Philip and Jennifer Case Study - Repayment Requirements - Accounting and Finance Assignment Help

Assignment Task :

Section 1: Case study 1 — Philip and Jennifer Brown

Background

Philip and Jennifer Brown are a young couple about to buy their first home. They have been married for five years and during that time have rented an apartment while saving for their own home. 

Following a personal referral from Glenn Brown, Philip’s brother you have already had a first meeting with Philip and Jennifer to discuss their objectives and needs. They admitted they have little time to do much research of lenders, have limited knowledge of the loan products available and have approached you to guide them through the process as they are confused.

During (and subsequent) to your first meeting, Philip and Jennifer have provided the basic information documents — pay slips, tax returns, bank statements, property details for review/verification. You have now undertaken your preliminary assessment and need to discuss and present to them the proposal covering the options and your recommendations. It is important to get the proposal moving quickly, as the agent has indicated other parties are interested in the property.

They have been looking at properties for the past three months and have found a 10 year old established apartment that has really caught their eye, although they have some concern over the kitchen which requires some minor renovations.

They have not paid a deposit at this stage, but the Real Estate Agent has provided some guidance on additional fees and charges.

Following is a summary of the details of the property they wish to purchase, the couple’s financial and employment details, and the loan features they require.

Task 2 — Assessing the clients’ situation

1. Based on the information provided in the case study and any other online tools used, you now need to assess the clients’ loan application paying particular attention that you have met legislative requirements, followed industry codes of practice and met lender credit policy. 

Comment on issues such as:

• does it appear to meet legislative requirements (e.g. NCCP)

• maximum borrowing capacity of client

• capacity to meet deposit and total cash contribution for the loan required

• repayment requirements based on the loan required

• what the security will be and if it is appropriate

• do Jennifer and Phillip require Lenders Mortgage Insurance (LMI), and if so, how much will it cost and what are the options to pay the fee

• what loan amount would you recommend, and why

• likelihood that the clients will be able to meet all their financial obligations

• do Jennifer and Philip qualify for concessions on any of the fees and charges 

• any other issues that may impact, now or in the future, on the clients’ ability to meet their obligations, including any possible risks.

Provide data to support your comments and conclusions.

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