DTI
Jan has $6,000 in stable gross monthly income and her total debt is $2,000. What is her debt-to-income ratio?
$2,000 / $6,000
Answer = 33% DTI
If a borrower has a stable monthly income of $3,200. What is the maximum housing expense on an FHA loan?
$3,200 x .31 (housing expense for FHA)
Answer = $992
A borrower is buying a house for $150,000 at 6.5%. He provides a down payment of $15,000. How much would he have to pay for three discount points?
$150,000 - $15,000 = $135,000
$135,000 x .03 (discount points)
Answer = $4,050
A borrower is paid $14.50 per hour and works 30 hours per week. What is their monthly gross income?
$14.50 x 30 x 52 = $22,620
$22,620 / 12
Answer = $1,885 per month
Ann will make a 20% down payment on her $85,000 purchase. Her loan amount will be
$68,000
If Ralph has $2,900 in stable gross monthly income, what is the maximum total debt allowed for Ralph by conventional lenders?
$2,900 x .36 (max 36% debt for conventional)
Answer = $1,044 total max debt
Mark has a stable monthly gross income of $2,900 and the house he wants to buy would have a monthly mortgage payment of $700. What is his housing expense?
$700 / $2,900
Answer = 24% Housing expense ratio
Bob is buying a house that was appraised at $236,000, the sales price is $228,000, and the loan amount is $216,800. to buydown his interest rate, Bob is willing to pay two points in addition to the one point in loan origination fees. what is the price of Bob's discount points?
$216,800 x .02
Answer = $4,336
Angel works at RP Funding and is paid $52,000 annually. What is his gross monthly income?
$52,000 / 12
Answer = 4,333.33 per month
Fiona has an ARM loan that has an initial interest rate of 4%. The margin on the loan is 2%. If the index is 5% in the second year, what is the interest rate charged to Fiona?
7%
A borrower w/ gross monthly income of $2567 per month applying for a loan with PITI of $567.87 and total other long-term obligations of $456 would have a monthly debt to income qualifying ration of:
$567.87+$456 / $2567 =
Answer = 39.90%
Patrick is interested in a particular house. The MLO estimates that, given the down payment and the current interest rate, the monthly mortgage payment (PITI) would be $1,000. Patrick's gross stable monthly income is $3,800. What is his housing expense ratio?
$1000 / $3800 =
Answer = 26%
Tim wants a conventional loan with no more than 6.5% interest on a $150,000 home with $15,000 down. The lender agrees to 6.5% based on two discount points and a loan origination fee of 2%. What is the total amount of points the lender will receive? (hint: dollar amount)
$150,000 - $15,000 = $135,000
$135,000 x .04 (discount points + origination fee)
Answer = $5,400
Juan is paid $1,000 bi-weekly. What is his monthly income?
$1,000 x 26 = $26,000
$26,000 / 12
Answer = $2,166.67 per month
If Bob pays $695.20 for principal and interest every month for 30 years on his $110,000 loan, how much interest will he pay over the life of the loan?
$695.20 x 12mths X 30 yrs = $250,272 Total
$250,272 minus $110,000 principal =
Answer = $140,272 (Life of the Loan Interest)
(Not DTI) What is the monthly mortgage insurance payment on an $180,000 loan using a multiplier of 0.65%?
Multiply loan amount by 0.65% ($180,000 x 0.0065 = $1,170) and divide by the 12 monthly payments ($1,170 / 12)
Answer = $97.50
A potential borrower is applying for a conventional loan to purchase a primary residence. Currently, he pays $500 in rent, $420 for an auto loan, $170 toward his VISA bill, and $300 on a student loan each month. His gross monthly income totals $4,900 and his take-home pay after taxes is $3,700. What is the maximum housing payment for which he can qualify?
$4,900 x .28 = $1,372
$4,900 x .36-890 = $874
Lower amount
Answer = $874
A buyer of a house with a sales price of $100,000 is paying a $10,000 down payment and 2 discount points on a $90,000 loan. What is the total cost of the discount points?
Discount Points = 1% of the Total Loan Amount
$900 x 2 pts =
Answer = $1,800
Mary wants to obtain FHA-insured financing on her primary home. Her expenses: $800.65 Debt: $192.65 (auto payment) and $40 (revolving credit account). Based on qualifying ratios for an FHA loan, what's her required stable monthly gross income to qualify?
Front end: $800.65 / .31 = $2,582.74
Back end: $800.65 + $192.65 + $40 = $2,403.02
Income = higher amount
Answer = $2,582.74
Joan has an ARM loan. It has an initial interest rate of 7% adjusted annually with a 2/5 interest rate cap. If interest rates go up, what is the highest interest rate Joan could pay in the second year?
9%
Sam wants to buy a home and it's estimated that an 80% conentional loan will have a mortgage payment of $878. He has an automobile payment of $212/month w/ 14 installments remaining. He earns $700/week. His down payment and closing costs are estimated at $18,400. Sam is selling a home w/ equity of $14,000. He has a checking and savings account with a local bank and plans to draw on that account to close the transaction. The VOD showed Sam's savings account has an average monthly balance of $1000 and a current balance of $3600. What is Sam's total DTI ratio?
$878 + $212 = $1090 total debt service
$1090 / $3033.33 monthy income
Answer = 36%
Sara's stable monthly gross income is $3,000. She has a monthly car payment of $200, a 401(k)loan payment of $250 with 11 months remaining, and monthly credit card payments of $125. What is the maximum mortgage PITI payment she can afford if the acceptable front and back ratios are 28%/36%?
$3,000 X 28% = $840 max PITI
$3,000 X 36% = $1,080 max debt minus $325 debt = $755
Answer = $755 (lower figure)
Penny is borrowing $274,000 to purchase a property valued at $350,000. You have quoted her a 7.5% interest rate. She is willing to pay one discount point for a 6.75% interest rate. How much additional money will she need at closing to cover the point?
$274,000 x .01
Answer = $2,740
An applicant for a mortgage loan is a salaried employee who is paid $1,350 every two weeks. In addition, she receives $500 a month in alimony. What gross monthly income can be used to qualify her?
$1,350 x 26/12 = $2,925
$2,925 + 4550
Answer = $3,425
Susan is purchasing a house for $200,000. It was appraised for $220,000. In order to avoid paying PMI on this conventional loan, how much should Susan put down on this house?
20% Down / LTV of 80% / Use LESSER of appraised value / purchase price
$200,000 x 20% = Answer = $40,000