Diploma of Finance and Mortgage Broking Management (FNS50322) flashcards
Diploma of Finance and Mortgage Broking Management (FNS50322) · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Comparison rate
- A single percentage figure that combines the interest rate with most upfront and ongoing fees, allowing like-for-like comparison of loan cost over a standard term.
- Serviceability buffer
- The margin added to the actual product interest rate when assessing whether a borrower can repay, commonly three percentage points or the lender's floor rate.
- Genuine savings
- Funds accumulated over time from the borrower's own resources, evidenced by statements, rather than a lump sum gifted or borrowed shortly before application.
- Offset account
- A transaction account linked to a loan whose balance reduces the interest calculated on the loan, while remaining separately accessible to the borrower.
- Redraw facility
- Access to extra repayments already made on a loan, provided at the lender's discretion and subject to the loan contract terms.
- Cross-collateralisation
- A structure where one loan is secured by two or more properties, so releasing one property requires the remaining security to satisfy lender limits.
- Fixed-rate break cost
- An economic cost charged when a fixed-rate loan is repaid early and wholesale rates have fallen, calculated using a lender-specific formula.
- Limited guarantee
- A guarantee capped at a stated amount or limited to a specific property, reducing the guarantor's exposure compared with an unlimited guarantee.
- Lenders Mortgage Insurance
- Insurance protecting the lender against loss where the loan-to-value ratio exceeds the lender's threshold, usually above eighty per cent.
- Default listing
- A credit reporting entry for a payment overdue by more than sixty days, generally remaining on the borrower's credit file for five years.
- Credit file correction
- A written request to a credit reporting body to amend inaccurate information, to which the body must respond within thirty days.
- Best interests duty
- The statutory obligation on mortgage brokers to act in the client's best interests and to record why the recommended loan meets the client's objectives.
- Responsible lending inquiry
- The obligation to make reasonable inquiries into the client's requirements, objectives, and financial situation before suggesting or assisting with a credit contract.
- Hardship notice
- A notice from a borrower unable to meet repayments, which the credit provider must respond to within twenty-one days and may answer with a varied contract.
- Comparison rate warning
- The required statement that the comparison rate applies only to the example given and may not include all fees or reflect the client's actual loan.
- Breach reporting
- Notification to the regulator of a significant breach or likely breach within thirty days of the licensee becoming aware, with remediation details.
- Conflict of interest
- A situation where a personal, financial, or organisational interest could improperly influence professional judgement, requiring avoidance, disclosure, or controls.
- Ethical decision framework
- A structured process of identifying facts, stakeholders, rules, options, and consequences before deciding and recording the reasoning.
- Gifts and benefits register
- A record of hospitality or benefits received, showing value, source, date, and approval, measured against the licensee's disclosure threshold.
- Risk register
- A document listing each identified risk with its cause, consequence, likelihood, impact, rating, owner, controls, and review date.
- Residual risk
- The level of risk remaining after existing controls are applied, compared against the licensee's risk appetite to decide further treatment.
- Risk treatment options
- The four standard responses to identified risk: avoid the activity, reduce the likelihood or impact, transfer it such as through insurance, or accept it.
- Referral arrangement
- A documented agreement covering scope, consent, fees, confidentiality, and complaint handling before client information is shared with another party.
- Referral conversion rate
- The number of settled loans divided by the number of referrals received over a period, used to measure the quality of a referral relationship.
- Fact find
- A structured record of the client's objectives, financial position, existing arrangements, risk tolerance, time horizon, and special circumstances.
- Funds to complete
- The total cash required at settlement, being the purchase price plus government charges and fees, less the loan amount and verified savings.
- Rental income shading
- The practice of assessing only a proportion of gross rental income, commonly eighty per cent, when calculating the borrower's servicing capacity.
- Contemporaneous file note
- A dated, factual record made at or near the time of a client conversation, distinguishing observed facts from the broker's opinions.
- Internal dispute resolution
- The licensee's documented complaint process, with acknowledgement and resolution timeframes, before the client may escalate to external dispute resolution.
- Continuing professional development
- Ongoing training recorded with date, provider, activity, and hours to maintain competence and satisfy licensee and regulatory requirements.
- Elective packaging rule
- The requirement that a qualification include the specified number of elective units, chosen from the listed electives for that training package version.
- Recognition of prior learning
- An assessment process granting credit for a unit where evidence from prior work or study is mapped to the unit's performance criteria and knowledge evidence.