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Mr and Mrs Monash have hired your team of financial planners to consult on their intention to buy their next home. In 5 years time,
Mr and Mrs Monash have hired your team of financial planners to consult on their intention to buy their next home. | ||||||||||||||||||
In | 5 | years time, they intend buy a 3 bedroom house in Caulfield to live in. They intend to spend | $1,510,000 | to buy their house. | ||||||||||||||
Task 1: | ||||||||||||||||||
Find and present in a business report, the cheapest (lowest interest rate) home loan in the market. You are required to show evidence of your comparison. No evidence of comparison will result in a -2 mark penalty. Evidence would be comparing your recommendation with at least two other loan products which also match all the conditions below. | ||||||||||||||||||
Find and present in a business report, the cheapest (lowest interest rate) home loan in the market. Mr and Mrs Monash have the following conditions and needs of the loan you present to them: | ||||||||||||||||||
(if you breach the conditions above or below, -2 marks will be deducted for each breach) | ||||||||||||||||||
The loan has to be from a | Non-big 4 Bank (domestic or foreign) | |||||||||||||||||
The loan needs to have a | Offset facility | |||||||||||||||||
Mr & Mrs Monash wish to make | fornightly repayments | |||||||||||||||||
They wish to borrow money for | 20 years | |||||||||||||||||
They wish to take a fully amortizing loan. | ||||||||||||||||||
They are interested in a | 5 year Fixed rate loan | (use comparison rates only) | ||||||||||||||||
Mr & Mrs Monash want an LVR of | 90% | (Assume any loan you research allows the LVR desired and ignore mortgage insurance) | ||||||||||||||||
a) Applying their desired LVR, Calculate the amount Mr and Mrs Monash has to borrow. | ||||||||||||||||||
b) Calculate the deposit Mr and Mrs Monash must contribute in the future. | ||||||||||||||||||
c) Apply financial math to calculate the periodic loan repayment Mr and Mrs Monash must pay. | ||||||||||||||||||
(show your formula, substitution and working, missing financial math will result in a -4 mark penalty) | ||||||||||||||||||
d) Today, Mr and Mrs Monash have | $1,200.00 | of disposable income to service their debt at each loan repayment period. | ||||||||||||||||
Assuming, their income increases by the current rate of annual inflation, will they be able to afford the periodic loan repayment needed for the loan? | ||||||||||||||||||
If not, by what nominal annual percentage will they have to grow their disposable income available to service the loan in the future when they buy their house? | ||||||||||||||||||
If their future income is greater than the loan repayment required, by what percentage is their income greater than the loan payment required? | ||||||||||||||||||
Task 2: | ||||||||||||||||||
Given the deposit Mr and Mrs Monash must pay in the future, they also task you with finding a good investment to help them save. | ||||||||||||||||||
Find and present in your business report, the best (highest interest rate) term deposit available in the market. | ||||||||||||||||||
Mr and Mrs Monash have the following conditions and needs for the term deposit you present to them: | ||||||||||||||||||
(if you breach the conditions below, -2 marks will be deducted for each breach) | ||||||||||||||||||
The term deposit is to be from a | Non-big 4 Bank (domestic or foreign) | |||||||||||||||||
The term of the deposit matures when they purchase the house in the future. | ||||||||||||||||||
They require interest to be calculated and paid | monthly | |||||||||||||||||
Mr and Mrs Monash have | $100,000 to invest today | |||||||||||||||||
a) Given what Mr. and Mrs. Monash have to invest today, apply financial math and calculate the future value of investing in your recommended term deposit today, | ||||||||||||||||||
for when Mr and Mrs Monash need to buy their house. (show your formula, substitution and working, missing financial math will result in a -4 mark penalty) | ||||||||||||||||||
b) Do Mr. and Mrs. have enough now, to pay for their deposit in the future? If yes, by what percentage are they over their deposit. | ||||||||||||||||||
If not, with the term deposit investment, will they have saved enough to pay for their deposit in the future? If not, by what percentage are they under their deposit. | ||||||||||||||||||
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