Question: please answer all parts using excel and sho the formulas thank you so much Ann wants a mortgage to buy a house. Ann gives the
please answer all parts using excel and sho the formulas thank you so much
Ann wants a mortgage to buy a house. Ann gives the following information to the bank:
Income: $240k/year or 20k/month
Average monthly debt: $4k
Estimated monthly Taxes + Insurance: $1,200
Down-payment: $100k saved
-Anns down-payment will be $100k, she will take out a mortgage for the remainder
Ann qualifies for a 30 year FA-CPM-FRM (monthly payments & monthly compounding) with:
Annual interest rate: 7%
Income test: (28%/36%)
Collateral test: LTV
80% -B0
19*DP0
Closing costs + buy-down points: $5,000 + 1.75% of the balance at origination.
-Example: if Ann gets a $100k mortgage, she will pay $5k + $1.75k=$6.75k at origination.
1 Underwriting [ FE = Front End, BE = Back End, DTI = Debt to Income]
1.1: Fill in the spreadsheet (sheet Underwriting) for Ann.
1.2: based on the FE DTI what is the biggest payment Ann can make?
1.3: based on the BE DTI what is the biggest payment Ann can make?
1.4: based on both the FE & BE DTI what is the biggest payment Ann can make?
1.5: based on both the FE & BE DTI what is the biggest loan Ann can get?
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
