Financial Planning

Case 1: Personal Budgeting and planning to buy a House:

For this case study you may use your own financial goals and information or produce a fictitious personal scenario. If you choose the latter the information must be reasonably complete and reasonable. You are required to provide the following:

Part 1. Financial Planning:

Describe your current personal and financial condition;

Provide a comprehensive list of long-term and shorter-term goals;

Assess financial resources, producing a thorough accounting and assessment of net worth, income and expenditures;

Balance cash flows for the next year;

Develop and describe implementation and control strategies.

Part 2. Debt Strategy - Mortgage Finance:

As an extension the financial plan above, provide a strategy for purchasing a house / apartment after you graduate and find work. Make any reasonable assumptions necessary to complete the assignment, but you are required to:

Identify the home you wish to buy, including location, cost and any financing issues. Include a broker or MLS description;

Explain the costs and requirements of a high-ratio mortgage (90%) versus a lower ratio (80%), focusing on the lifetime cost of the mortgage and the monthly funding requirement and debt/service implication; Identify a prospective lender and describe the expected costs, conditions and features of the proposed mortgage;

Assess your suitability for the proposed mortgage and provide the GDS, TDS and maximum mortgage calculations;

Explain your choice of fixed / variable rate mortgage; closed / open mortgage, amortization period and any other mortgage features you feel are important. What mortgage rate will you have to pay, and how have you calculated this?