) What tools will be available to use to conduct an audit?
(e) What role can AI technology play in the loan process to improve compliance and time management?

Task 3

Question 1
Complete the product table for a minimum of six (6) loan products that Ravi and Alice Patel can consider.

Question 2
(a) Outline at least three (3) current trends in the home loan industry that may be beneficial for marketing home loan products for CCF & MB.
(b) Describe how using AI sources assists you to research current trends.

Question 3
(a) How does the brokerage market and promote its products and services?
(b) Where can you locate the brokerage’s current promotions and specials?
(c) What process can be used to identify clients in the CRM whose needs match products and services that are part of a current promotional strategy?
(d) What is one effective way to keep your product knowledge up to date? Include the methods and/or systems you could use.

Question 4

Explain to Philip and Jennifer Brown how a deposit bond works and outline some of the benefits, including the risks of purchasing at auction with a deposit bond if finance or lender mortgage insurance is required.

Section 2: Business Skills

Task 4

Question 1
Scenario 1: How can you apply active listening and thoughtful questioning techniques during a loan interview, and why is this significant?
Scenario 2: What style of writing would you select when preparing broker notes for the lender, and why?
Scenario 3: What writing style would you select when composing an email to a colleague, and why?

Question 2

Provide tips that can help communicate more effectively with clients from different cultural backgrounds where English may not be their first language.

Task 5

Question 1
(a) Explain why it is important for individual work goals to align with organisational goals.
(b) When planning the team’s work goals, which organisational framework would you refer to?
(c) Which colleague should the new loan consultant consult with if they require clarification of their role responsibilities?

Question 2
(a) Where would you source details of the new loan consultant’s role responsibilities?
(b) How will you support the new team member to set goals to achieve their targets?
(c) List the technologies the new team member will be required to be trained to use.

Question 3
(a) Provide a list of four (4) industry resources a team member can access to help with CPD requirements.
(b) As the team leader, how can you encourage and help in the team’s personal and professional development?

Question 4
(a) How would you approach a situation where your team is not meeting KPIs and a health or well-being issue may have arisen?
(b) Draft an email to the team outlining strategies to positively manage health and well-being in the workplace.

Question 5
(a) Summarise Jennifer Dee’s report scorecard and comments on her overall performance over the last twelve (12) months.
(b) Highlight one area for Jennifer to focus on in the next quarter and provide a practical suggestion.

Question 6
Create a Professional Development Plan (PDP) including:

1. Three (3) professional development activities you need to undertake to achieve your goals as a team leader.

2. The resources you can refer to.

3. The timeframe you have set.

4. Two (2) formal training or CPD activities relating to the industry.

Question 7

(a) Prepare a PDP for a loans administrative officer with at least two (2) development areas.
(b) Prepare a PDP for a newly qualified mortgage broker with at least two (2) development areas.

Task 6

Question 1
List and explain three (3) processes that a business can use to gather feedback from its clients.

Question 2a
Select three (3) survey responses and record the feedback details, including what actions you would take to rectify.

Question 2b
Draft a customer service improvement report covering:
• Stakeholders to consult.
• Three (3) areas where customer service can be improved and changes to monitor satisfaction.
• Two (2) strategies to implement improvements and how team members can be made accountable.

Task 7

Question 1
Mr Joseph Harper has complained about delays in his loan application assessment. How would you respond and report on this complaint?

Section 3: The Lending Process

Task 11 ― Understanding the client’s needs

Question 1
Mary Azacca (Case Study 2) has been referred to you by one of your existing clients that you have assisted several times over the years. Following your initial Zoom interview with Mary where you gathered some basic information there were several matters you need to prepare for the next meeting.

To get a clear understanding of the refinancing request from Mary there are several aspects of her current financial position and future plans you need to know to assist in making a recommendation that is both “not unsuitable” and in Mary’s best interests.

(a) What questions will you ask Mary in the follow up interview? Provide at least four (4) types of ‘specific customer requirements’ Mary may have.

(b) What product recommendations do you think would be ‘unsuitable’ in Mary’s situation?

Question 2
Mary Azacca (Case Study 2) had some past credit issues and was concerned it may impact on qualifying for a bank loan. To address Mary’s concerns, provide the following information:

Why is it important that the client provides all the details about their credit history to their broker at the beginning of the loan process? Should Mary be concerned about the past “default notice”?

Task 12 ― Developing and presenting solutions

Question 1
The client solution goes beyond merely delivering a product that satisfies their requirements. Developing a solution for your client’s needs also entails addressing the security or collateral essential for the lender’s loan product.

(a) What is the security document used by the lender for:
(i) a home loan
(ii) a car loan
(iii) a loan to a company

(b) What is the security document called when a director offers their home as collateral for a company loan?

Task 13 ― Packaging the application to send to the lender

Question 1
(a) Explain which documents you would collect from an applicant to verify:
(i) A PAYG employee’s income? How would you determine the annual income from these documents?
(ii) The rental income for an existing investment property.

(b) Complete the table below and prepare a question that you could ask a client to confirm you understand the information contained in the document provided.

Question 2
Ravi and Alice Patel (Case Study 3) have forwarded several documents in support of the loan request.
You are satisfied with the financial information supplied by Ravi, and Alice is satisfactory, but no information has been provided concerning the investment property. What documents will the lender expect to be forwarded with the application?

Task 14 ― Monitor the lending process

Question 1
Provide one (1) example of further information a lender may request. Explain common reasons for the additional information.

Section 4: Case Studies

Task 15 ― Case Study: Purchasing an owner-occupied home

Question 1
You have just arranged an appointment over the phone to meet with Jennifer and Philip.
Compose an email to the clients detailing the objectives of your initial meeting. Ensure to include the following points:

(a) The documents you are attaching to the email for their consideration.

(b) Include the following information in your email:
(i) the services, values and capacity CCF & MB has to offer
(ii) your background, credentials and your role as their broker
(iii) the commercial relationship that your firm has with the product providers (i.e. the lenders on your panel).

Task 16 ― Completing the fact find

Question 1
From the information in Case Study 1 for Jennifer and Philip Brown, complete the following tasks:
(a) Using the client information collection tool/fact finder below, complete:
(i) assets and liabilities
(ii) needs analysis
(iii) credit representative notes
(iv) anticipated fees and charges
(v) funds to complete

Task 17 — Assessing the clients’ situation

Question 1
Assume you have conducted your initial face-to-face meeting and have provided and sought the necessary information from your clients. Explain a minimum of three (3) regulatory and legislative requirements that you have met so far in dealing with this application. Include the documents you would have provided to the client in the initial meeting.

Question 2
As part of assessing the clients’ situation, a broker is required to determine the approximate cost of the Lender’s Mortgage Insurance (LMI) premium.

(a) Will Jennifer and Philip be required to pay LMI and why or why not?
(b) If so, what would the premium be?
(c) What two (2) options are available to borrowers to pay the LMI fee?

Question 3
In the previous question, you used the Helia LMI Fee Estimator to work out the LMI premium for Philip and Jennifer Brown.

(a) What is Philip and Jennifer’s maximum loan amount?
(b) What is their combined total gross and net incomes?
(c) What is the proposed monthly loan repayment, based on the actual interest rate of 6.00%?

Question 4
Brokers must also take into account any anticipated changes to a client’s financial situation under responsible lending requirements.

(a) Using an AI tool (e.g., ChatGPT), input basic client data and answer the question above.
(b) Explain how this information could be helpful for the clients.

Question 5
Many clients struggle with the choice between a variable-rate loan and a fixed-rate loan.

(a) Explain to Philip and Jennifer the process you use to research and identify the various product options available to address this issue.
(b) Explain to Philip and Jennifer two (2) advantages and two (2) disadvantages of fixing a loan over different fixed rate terms.
(c) What options can you present to Philip and Jennifer that may remove this interest rate risk if they don’t want to fix the rate for the entire loan? What advantages might this type of loan structure offer to the customer?

Question 6
Most lenders stress test home loan repayments by adding a 3.0% buffer to the interest rate to make sure the borrower can afford repayments over the medium term.

If interest rates increased by 3.0%, what would Philip and Jennifer’s loan repayments be, and do you think they would be able to cope with the extra repayment amount?

Task 18  Presenting borrowing options and potential benefits

Question 1
While Philip and Jennifer are considering borrowing at around 90% LVR, what other options could help them avoid LMI costs? Provide your client with at least three (3) options to consider.

Task 19 – Supporting the client to settlement

Question 1
How will you stay updated on developments during the lending process through to settlement without being involved at every stage? What role could you have in the settlement process for Philip and Jennifer Brown at the time of settlement? Provide one example.

Question 2
Philip and Jennifer have signed and submitted the application form and related documents, and they now have formal loan approval.

(a) Suggest one or two ways to enhance or maintain the CCF & MB delivery standards.
(b) How would you document the improvements you wish to make to the Client Service Standards, and to whom might you submit your review of the standards?

Task 20 – Case Study 2: Refinancing a Home Loan

Question 1
Complete a Fact Find for Mary Azacca using the client data collection tool, including:

• Assets and liabilities

• Needs analysis

• Anticipated fees and charges

• Funds to complete

Task 21 – Preparing a Preliminary Assessment

Question 1
As part of the preliminary assessment for Mary, and in accordance with the best interest duty (ASIC RG 273):
(a) Enter the current loan data for Mary and the proposed loan solution into the MoneySmart calculator and provide the results.
(b) Would you recommend that Mary refinance based on the calculator results? Explain the benefit of switching loans and other considerations.

Question 2
Prepare a Preliminary Assessment:

1. Input the requirements and objectives.

2. Use Canstar (or similar) to select three (3) suitable loan products for Mary.

3. Complete conflict of interest disclosure and suitability assessment.

Question 3
Prepare and send an email presentation to Mary including:
(a) A summary of your understanding of Mary’s needs.
(b) A summary of her current financial position.
(c) An explanation of at least three (3) product options that meet her needs.
(d) Your recommended option, including loan amount, term, repayments, and reasons.
(e) Invite questions from Mary.
(f) Seek agreement from Mary to proceed. (200 words)

Question 4
Mary emails with questions. Draft a reply email:
(a) Address Mary’s request regarding opening a bank account for disbursement of funds and payments.
(b) Inform her of the next steps after acceptance of the Credit Proposal and approximate timing. (100 words)

Question 5
How and where would you file all gathered documents and communications securely? (30 words)

Question 6
Explain to Mary the steps involved to settlement, the costs, timeframe, and any issues that could delay settlement. (20 words)

Task 22 – Case Study 3: Purchasing an Investment Property

Question 1
To commence the process, complete the following sections:
(a) Client information collection tool/fact finder
(b) Assets and liabilities
(c) Needs analysis
(d) Credit representative notes
(e) Anticipated fees and charges
(f) Funds to complete

Task 23 – Preparing a Loan Proposal

Question 1
Complete a credit proposal disclosure by researching two (2) suitable finance options for Ravi and Alice.

Question 2
Prepare an email presentation to clients including:
(a) Understanding of client’s requirements
(b) Summary of two product options
(c) Preferred option and reasons
(d) Invite questions from clients
(e) Section for client approval to proceed (100 words)

Question 3
Send a reply email to Ravi addressing his questions:

1. Explain clients’ rights to obtain a written assessment.

2. Clarify requirement for comparison rates and difference between interest and comparison rates.

3. Discuss alternatives to cross-collateralisation. (100 words)

Task 24 – Loan Contracts and Security Documentation

Question 1
List at least six (6) key points to verify in loan offer documents before signing. (30 words)

Question 2
Research and provide advice:
(a) Guidelines in the Banking Code of Practice concerning guarantors and who should provide guidance.
(b) Advice on obtaining a second mortgage – benefits, interest rates, disadvantages, and first mortgage lender approval. (20 words)

Question 3
Explain to clients:

• Key contract law principles before signing loan offer documents.

• CCF & MB’s client service standards for informing clients about settlement dates. (20 words)

Question 4
How would you notify the client that the loan offer documents have been executed correctly and settlement is ready? (15 words)

Task 25 – Preparing the Loan for Settlement

Question 1
Clarify why it is necessary to confirm the following pre-settlement checks:
(a) Building insurance
(b) Independent legal advice (40 words)

Question 2
Explain to Ravi and Alice the next steps in the settlement process, including personnel involved at each step. (100 words)

Question 3
Prepare a pre-settlement statement for the purchase of the investment property.

Question 4
Explain the steps in registering security documentation. (50 words)

Question 5
(a) How and where do you store client information and communications?
(b) After settlement, what else would you do to maintain a lasting relationship with the clients? (30 words)

Brief of Assessment Requirements

The assessment is a comprehensive project designed to evaluate the student’s knowledge and skills in mortgage broking, compliance, business skills, and the end-to-end lending process. It integrates three detailed case studies (Philip & Jennifer Brown, Mary Azacca, and Ravi & Alice Patel) and covers a wide scope of tasks including:

• Industry knowledge : Serviceability buffers, responsible lending, compliance obligations, Privacy Act, Banking Code of Practice, and best interest duty.

• Research & client support : Providing online resources, explaining grants, product comparison, and addressing refinancing scenarios.

• Business skills : Communication, active listening, report writing, cultural awareness, team leadership, KPIs, professional development planning, and customer service improvements.

• The lending process : Conducting fact finds, preliminary assessments, LMI calculations, loan comparisons, product selection, compliance documentation, and settlement processes.

• Case study applications : Applying knowledge practically to three client scenarios—first home purchase, refinancing, and investment property purchase.

Key objectives:

1. Demonstrate responsible lending practices.

2. Apply regulatory and ethical frameworks.

3. Research and present suitable lending products.

4. Communicate effectively with clients and colleagues.

5. Showcase business and compliance skills in mortgage broking.

Mentor’s Step-by-Step Guidance

The Academic Mentor guided the student through the assessment in a structured way, ensuring that each section was approached logically and tied to real-world industry practices.

Step 1: Understanding Case Studies & Client Needs

• Mentor helped the student break down each case study (first home, refinancing, investment property).

• Focus was placed on identifying financial positions, liabilities, goals, and client preferences.

• Students were taught to apply a Fact Find process to ensure no critical information was missed.

Step 2: Linking Regulatory & Ethical Requirements

• Mentor emphasized the importance of responsible lending (NCCP), APRA buffer requirements, and compliance with the Privacy Act 1988.

• Students were guided on how to integrate Banking Code of Practice obligations when drafting responses.

• For each question, the mentor reminded students to justify recommendations ethically (e.g., not refinancing if it harms the client).

Step 3: Research & Resource Utilization

• Mentor explained how to use ASIC, MoneySmart, Canstar, and state government sites for grants, budgeting tools, and loan comparisons.

• AI tools (like ChatGPT) were introduced as a way to test repayment scenarios and stress-test loans while still cross-checking with industry calculators.

Step 4: Product Comparisons & Financial Analysis

• Students were shown how to complete product comparison tables for Ravi and Alice Patel, including variable, fixed, and interest-only loans.

• The mentor reinforced the importance of serviceability calculations, LMI estimates, and repayment affordability checks.

• The process of explaining advantages and risks of deposit bonds, refinancing, and loan structures was highlighted for client-facing communication.

Step 5: Business & Communication Skills

• Mentor coached the student on how to:

  • Write professional emails to clients (initial meeting, loan proposals, clarification emails).

  • Draft internal communications to colleagues (policy updates, compliance notes).

  • Apply active listening and questioning in client interviews.

• Special attention was given to communicating with culturally diverse clients and maintaining professionalism in writing styles.

Step 6: Team & Professional Development

• Students were guided to prepare Professional Development Plans (PDPs) for different roles (loan officer, mortgage broker, team leader).

• The mentor stressed aligning personal goals with organisational KPIs.

• Importance of ongoing CPD, training, and feedback systems was explained.

Step 7: The Lending Process

• Mentor explained step-by-step:

  1. Fact find & needs analysis (collecting data).

  2. Preliminary assessment (serviceability, product match, risk assessment).

  3. Loan packaging (collecting payslips, property documents, ID, etc.).

  4. Application submission to lender.

  5. Monitoring process & compliance checks (audits, communication logs).

  6. Settlement and post-settlement support.

• Real-world examples were used to demonstrate what lenders look for and how brokers add value beyond product selection.

Step 8: Outcome & Reflection

• The student was guided to provide clear, structured answers showing both knowledge and application.

• Mentor highlighted how the work achieved the following learning objectives:

  • Applied regulatory frameworks (NCC, APRA, ASIC, Privacy Act).

  • Demonstrated best interest duty and ethical decision-making.

  • Showcased loan comparison and financial analysis skills.

  • Strengthened business communication and leadership skills.

  • Developed a clear understanding of end-to-end mortgage broking processes.

Final Outcome

By the end of the assessment, the student produced a solution that:

• Mapped client needs accurately in each case study.

• Recommended appropriate loan products with justification.

• Applied compliance and ethical standards consistently.

• Communicated professionally with clients and colleagues.

• Showcased critical thinking in deciding when not to refinance or when to restructure loans.

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