Discovery Home Loan Quiz and Flashcards: Master the Fundamentals

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Questions and Answers

What is the percentage discount offered by the Home Partner Network for Transaction Bundled Standard discount on a Home Loan?

Up to 12.5%

Up to 30% (correct)

Up to 25%

Up to 15%

For what type of Discovery Bank clients is there a flat rate of 3% on purchases in the Home Partner Network?

Home Loan clients

Vitality Money status clients

Transaction PAYT clients (correct)

Credit Card clients

How much is the monthly spend cap for earning Discovery Miles on purchases within the Home Partner Network?

R10,000

R15,000 (correct)

R5,000

R20,000

What type of discount is available to clients using a virtual card in the Home Partner Network?

Up to 12.5% Signup and view all the answers

Which factor determines the rewards earned based on purchases in the Home Partner Network?

Annual average qualifying card spend Signup and view all the answers

What determines the discount level for Home Loan double discount in the Home Partner Network?

Vitality Money status Signup and view all the answers

Where can clients earn Discovery Miles within the Home Partner Network?

On all purchases up to R15,000 per partner Signup and view all the answers

What does CIA SPE FER F O TIL UN '24 T OC stand for?

Home Loan Application Process Signup and view all the answers

What does PAYT stand for in Transaction PAYT?

Pay As You Transact Signup and view all the answers

What determines the referral fee percentage for the Home Loan Protector?

Loan term of the home loan Signup and view all the answers

When is the Home Loan Protector referral fee paid to the referring party?

As a once-off lump sum on policy activation Signup and view all the answers

To earn referral fees on Home Loan Protector, what action must the client take during the application process in the Discovery Bank app?

Select the 'HLP uptake' box Signup and view all the answers

What happens if the Home Loan Protector lapses within the first 24 months according to the text?

Clawbacks will occur on a pro-rata basis Signup and view all the answers

What is a requirement to earn referral fees on Home Loan Protector sales?

Selecting the HLP uptake box during application process Signup and view all the answers

How is the referral fee percentage calculated for the Home Loan Protector?

$3.25 x monthly premium x 11.4 x (policy term in years; 26.15) Signup and view all the answers

What is required to receive the referral fee for a Home Loan Protector policy?

'HLP activation' within 72 hours of policy issuance Signup and view all the answers

What is not a condition to be met for earning referral fees on Home Loan Protector according to the text?

'Home Loan Protector' service record establishment Signup and view all the answers

What does a lapse in the Home Loan Protector policy within the first 24 months trigger?

'Clawbacks' on a pro-rata basis Signup and view all the answers

'How are referral fees paid for Home Loan Protector policies?' according to the text.

''Once-off lump sum upon policy activation' Signup and view all the answers

What effect do adhoc lumpsum contributions have on the future monthly repayments of a home loan?

Decrease the future monthly repayments Signup and view all the answers

How does Calvin's R100,000 contribution in year 2 affect his monthly repayments?

Reduces his monthly repayments Signup and view all the answers

What is the purpose of the conveyancing, lodgement, and registration process in the home loan life cycle?

To transfer ownership Signup and view all the answers

How does an additional R250,000 contribution in year 5 impact Calvin's monthly repayment?

Reduces his monthly repayment Signup and view all the answers

What is the process of applying and choosing in the home loan life cycle typically related to?

Offer to purchase Signup and view all the answers

What is the key function of assessment and valuation in the context of a home loan?

Assessing the property's value Signup and view all the answers

Which action signifies ownership transfer in the context of a home loan?

'Giving notice to cancel' Signup and view all the answers

What does termination relate to in a home loan life cycle?

'Repayment and termination' Signup and view all the answers

When does Calvin take a R1.5 million loan over 20 years at 10.75%?

'2023' Signup and view all the answers

Study Notes

Discovery Bank Home Loan Fundamentals

The Discovery Bank Home Loan offers clients the ability to take ownership, repay the loan, and access additional credit over time, eventually settling or terminating the loan.

Home Loan Statistics

Total limits: R400 million (unsecured), R14 billion (secured)
Average limit: R63,000 (unsecured), R47,000 (secured)
Average transaction value: R1.7 million (average loan limit size), R1.3 million (average balances)

Mispricing of Current Home Loans

60% of clients are currently overpriced on their existing home loans
Average pay off period: 8 years or more
Typical mispriced client profile: average client age at origination 35.8 years, current age 40.5 years, with an average loan limit size of R1.7 million

Opportunities for Existing Discovery Bank Clients

Existing clients hold over R270 billion in home loan balances with other providers, offering significant opportunities for Discovery Bank
Average balance: R1 million each, with a potential opportunity of R10 billion

Home Loan Life Cycle

Unpacking the home loan life cycle: offer to purchase, applying and choosing, assessment, valuation and letter of acceptance, conveyancing, lodgement and registration, ownership, further lending, repayment, and termination
Repayments: basic monthly instalment amount, calculated monthly based on interest rate, outstanding balance, and remaining term
Repayments can be reduced by making adhoc lump sum contributions, which reduce the future monthly repayments of the home loan over its lifetime

Home Loan Protector

Covers clients for death and a tailored set of objective medical criteria for illness and disability
Decreasing term assurance, with a sum assured that decreases at each anniversary, and a level premium throughout the term of the policy
Value proposition: up to 0.25% reduction on the interest rate, and up to 0.5% reduction including Discovery Insure's reduction

Referral Fees on Home Loan Protector

Referral fee: up to 15% of the first year's premiums, once-off, based on the loan term and home loan value
Clawbacks: occur on a pro-rata basis if the Home Loan Protector lapses within the first 24 months of ongoing monthly premiums

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Description

Test your knowledge on the fundamentals of Discovery Bank Home Loan, including applying for the loan, accessing additional credit, settlement process, insurance options, and sales requirements. Explore case studies and opportunities involved in expanding Discovery Bank lending suite.

Discovery Bank Home Loan Fundamentals Quiz

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