Loan Application Process Pearson BTEC Level 5 HND Diploma Business

Proposed loan strategies

• Diversification: by using a capped interest rate
• Taking loans from banks using the safety net
• Targeting low-cost flexible loans.

From the assessment, it has been identified that Frederick John and Margaret Anne are eligible to get grants from the state commission office (Apply for the First Home Owner Grant, 2018).

EVIDENCE ENCLOSED

PART B

On the basis of Lender Mortgage Insurers guidelines following aspects need to be met for the purpose of loan approval. Below mentioned image shows that the loan volume ratio varies as per investment type. In the case mortgage case scenario, pertaining to vacant land, under the category of 90.1% to 95% loan ratio, the maximum amount implies $600000 respectively.  On the other side, in the case of a 0-90% loan volume ratio, the maximum loan amount implies $700000, $400000 & $200000 respectively from categories 1 to 3. Hence, as per the guidelines provided by the lender mortgage insurer, depicted below, the loan application will be verified and then approved. Further, lender analysts need to ensure that the firm is following the aspects of responsible lending conduct obligations as per the National Consumer Credit Protection Act 2009 in checking, verifying, and maintaining records (Responsible lending, 2018).

(Source: Maximum LVR and Loan Amount Matrix. 2018)

PART C

Completion of a Customer File

1. Customer contact sheet record

Customer: Frederick John and Margaret Anne

 Banks: Commonwealth Bank (Big Four Bank home loan rate comparison, 2018)

 Government bodies: The state commission office is offering $10000 to the couple as they are meeting eligibility criteria.

2. Advice of loan approval: Being a finance broker, it is accountable to record and maintain the evidence of effectual communication done with customers, real estate, and settlement agents.
3. Document Sign-Up/Settlement Preparation: In this, there is a need to ensure that the document is properly signed pertaining to the checklist and mortgage. Along with this, information regarding insurance and settlement checklist needs to be fulfilled by the finance broker.
4. 4. Advice of Transaction Completed/Finalised: At this step, communication in relation to the successful settlement is done. Further, for finalizing the deal prominently there is a need to conduct a client satisfaction survey and thereby make necessary changes for improvement.

PART D

A

B

1. The database furnishes information about the extent to which the client is capable in relation to meeting obligations.

2. Professional relationship development is highly required for achieving success and enhancing brand image.

3. Individuals or customers with a history of credit defaults should not be contacted. 

4. Interpersonal style or skills are highly required in the context of finance brokers. Moreover, without having effectual communication skills brokers would not become able to convince or deal with customers. Further, customer's requirements in relation to the loan policies and process also differ as per demographical aspects. Thus, the broker should keep in mind all such aspects while dealing with the clients.

5. Being a finance broker, it is highly required to take follow-up from the business referrers as it helps in checking or evaluating the credentials of the concerned customer.

6. For the development of new business focus will be placed on undertaking traditional and modern promotional aspects. In other words, by placing advertisements on social sites awareness among the customers can be developed regarding the services and thereby customer base as well as sales revenue.

REFERENCES

Apply for the First Home Owner Grant. 2018. [Online]. Available through: <https://www.sro.vic.gov.au/fhogapply>.

Big Four bank home loan rate comparison. 2018. [Online]. Available through: < https://www.finder.com.au/home-loans-with-the-big-four-banks>.

Maximum LVR and Loan Amount Matrix. 2018. [Online]. Available through: <https://www.genworth.com.au/media/1116/maximum-loan-amount-matrix-australia-mlama0217-v10.pdf >.

Responsible lending. 2018. [Online]. Available through: <http://asic.gov.au/regulatory-resources/credit/responsible-lending/>.

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