A home is appraised at $328,000 and the buyer has negotiated a purchase price of $311,000. She hopes to mortgage $303,000. What is the loan-to-value ratio to the nearest percent? Is the lender likely to approve this mortgage without the buyer being required to purchase private mortgage insurance (PMI)?

A home is appraised at $328,000 and the buyer has negotiated a purchase price of $311,000. She hopes to mortgage $303,000. What is the loan-to-value ratio to the nearest percent? Is the lender likely to approve this mortgage without the buyer being required to purchase private mortgage insurance (PMI)?

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter5: Making Automobile And Housing Decisions

Section: Chapter Questions

Problem 6FPE: Calculating required down payment on home purchase. How much would you have to put down on a house...

See similar textbooks

Similar questions

The buyers paid $6,125 for a 1 point origination fee and a 1.5 discount point fee, what is the amount of their loan? If the buyers are obtaining an 80 percent LTV, what is the purchase price of their new home?
Write an appropriate word in the blank so that the resulting statement is true. A monthly mortgage payment is used to repay the principal plus interest. In addition, lending institutions can require monthly deposits into an account, an account used by the lender to pay real estate taxes and insurance.
You are applying for a conventional mortgage from the Americana Bank. Your monthly gross income is $3,500, and the bank uses the 28% housing expense ratio guideline. a. What is the highest PITI you can qualify for? Hint: Solve the housing expense ratio formula for PITI. (Remember, this is an application of the percentage formula, Portion = Rate x Base, where PITI is the portion, the expense ratio is the rate, and your monthly gross income is the base.) b. Based on your answer from part a, if you are applying for a 30-year, 9% mortgage, and the taxes and insurance portion of PITI is $175 per month, use Table 14-1 to calculate what size mortgage you qualify for. Hint: Subtract TI from PITI. Divide the PI by the appropriate table factor to determine how many $1,000s you qualify to borrow. c. Based on your answer from part b, if you are planning on a 20% down payment, what is the most expensive house you can afford? Hint: Use the percentage formula again. The purchase price of the house is…
A customer has a first mortgage of $100,000 at 5.5% and a second mortgage of $50,000 at 7.8%. What is the average rate of mortgage that the customer pays?
Suppose you earn a gross income of $2,710.00 per month and apply for a mortgage with a monthly PITI of $501.35. You have other financial obligations totaling $428.18 per month. If the lending ratio guidelines are as given in the table below, what type of mortgage, if any, would you qualify for? Mortgage Type Housing Expense Ratio Total Obligations Ratio FHA 29% 41% Conventional 28% 36% O FHA only O Conventional only O FHA and Conventional O None of the above
using the maximum ratios for a conventional mortgage, how big a monthly payment could one afford if theor gross income is $4,000? Would it make a difference if he already had a car payment of $750?
(c) Use the graph to estimate the amount of the mortgage.
Your friend is currently paying $734 in rent monthly in Fort Wayne and would rather apply the payment toward purchasing a home. If she can get a 30 year mortgage at 4.67% APR using her current payment amount, how much could she borrow? What could you type into Excel to calculate this value?
Suppose you earn a gross income of $2,920.00 per month and apply for a mortgage with a monthly PITI of $908.12. You have other financial obligations totaling $169.36 per month. If the lending ratio guidelines are as given in the table below, what type of mortgage, if any, would you qualify for? Mortgage Type Housing Expense Ratio Total Obligations Ratio FHA 29% 41% Conventional 28% 36% A. FHA only B. Conventional only C. FHA and Conventional D. None of the above
A mortgage applicant who has a monthly gross income of $4,705.00 applies for a mortgage with monthly PITI of $1,411.50. The applicant's other financial obligations total $282.30 per month. If the lending ratio guidelines are as given in the table below, what type of mortgage, if any, would the applicant qualify for? Mortgage Type Housing Expense Ratio Total Obligations Ratio FHA 29% 41% Conventional 28% 36% O FHA only O Conventional only O FHA and Conventional O None of the above
A homeowner is looking to buy a home in Marvin Gardens. The most he can afford to pay in total is $3,080 per month. Yearly property taxes will be about $12,000 (escrowed monthly) and insurance is $187 per month. There are no other costs. If mortgage rates are 5.48% for a 30-year fixed-rate mortgage, how large can his mortgage be? (Do not round intermediate calculations. Round your answer to the nearest whole number.)
Jamison is looking at the historical prepayment for a passthrough security. He finds the following: mortgage balance in month 42 = $260,000,000 scheduled principal payment in month 42 = $1,000,000 prepayment in month 42 = $2,450,000 What is the SMM for month 42? How should Mr. Jamison interpret the SMM computed? What is the CPR for month 42?