Tutorial Qs.doc

Bill has not met his previous arrangement with the

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Bill has not met his previous arrangement with the bank to keep his account in credit Bill and his wife have run up debts on various cards over the past two years, totaling $30,000 DECISION: APPROVE the Loan Subject to Conditions A budget is to be completed by the client in conjunction with their accountant or financial planner to change their spending behaviours A valuation is to be requested by the Bank confirming the value of the property The valuation is to be completed by a professional valuer appointed by the Bank Life and Income Protection Insurance is to be taken out over Bill Ramsey the prime income earner An Asset and Liability statement is to be requested from the applicants to confirm their net worth A 1 st mortgage over the property will remain the security provided Confirmation is to be provided by Mr. Ramsey’s employer of the pending 20% increase in salary A direct debit for the repayments is to be provided on the account Bill Ramsey receives his salary payments The customer is to be reviewed in 6 months time to confirm a change in spending behaviour A letter of undertaking from the client that they will not request any further borrowings from other Banks An increase in the home loan is to be provided in lieu of a line of credit which requires a repayment schedule CASE 2
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John Fraser has banked with you for three years and has maintained a generally satisfactory account. His balances have never been large and regular lines of credit have been seen, but always within the internal limit you have allocated to his account. John calls to see you. He is a foreman at a local engineering company. He has been offered another job in a nearby town at an increased salary of $91,000 per annum. His wife currently works part-time in a supermarket earning $700 per week. The journey to the new job would be difficult from his present house and he wishes to move. His present house has been valued by a local estate agent at $465,000 and he has an existing mortgage with you of $295,000. Mr. and Mrs. Fraser have seen a house they want to buy. The asking price is $475,000 and they are asking for a new loan/mortgage of $350,000. John would like to move in as quickly as possible. Some general lending rules applicable to personal case studies are to include: 1) Lending on residential property is to be to a maximum of 80% 2) A property being purchased must allow for 5% purchase costs which is predominantly government stamp duty 3) If the case study includes the sale of a property you are to allow for 2% selling costs to the real estate agent.
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CASE 2 – Response FACTS: John Fraser, a foreman, married, has banked with you for 3 years, maintaining satisfactory accounts and regular lines of credit Offered a new job, with a salary of $91,000 per annum, wishes to move John’s wife works part-time, earning $700 per week Present House Value: $465,000 Existing Mortgage: $295,000 New House Asking Price: $475,000 Loan/Mortgage: $350,000 ISSUES & CONCERNS: Open-Ended Bridging Loan Application, client (John) wishes to buy a new
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  • Fall '19
  • Debt, Bill Ramsey

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