Section 1: Case study 1 — Tim and Tina Chee

Background
Tim and Tina Chee are a young couple about to buy their first home. They have been married for
five years and during that time have rented an apartment while saving for their own home.
Following a personal referral from Thomas, Tim’s brother you have already had a first meeting with
Tim and Tina to discuss their objectives and needs. They admitted they have little time to do much
research of lenders, have limited knowledge of the loan products available and have approached
you to guide them through the process as they are confused.
During (and subsequent) to your first meeting, Tim and Tina have provided the basic information
documents — pay slips, tax returns, bank statements, property details for review/verification. You
have now undertaken your preliminary assessment and need to discuss and present to them the
proposal covering the options and your recommendations. It is important to get the proposal
moving quickly, as the agent has indicated other parties are interested in the property.
They have been looking at properties for the past three months and have found a 10 year old
established apartment that has really caught their eye, although they have some concern over the
kitchen which requires some minor renovations.
They have not paid a deposit at this stage, but the Real Estate Agent has provided some guidance on
additional fees and charges.
Following is a summary of the details of the property they wish to purchase, the couple’s financial
and employment details, and the loan features they require.

The property
Address Unit 1, 92 Seaside Lane Edgartown (Your state)

Purchase price $490,000

Description 2 bedroom, 2 bathroom Strata Title apartment

Agent details Stephanie Jones

Phone 8123 1113

Mobile 0412 880 088

The couple
Current address Unit 12, 22 Singapore Lane, Baldhills, (Your state)

Tim and Tina have lived there since March 2012

Home phone 9123 2121

Funds position
Purchase price $490,000

Clients’ estimate of costs $25,000

Total required $515,000

Loan $440,000 + LMI

Clients’ total contribution $75,000

Use fees and charges applicable to your state. If a servicing calculator you are using requires a
postcode, select one that would represent a reasonable suburb/location in your city or state.

Assets
Capital Bank savings account (joint) $78,000

Capital Bank cheque account (joint) $1600

Holden Commodore SS 2007 (Tim) $25,000

Kia Cerato Sport 2015 (Tina) $9000

Superannuation — Capital Bank (Tim) $28,000

Superannuation — Capital Bank (Tina) $62,000

Household effects (insured value) $40,000

Liabilities
Capital Bank personal loan (Tim) $5,600 (repayments $180 p.m.)

Capital Bank Visa card (Tim) $200 (limit $4,000)

Capital Bank Visa card (Tina) $1,600 (limit $5,000)

Payments have always been met on time and any prior loans repaid in terms of contracts. The
minimum monthly commitment on each of the credit cards should be calculated at 3% of the credit
limit.

Living expenses
Annual expenditure for living expenses — $33,000.
Employment and income

Tim (date of birth 21/2/87)

Position Team Leader (full time)

Employer ACE Limited 101 City Rd, (Your state)

Phone 9800 1111

Income (gross) $58,000 p.a. monthly gross income: $4,833

Employer contact Dwayne Johnson, HR Manager

Length of service Since October 2005

Driver’s licence 8855KL

Email timc@ace.com.au

Tina (date of birth 8/10/88)

Position Accountant (full time)

Employer Tech city 804 High Street, City (Your state)

Phone 9910 2033

Income (gross) $95,000 p.a. monthly gross income: $7,917

Employer contact Bruce Wayne, HR Manager

Length of service Since March 2006

Driver’s licence 17016C

Email tchee@techcity.com.au

Solicitor’s details
Coronisgroup
22 Low Street, Brisbane (Your state)
Phone: 82811382
Email: Coronisgroup.net.au
The solicitor has quoted a fee of $1,500 for the conveyance.
The loan requirements
• 30 year term
• Premium option home loan features
• Variable interest rate (for this case use 4.5% p.a.)
• LMI to be capitalised
• proposed settlement date — six weeks from exchange of contracts
• Ability to make additional payments from time to time without penalty
• Fortnightly repayment option
• Redraw facility
• Funds access via card.

Other information
• Tina has asked if there are any professional package benefits available because she is an
accountant.
• Tina previously owned and lived in an apartment with her two older sisters when they attended
university but they sold this before she married — they did not make a lot from sale.
• Family plans are five years away.
• They do have plans to take a major overseas trip before family comes along.
• Tim is hoping for a promotion within the next 12 months upon possible retirement of a long-term
employee where he works.