FNS40821 – Certificate IV in Finance and Mortgage Broking

Case Study (No 2) Jack and Jill Rogers

Jack and Jill want to use their existing owner occupied home to assist in the security for the purchase of an
investment property.

They have found a house they are eager to make an offer on and the sale price is $640,000. Real estate agents in
the area believe they could receive a weekly rental return of between $650 and $700 on the property which is
situated in a high demand area.

They have made an appointment with you to consider their options.

Notes to the Case Study

1. Jack and Jill want to borrow for this venture

2. They do not want to use any of their own funds for this purchase
3. Their current home is valued at $720,000 (valuation provided by two local agents)
4. Current debt on the home is $285,000 (ING Bank)
5. They have one dependent child (Age 8 years)

Current Position:

Other Debts

Mastercard Limit $10,000 Balance $8,400

Store Card Limit $5,000 Balance $4,000

Personal Loan Car $12,600 Monthly Repayment $485.50

Income: Both PAYG

Jack Rogers $64,000 Warehouse Supervisor/Bunnings

Jill Rogers $72,000 Nurse/Royal Hospital

Requirement of Case Study

1. What type of loan structure would suggest, and

2. Your rationale behind this option/strategy

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FNS40821 – Certificate IV in Finance and Mortgage Broking

Case Study – Jack and Jill Rogers (Worksheet)

Either handwritten or typed answers are acceptable

Requirement of Case Study

1. An investment loan for full purchase price plus stamp duty and other expences.
If customer is happy with ING and if they would like to continue with them 1. We can do the loan as cross
collateralized and borrow the full amount of $640000 plus indicative expenses of around $32200 equaling
a total of $672200. 2. If they would like to keep the properties separated, we can try and do them as two
separate loans a, loan of $512000 on the proposed property and balance of $160200 on the existing place
of living.

2. Since customers would like to borrow full amount, utilizing existing properties’ equity is a good option.
Depending on customers comfort level we can do option 1 or two.

Additional info required from customers

1. Average monthly expenses

2. Their comfort level in meeting proposed loan repayments
3. If they are wanting to pay off the personal loan by topping up their existing home loan to reduce
interesest (need to check interst rate and exist fees of the loan) and to incrase serviceablity as the
borrowing is a bit tight based on the figures and also if they are ready to reduced limits on the credit
cards.
4. Fixed or variable?

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