Assignment Task:

Case study: 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 the 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.

The loan requirements:
• 30-year term
• premium option home loan features
• variable interest rate (for this case using 4.5% p.a.)
• LMI to be capitalised
• proposed settlement date — six weeks from an exchange of contracts
• ability to make additional payments from time to time without penalty
• fortnightly repayment option
• redraw facility
• funds access via card.

Other information:
• They have advised that the Real Estate Agents have indicated they need to make a formal offer within the next 10 days, however, they are reluctant to do so until they obtain approval.
• Jennifer has asked if there are any professional package benefits available because she is an accountant. However, she did confirm she has not maintained her continuing professional development. 
• Jennifer previously owned and lived in an apartment with her two older sisters when they attended university but they sold this before she married — they did not make a lot from sale.
• Family plans are five years away.
• They do have plans to take a major overseas trip before family comes along.
• Philip is hoping for a promotion within the next 12 months upon possible retirement of a long-term employee where he works.

Task 1: Key terms, gathering and documenting client information

1. Complete the ‘Key terms’ (located at the end of the written assignment in Appendix 1).
2. Using the information provided in Case study 1, complete the ‘Client information collection tool’ (located at the end of the written assignment in Appendix 2).
3. You will also need to complete the Genworth Serviceability Calculator to assess the security, debt service and borrowing capacity for Jennifer and Phillip Brown. To do this, follow these steps:
(a) Use the details in Case study 1.
(b) Read the Genworth Calculator Supplementary Material Guide available in the Kaplearn DIPMB1v3 subject room.
(c) Process the loan application using the Genworth Serviceability Calculator accessible.
(d) Once you have processed it, download a copy of the PDF and save it to your desktop.

 

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  • Uploaded By : Alex Cerry
  • Posted on : January 28th, 2019

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