Mr Ernest Mwai an executive and a valuable customer of your bank has between promoted to a new branch. The new branch is at a new location and he wishes to move houses immediately. His present income is Kshs.3.6m per year. He has an outstanding mortgage Kshs.1.350m he has so far identified a house near his new office which is being offered at Kshs.2.7m and a mortgage co’ has agreed to a new mortgage of Kshs1.8m. The completion of his purchase for 3month contracts were exchanged after Mwai made a 10% deposit from his own resources. His present house has been on the market for a short time and no firm offers have a short time and no firm offers have been received. He assures you that similar rises are being sold about same price of Kshs.2.7m and he does not envisage any undue delays in the sale.Other charges applicable to translation are
Lawyer fee Kshs 99,000
Estate agent Kshs.63, 000
Stamp duty 4%
Bank charges interest 20% per year
Mr. Mwai asks for assistance to finance the transactions.
a) Explain the type of bringing facility required. (2 marks b) Appraise request. (1 marks)c) Assuming the bank agrees to assist outline the measures it will take to protect its position.