Loan Application Process - Accounting Assignment Help

Assignment Task

Task: Case Study – Loan application preparation
You will notice that there are two options of Case Study within this assessment – the first (A) is more specifically for Mortgage Brokers, the second (B) for brokers in the Plant & Equipment and Motor Vehicle field. Please complete only the stream relevant to you and indicate this on the assessment cover sheet.
Choosing one of the case studies presented below, prepare a loan file from contact with the clients to preparing the loan application for lodgement with the client’s lender of choice.
In completing this task, you need to demonstrate to your assessor that you are competent in the following areas and able to:
communicate ideas and information
collect, analyse and organise information
plan and organise activities
work with others in a team
use mathematical ideas and techniques
solve problems by providing solutions
use technology.
To do this you will need to compile a report (Client Needs Review/Fact Find) indicating your thoughts and processes on different aspects of your application. These may include, but are not limited to:
the choice of loan product for your client and the information about the loan product that you presented to them. Where you located the product information. Remember there is no right/wrong answer to this area, it is always subjective.
the use of technology to compare the product/fees, find information on the products etc.
how you would work in a team situation with your co-workers, lenders, real estate agents, mentor etc.
In areas where you do not have copies of actual supporting documentation, insert a page with the name of the document you would include e.g. copy of driver’s licence for the client.
There are a number of templates in the Member’s Area under ‘Useful Resources’ that you could use in your submission.
Remember there is no right or wrong answer as each client you see presents a new challenge and if you can provide solutions for those challenges you will be well regarded and successful in this industry.
Because this course is taken nationally, we ask that you localise addresses and places of employment so that you can have familiarity with the assessment.
You will have to take into account any necessary adjustment of stamp duty concessions for first home buyers. This will have to be considered when discussing and setting out the fees and costs with your clients. You will have to contact your Office of State Revenue to determine the correct amount of benefits to which your clients are entitled.
Case study A (Residential mortgage)

BACKGROUND
Mark Armstrong, a friend from the local tennis club, has suggested you contact a couple known to him (the Hendersons) who are seeking their first home loan. They have been renting and wish to establish some permanency by purchasing a block and building a home. A referral agreement with Mark has been completed in compliance with regulations.
Currently the family is renting in a suburb near you and paying $475 per week in rent to the local Ray White real estate office. Due to diligent saving after very heavy previous medical expenses for their son Michael, they find themselves in a satisfactory financial position. They have purchased a block of land within reasonable distance from the high school and are negotiating with a builder.
APPLICANT DETAILS
Alan Jacob Henderson of 17 Capital Court, In a suburb near you. (4 years)
DOB 04.01.1982
EMPLOYMENT Marketing Manager - National Clients
EMPLOYER Hi-Temp Gas
ADDRESS 21 Alwyn Street, In your City
CONTACT Tel: (H) 91000000 (B) 87643210 (M) 0419999999
Facs: 91000001
Email: hendo@hitemp.com.auWebsite: www.hitempgas.com.au
PERIOD 6 YEARS
GROSS INCOME $111,000 p.a
MOTOR VEHICLE Fully maintained
Cheryl Ann Henderson of 17 Capital Court, In a suburb near you. (4 years)
DOB 07.03.1981
EMPLOYMENT Law Clerk
EMPLOYER Smith, Smith and Smith
ADDRESS Suite 14, 12 Flinders Street, In your City
CONTACT Tel: (H) 91000000 (B) 65432101 (M) 0416667901
Facs: 03 10000001
Email: cherylann@smithys.com.au
Website: www.smithslegal.com.au
PERIOD 6 YEARS
GROSS INCOME $65,000 p.a.

OTHER DETAILS
DEPENDENTS Jennifer Ann Henderson DOB 07.03.2004
Michael Alan Henderson DOB 07.03.2004
NEAREST RELATIVE NOT LIVING WITH APPLICANT John Joseph Henderson (Brother)
108 Budburst Ave, In a suburb near you0410000000
BANK DETAILS NAB – BSB: 001 002 A/c Number: 1234567
REAL ESTATE AGENT Flying High Estate Agents
4 Birdsnest Avenue, In a suburb near you.
CONTACT: Hugh Talon Tel: 10000700 Facs: 10000080Email: hught@gmail.comBULDER Homes Plus More (Master Builders)
38 Archdeacon Street West, In a suburb near you.
CONTACT: Grace Love
Tel: 40000000 Facs: 40000003
Email: grace@hpm.com.auCONVEYANCING FIRM Lightning Settlements
Suite 3, 4 Business Ave, In a suburb near you.
CONTACT: Louise Stratton
Tel: 10004000 Facs: 10005000
Email: lulu@lightningsetts.com.au
PROPOSED ADDRESS Lot 47 Eaglehawk Circle, In a suburb near you.
LAND DESCRIPTION Lot 47 on Plan of Subdivision 731680Z
PARENT TITLE Volume 11580 Folio 996
Created by instrument PS725680G 04.04.2018
VENDOR Inspired Developments Pty Ltd
Suite 114/ 100 Bridge Road, In a suburb near you.
Tel: 50000001 Facs: 50000002
Email: Info @inspired.com.au

SETTLEMENT DATE 14/00/20XX
When completing your Fact Find/ Client Needs review please remember the Duty of Care. One of the most important questions you should ask is about Risk Protection. Have the clients considered the ramifications of financial hardship caused by illness, accident or death? The Q & A component of the CNR covers this adequately. You are made aware their contents are insured but they have no insurance policies covering life, trauma and income protection. This is where you ask what cover they consider is enough in view of the financial commitments they are now planning? Will Cheryl have to visit Centrelink if an unforeseen event happens to Alan and vice versa? Should they have to change their lifestyle? Not if the Broker carries out all the requirements to provide the clients’ needs.

CASE STUDY ASSESSMENT OPTIONS:
If you are in a State or Territory that FHOGs are available to both forms of home purchasing, choose a new home acquisition (Block ‘n’ Build) option for your case study (you do not have to complete one of each).
If at some later stage the FHOGs rise or fall, please adjust the applicable purchase prices to cater for those changes as this task forms an important part of the assessment process and must be completed.
Students in all jurisdictions will have to adjust the land and construction costs to fit in the capped amount criteria.

SCENARIO:
The Hendersons:
signed a contract of sale subject to finance for three (3) weeks
have $110K in a savings account
are eligible for FHOG (don’t forget to add the FHOG amount to their funds to complete and remember to make up a maiden name for the female applicant)
paid a $24K deposit (from the $110K in the savings account) on the $240K block of land
estimate construction costs will be in the vicinity of $350-360K
estimate they will spend an additional $32K on new furniture and curtains
wish to use $78K of their savings as equity/deposit
pay off their credit cards in full every month.
You are to interview the clients and propose a loan structure that will suit their needs. They have indicated that they would like to be provided a minimum of three (3) sound lending strategies acceptable with different providers.
The above are points of discussion that should appear in your interview notes to ensure that what you are proposing is not unsuitable for the clients for you to address responsible lending.
STATEMENT OF ASSETS & LIABILITIESforALAN J HENDERSON AND CHERYL A HENDERSON
As at 00 / 00 / 00XX
ASSETS LIABILITIES
LimitOwePaymentLender
$$$$
Bank Savings (NAB) 17,000
Cash Management A/c
Bankwest 93,000
20XX Mitsubishi Outlander 27,000 21,000 539 88.PCM ANZ
Furniture 95,000
Collectables 40,000
Share Portfolio 25,000
Superannuation (AJH) 177,860
(CAH) 89,141
CREDIT CARDS
NAB VISA (AJH) 5,000221.00 (cleared monthly)
Westpac VISA (CAH) 4,000 878.00 (cleared monthly)

TOTALS $ 564001$9,000 $22,099.00$539.88
STATEMENT OF ASSETS & LIABILITIESforALAN J HENDERSON AND CHERYL A HENDERSON
As at 00 / 00 / 00XX
ASSETS LIABILITIES
LimitOwePaymentLender
$$$$
Bank Savings (NAB) 17,000
Cash Management A/c
Bankwest 93,000
20XX Mitsubishi Outlander 27,000 21,000 539 88.PCM ANZ
Furniture 95,000
Collectables 40,000
Share Portfolio 25,000
Superannuation (AJH) 177,860
(CAH) 89,141
CREDIT CARDS
NAB VISA (AJH) 5,000221.00 (cleared monthly)
Westpac VISA (CAH) 4,000 878.00 (cleared monthly)

TOTALS $ 564001$9,000 $22,099.00$539.88

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