the 1003 Information will help you answer 1004 projects questions assignment

1004 Project Questions

Questions and Calculations

1. What is the 30 year fixed "purchase money" market Interest rate at your bank?
2. What is the "APR" for #1? (you do not have to calculate this, it should be available from your bank.)
3. Have the Buyaars been on their jobs long enough?

If the maximum Front- end and Back-End Debt-to-Income ratios are 33%/38%:

1. Do Buyaars make enough income to qualify for the loan?
2. Do they have too much other debt?
3. What are the actual Front-End and Back-End debt-to-income ratios for the Buyaars?

1. Do they have enough cash reserve for down payment and closing costs?
2. Will the Buyaars be required to pay Private Mortgage Insurance? If no, why not?
3. What is the conforming loan amount for this property and have the Buyaars exceeded it?
4. See loan limits at: https://www.fanniemae.com/content/tool/loan-limit-table.xls
5. Go to the bottom of the Excel Worksheet and click on "2019 Loan Limit by County" tab, then scroll down until you find Los Angeles County.
6. How much interest will be paid over the life of the loan? (use: usmortgagecalculator.org)
7. What year is the balance of the loan at approx. $200,000? (use: usmortgagecalculator.org)
8. Do the Buyaars have too many children for this loan?
9. Approximately how old are the Buyers and have they exceeded the age limit for this loan?

Extra Point Question (10 points)

1. What is the maximum price home the Buyers could purchase without exceeding either of the debt-to-income ratios? *

*Assumptions:

1. Maximum debt-to-income ratios - 33%/38%
2. Property Taxes are 1.1% of Purchase Price
3. Hazard Insurance price won't change
4. Must have 20% down payment

Purchase Terms

Address: 4862 Oliva Ave., Lakewood, CA

Purchase Price: $550,000

Initial Deposit: $10,000

Down payment: 20%

30 year fully amortized loan

4.75% interest rate

1003 Information

Section I: Type of Mortgage and Terms of Loan

Mortgage Applied for: Conventional

Amount: calculate @ 80% of purchase price

Interest Rate: 4.75%

No. of Months: 30 year fixed fully amortized

Section II: Property Information and Purpose of Loan

Subject Property: 4862 Oliva Ave., Lakewood, CA 90712

No. of Units: 1

Legal Description: APN 7154024001

Year Built: 1952

Purpose of Loan: Purchase

Title will be Held: and Maria A. Buyaar and Juan Q. Buyaar

Manner Title to be Held: to be determined

Estate Held in: Fee Simple

Section III: Borrower Information

Borrower Co-Borrower

Borrower: Maria A. Buyaar Co-Borrower: Juan Q. Buyaar

Social Security: 123-45-6789 Social Security: 123-45-6780

Home Phone: 888-888-8888 Home Phone: 888-888-8888

DOB: 03/01/1962 DOB: 07/01/1963

Years of School: 16 Year of School: 16

Marital Status: Married Marital Status: Married

Dependents: 2, Ages 14, 16 Dependents: 2, Ages 14, 16

Present Address: 1234 Market St. Present Address: 1234 Market St.

San Diego, CA 92111 San Diego, CA 92111

Own or Rent: Rent, 4 years Own or Rent: Rent, 4 years

Section IV: Employment Information

Borrower Co-Borrower

Employer: Rodeo Electronics Employer: Financial Corporation

Address: 1234 Ocean St. Address: 7777 Ryan St.

San Diego, CA 92111 San Diego, CA 92111

Years on Job: 16 Years on Job: 1 1/2

Years in this line of work: 16 Years in this line of work: 12

Position: Programmer Position: Vice President

Wages (mo.): $4600 Wages (mo.) $4100

Business Phone: 999-999-9999 Business Phone: 444-444-4444

Employer: The Money Store

Address: 3221 Green St.

San Diego, CA 92110

Years: 6

Position: District Manager Wages (mo.): $3700

Business Phone: 444 - 111-2222

Section V: Monthly Income & Housing Expenses

Base Employment Income: Borrower - $4,600.00 Co-Borrower - $4,100.00

Rent: Present - $1,935.00

First Mortgage: Proposed - calculate (use: usmortgagecalculator.org)

Hazard Insurance: Proposed - $800/yr.

Real Estate Taxes: Proposed - calculate (1.1% of Purchase Price)

Section VI: Assets and Liabilities

Assets

Cash Deposit (earnest money): $10,000

Wells Fargo Bank: $4,500 (acct. 1234)

Chase Bank: $22,000 (acct. 5678)

Fidelity Investment: $120,000 (Mutual Funds)

Vested Retirement Fund: $250,000

Automobiles: $18,000 (Brand X), $15,000 (Brand Y)

Liabilities

Auto Loan: $280.00/5 (acct. 12345) Bal: $1470

Credit Card 1: $160.00/R (acct. 11111) Bal: $6750

Credit Card 2: $90.00/R (acct. 22222) Bal: $2900

Credit Card 3: $75.00/R (acct. 33333) Bal: $2200

Section VII: Details of Transaction

Purchase Price: $550,000

Estimated Pre-paids: $1729.31

Estimated Closing Costs: $12,026

Total Costs (i): ????? (calculate)

Other Credits: $10,000 (initial deposit - earnest money)

Loan Amount (m): see Section I

Loan Amount (o): ???? (calculate)

Cash from Borrower: ???? (calculate)