Task 24 ― Preparing a loan proposal

After completing your investigation into what loan options are available, you are ready to proceed and prepare a loan proposal for the clients Ravi and Alice. 

During discussions with the clients, they have confirmed their willingness to cross-collateralise their owner-occupied property as equity to purchase the investment property. So, you have agreed to send them an email and propose two options to finance the investment property. 

Firstly, you are required to complete the credit proposal disclosure to attach to your email presentation.

Credit proposal disclosure

This document provides information on commissions and certain fees and charges the broker or other parties may receive in relation to the proposed loan or lease.

Task 24: Question 1

You now need to complete a credit proposal. For this task you will need to use an online loan comparison website and to complete the template below.

Lender information: The lender is paying an upfront commission of 0.65% of the loan amount and a monthly trail based on 0.15% of the loan balance.

Task 24: Question 2

Now that you’ve completed the credit proposal disclosure, you will need to write your email to the client. You must cover the following points, namely:

• a summary of your understanding of the clients’ needs (this could be an outline summary of their proposed loan structure)

• a brief summary of their current financial position (use information from the case study)

• your explanation of the minimum of two (2) product options evaluated that meet their needs and details of the loan features (use the internet or, if working in the industry, internal software)

• the option you recommend and the reasons for the recommendation — including the loan amount, term and repayments; explain how the recommended product meets the clients’ needs (refer to the case study); and explain why you recommend this lender.

• invite questions from the client and respond in a follow-up email accordingly

• provide a section for the client to provide you with permission to proceed.

Task 24: Question 3

Ravi has responded to your email asking some questions. 

To: Broker 1

Broker1@CCF&MB.com.au

From: [email protected]

Re: Recommendation

Dear broker,

Thank you for providing your recommendation for the home loan product for our refinance application. I have some questions I am hoping you can answer for us:

1. Can you please explain our rights for obtaining a written assessment.

2. Do you have to provide us with a comparison rate with your home loan product recommendations, and can you please explain the difference between the interest rate and the comparison rate?

3. We would like to negotiate the application fee or the interest rate for the product you’ve recommended. 

Can you please advise how much you can negotiate for either the interest rate or the application fee on our behalf?

Thank you and regards,

Ravi Patel

Send a reply email to Ravi to respond to those questions.

FWD: To: Ravi Patel

[email protected]

From: broker1@CCF&MB.com.au

Re: Recommendation