Definitions
Define Affordability
What are the different types of expenses.
Fixed Expense
Flexible Expense
Luxury Expense
What are the different types of monthly calculations?
Hourly, Bi-weekly, and twice a month
What is the maximum house payment allowed for a household with the following terms:
2,900 Monthly gross
31/37
2,900 X 31%= 899
What is the adjusted gross income
Adjusted income is annual (gross) income reduced by deductions and used to compute all the tenant payment
What is the difference between revolving and installment account?
Installment is the set payments and revolving is accounts changing the monthly balances and minimum payments due.
What does PITI stand for?
Principal
Interest
Taxes
Insurance
Factor Table
The maximum amount you can borrow for your monthly mortgage payment for principal and interest.
What is an example of flexible expense?
What is a front-end ratio?
How much is coming out of your paycheck
True/False: the debt-to-income ratio is the front-end ratio?
What is Escrow?
The holding of documents and money by a neutral third party prior to closing; also, an account held by a lender into which a homebuyer pays money for taxes and insurance.
What do you need to know to calculate your income?
Gross income (total income before taxes) and net income (total income after taxes)
How many months to pay off the debt when trying to help with your debt-to-income ratio?
10 months or more and it’s counted toward debt-to-income
What is the gross monthly income with the following terms?
$14.50 per hour
40 work hours per week
$14.50 X 40= 580
580 X 52 weeks= $30,160
Define Ratio
Compares housing expenses and fixed debt to income. (Lenders use qualifying ratios to determine the maximum house payment (PITI) a borrower can comfortably afford.
Identify ways affordability may be improved.
Eliminate debt
Increase your income
restructure debt
What is the back-end ratio?
The insurance and the taxes
Can you name a three Native American Housing Program and Assistance?
Pre-European Contact, U.S. Housing Act of 1937, Mutual Self-Help Program, Housing and Urban and Development Act 1968, Housing and Community Development Act of 1992, Native American Housing Assistance and Self-Determining Act of 1996: Indian Housing Block Grant, Title 6 Indian Housing Loan Guarantee, American Recovery and Reinvestment Act of 2009, etc… (page 12)