Care Team Refresher Course

Care Team Refresher Course

​This course aims to gauge the CCS' understanding of the basic terminologies and theories used in Australian Mortgage.

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Please use your mobile phones to answer the questions​ displayed on the next slides. Some of the items are identification and multiple-choice questions.

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Kindly be mindful of the time as we have a specified time per each item.​

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Topics covered in this course are the following:

• LVR • Total Loan Amount​ • Offset / Direct Debit​ • Valuation Report

•​ Property Value • Interest Rates • Lodgements / Splits

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Care Team Refresher Course

​LVR stands for Loan to Value Ratio

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Lenders use the LVR to determine the risk factor of a home loan.

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A higher LVR means a higher risk for the bank as well.

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• It is the amount of money you borrow for a home loan compared to the value of the property and expressed as a percentage.

• Simply take the loan amount and divide it by the property value or PP (Purchase price).

• For a $400k property purchase with an $80k deposit, the loan amount would be $320k.

• $320K\$400K= 0.8

• 0.8x 100 = 80%

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Multiple Choice

The client is hoping to purchase a property worth $1,800,000. She plans to borrow $1,200,000 to assist her with the purchase. How much is the LVR?

• 83.33%

• 66.67%

• 55.97%

• 72.22%

Correct Answer is: 66.67%

How did we get it?

Formula: Loan Amount / Property Value x 100 = LVR

$1,200,000 / $1,800,000 x 100​ = ​66.67% (rounded up​)

LVR

Care Team Refresher Course

Multiple Choice

Michelle wants to avail of a loan amounting to $525,000. Her property is valued at $953,000. How much is her LVR?

• 55.55%

• 56.83%

• 55.09%

Correct Answer is: 55.09%

How did we get it?

Formula: Loan Amount / Property Value x 100 = LVR

$525,000 / $953,000 x 100​ = 55.09% (rounded up)

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Care Team Refresher Course

LVR

Multiple Choice

Ria found a property worth $800,000. However, the seller wishes her to pay 30% downpayment which means only 70% will be loaned from the lender. How much should Ria loan from the lender if she is after an LVR of 70%?

• $560,000

• $640,000

• 700,000

Correct Answer is: $560,000

How did we get it?

Formula: Property Value x LVR = Loan Amount

$800,000 x 70%​ or .70 = $560,000

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Care Team Refresher Course

LVR

Multiple Choice

Kat has available cash and is willing to place a 45% downpayment for the purchase of an INV property. She found a property worth $950,000. How much is her loan amount?

• $760,000

• $427,500

• $522,500

Correct Answer is: $522,500

How did we get it?

First, we compute for the LVR Percentage.

100% - 45% (downpayment) = 55% LVR Percentage​​

Formula: Property Value x LVR = Loan Amount

​ $950,000 x 55% or .55 = $522,500

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Care Team Refresher Course

LVR

Multiple Choice

The client has a Savings of $100,000 and will also receive a gift of $100,000 from his parents. How much more should he borrow to purchase a property worth $800,000. And what will be the LVR?

• $300,000 and 62.50% LVR

• $600,000 and 75% LVR

• $700,000 and 87.50%

Correct Answer is: $600,000 and 75% LVR

How did we get it?

First, we compute for the loan amount:

$800,000 (Property Value) - $100​,000 (Savings) - $100,000 (Gift) = $600,000

​Second, we compute for the LVR:

Formula: Loan Amount / Property Value x 100 = LVR

$600,000 / $800,000​ x 100 = 75%

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Care Team Refresher Course

LVR

Multiple Choice

Michelle was advised by her broker that the maximum loan amount she can avail is $950,000 based on her annual salary. How much should be the value of the property to be bought so that the LVR will not exceed 80%?

• $1,187,500

• $1,000,000

• $1,587,500

Correct Answer is: $1,187,500

How did we get it?​

Formula: Loan Amount / LVR = Property Value

$950,000 / 80% or .80 = $1,187,500

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Care Team Refresher Course

LVR

Multiple Choice

The applicant has an existing loan of $527,000. She wishes to avail another $100,000 to purchase a car. Both loans are linked to the same property that is worth $800,000. How much is the total LVR?

• 65.88%

• 78.38%

• 75.27%

Correct Answer is: 78.38%

How did we get it?​

Formula: Loan Amounts / Property Value x 100 = LVR

$527,000 + $100,000 /$800,000 x 100 = 78.38%

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Care Team Refresher Course

LVR

–If no further discretions are available outside of this matrix, no use of requesting for pricing discounts. Usually has one of the lowest rates in the market so no need to request for pricing discount.

Lenders that offer Carded Rates: ​ING, Macquarie, Pepper, and AMP Bank.

​Carded Rate

Your mortgage interest rate is what it costs you each month to finance your property. It's an amount you must pay to your lender in addition to paying off the amount that you've borrowed. Interest makes up part of your monthly mortgage payment.

​Interest Rate

Care Team Refresher Course

Multiple Choice

If the rate given is 2.50% and Bankwest has approved a discount of 1.00%. How much is the Final Rate?

• 2.50%

• 2.00%

• 1.50%

Multiple Choice

The client was given a 3.50% rate by ING. However, the client is still requesting for a .50% discount. How much will be the final rate?

• 3.50%

• 3.00%

• 2.50%

Multiple Choice

Client is applying for a loan with CBA since. Rate given was 3.00%. The client found out that the rate of ANZ is only 2.70%. How much discount should we request for CBA to match ANZ?

• .20%

• .30%

• .10%

An offset account is a transaction account linked to your home loan. You can make deposits or withdraw from it as you would with a regular transaction account.

The big difference is that when you hold money in an offset account over a period of time, you can reduce the amount of interest charged on your home loan. The higher the balance and the longer the period, the less interest you’ll pay.  And this could help you pay off your loan sooner.​

• Let’s say you take out a $400,000 home loan.

• You then deposit $10,000 into your offset account.

• You’ll now be charged interest on $390,000, instead of the full $400,000.

• This will happen for as long as the $10,000 stays in your offset account.

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​Offset Account

Care Team Refresher Course

Payment method in which a third party (which is the lender) is granted permission to take payments from a bank account.​​Multiple loan splits

​can have the same direct debit, but a loan can only have one direct debit linked.​

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​Direct Debit Account

Care Team Refresher Course

​Lodgements

Care Team Refresher Course

​This is the term for every application that will be submitted to the lender. This is categorized per security. 1 lodgement = 1 deal linked to a security/ies (ex. Purchase or Refinance + Equity Extraction)

​Splits

​This is a combination of loan types in a certain lodgement. 1 split = 1 loan account number.

​Splits are a part of a lodgement, and multiple splits means that the clients are requesting for multiple loan account numbers due to a combination of loan types (SVR / Fixed) or Repayment Type (P&I / IO)

​Valuation Report

Care Team Refresher Course

A Valuation Report is a basic inspection of a property that will determine its value. A property surveyor will look at the property’s location and condition to set the value.

​Types of Valuation

​Full/Short Valuation ​

Property will be inspected. Valuer will go into the property to check condition of property and all other aspects.​

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AVM/Modelled Estimate Valuation/Desktop  ​

More of a system valuation (based on outside factors)​

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As if complete' Valuation ​

Usually for construction loans, projected value will be presented once construction is completed.​

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COS Valuation​

System is only using the value of the Contract presented.​

Multiple Select

Please select the details found on the Valuation Report.

• Property Address

• Property Value

• Interest Rate

• Repayment Type

Multiple Select

Please select the details found on the Valuation Report.

• Income

• Zoning

• Market Value

• Rental Assessment

Multiple Select

Please select the details found on the Valuation Report.

• Loan Term

• Type of vicinity

• Risk Analysis

• Liabilities

Multiple Select

What Valuation applies for a Construction Loan?

• Short Form Valuation

• As if complete valuation

• AVM

• COS Valuation

Multiple Select

What Valuation obtains property value using outside factors only?

• Full Valuation

• Short Form Valuation

• Desktop Valuation

• COS Valuation

Multiple Select

What do we call the type of valuation wherein the security value is based on the Contract of Sale given?

• Short Form Valuation

• As if complete valuation

• AVM

• COS Valuation

Multiple Choice

Based on the Pricing Approval below, how much is the discount granted to the client?

• 2.72%

• 8.21%

• 5.49%

Multiple Choice

Based on the Pricing Approval below, how much is the final rate granted by the lender to the client?

• 4.94%

• 2.91%

• 5.09%

Poll

Are there any more questions?

• No, all good.

• Yes, I'll ask away.