Homework Help is Here – Start Your Trial Now!
Business
Management
Olivia, a mortgage broker, has a client, Grayson, who meets all of the requirements for approval by Olivia's private lender. Joe. Joe has had issues with borrowers missing payments in the past, and has decided to charge NSF fees of $300, a condition that is much higher than normal. However Joe also offers lower rates than Olivia's other investors. Since Grayson has very good credit and debt servicing ratios, would this be a good option for Grayson?

Olivia, a mortgage broker, has a client, Grayson, who meets all of the requirements for approval by Olivia's private lender. Joe. Joe has had issues with borrowers missing payments in the past, and has decided to charge NSF fees of $300, a condition that is much higher than normal. However Joe also offers lower rates than Olivia's other investors. Since Grayson has very good credit and debt servicing ratios, would this be a good option for Grayson?

Understanding Business
Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
See similar textbooks
icon
Related questions
Question

Pls help ASAP for both

Olivia, a mortgage broker, has a client, Grayson, who meets all of the requirements for approval by Olivia's private lender. Joe. Joe has had issues with borrowers missing payments in the past, and has decided to charge NSF fees of $300, a condition that is much higher than normal. However Joe also offers lower rates than Olivia's other investors. Since Grayson has very good credit and debt servicing ratios, would this be a good option for Grayson? Select one: a. Yes, the lower rate offered by Joe will offset the higher NSF fee b. Yes, the lower rate combined with low risk of missed payments makes this a good option for Grayson c. No, the NSF fee is much too high and is therefore not reasonable for Grayson d. No, Grayson is at risk of missing payments and therefore this is not advisable
Transcribed Image Text:Olivia, a mortgage broker, has a client, Grayson, who meets all of the requirements for approval by Olivia's private lender. Joe. Joe has had issues with borrowers missing payments in the past, and has decided to charge NSF fees of $300, a condition that is much higher than normal. However Joe also offers lower rates than Olivia's other investors. Since Grayson has very good credit and debt servicing ratios, would this be a good option for Grayson? Select one: a. Yes, the lower rate offered by Joe will offset the higher NSF fee b. Yes, the lower rate combined with low risk of missed payments makes this a good option for Grayson c. No, the NSF fee is much too high and is therefore not reasonable for Grayson d. No, Grayson is at risk of missing payments and therefore this is not advisable
Elona, a mortgage broker, has a client, Emma, who wishes to pay off some debts and back taxes to the CRA, which is threatening her with immediate collections. Emma, who has a first mortgage with CIBC that will come up for renewal in nine months, has great credit, lots of income and forty percent equity in her home. She wants to increase her first mortgage with CIBC to consolidate her debts and pay off the CRA, but CIBC told her that as long as she had outstanding back taxes, they would not increase her mortgage. Elona has a solution. Elona's private lender. Laszlo, is looking for a mortgage in which to invest. Laszlo is fine getting repaid up to 25% of his investment during the term but is insistent that any mortgage he does is for a one year term with a prepayment penalty of 3 months. Out of the following options which one meets the needs of both Emma and Laszlo? Select one: a. Pay off CRA and consolidate her debts using Laszlo's mortgage, then pay off Laszlo's mortgage by refinancing the CIBC mortgage at renewal b. Pay off CRA using Laszlo's mortgage with a postponement clause, then refinance with CIBC to consolidate her debts, borrowing enough to pay off Laszlo at the end of his term c. Laszlo's mortgage won't help Emma; Emma should wait until the CIBC mortgage comes up for renewal in nine months d. Pay off CRA using Laszlo's mortgage with a postponement clause, then refinance with CIBC to consolidate her debts
Transcribed Image Text:Elona, a mortgage broker, has a client, Emma, who wishes to pay off some debts and back taxes to the CRA, which is threatening her with immediate collections. Emma, who has a first mortgage with CIBC that will come up for renewal in nine months, has great credit, lots of income and forty percent equity in her home. She wants to increase her first mortgage with CIBC to consolidate her debts and pay off the CRA, but CIBC told her that as long as she had outstanding back taxes, they would not increase her mortgage. Elona has a solution. Elona's private lender. Laszlo, is looking for a mortgage in which to invest. Laszlo is fine getting repaid up to 25% of his investment during the term but is insistent that any mortgage he does is for a one year term with a prepayment penalty of 3 months. Out of the following options which one meets the needs of both Emma and Laszlo? Select one: a. Pay off CRA and consolidate her debts using Laszlo's mortgage, then pay off Laszlo's mortgage by refinancing the CIBC mortgage at renewal b. Pay off CRA using Laszlo's mortgage with a postponement clause, then refinance with CIBC to consolidate her debts, borrowing enough to pay off Laszlo at the end of his term c. Laszlo's mortgage won't help Emma; Emma should wait until the CIBC mortgage comes up for renewal in nine months d. Pay off CRA using Laszlo's mortgage with a postponement clause, then refinance with CIBC to consolidate her debts
Expert Solution
steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
Understanding Business
Understanding Business
Management
ISBN:
9781259929434
Author:
William Nickels
Publisher:
McGraw-Hill Education
Management (14th Edition)
Management (14th Edition)
Management
ISBN:
9780134527604
Author:
Stephen P. Robbins, Mary A. Coulter
Publisher:
PEARSON
Spreadsheet Modeling & Decision Analysis: A Pract…
Spreadsheet Modeling & Decision Analysis: A Pract…
Management
ISBN:
9781305947412
Author:
Cliff Ragsdale
Publisher:
Cengage Learning
Management Information Systems: Managing The Digi…
Management Information Systems: Managing The Digi…
Management
ISBN:
9780135191798
Author:
Kenneth C. Laudon, Jane P. Laudon
Publisher:
PEARSON
Business Essentials (12th Edition) (What's New in…
Business Essentials (12th Edition) (What's New in…
Management
ISBN:
9780134728391
Author:
Ronald J. Ebert, Ricky W. Griffin
Publisher:
PEARSON
Fundamentals of Management (10th Edition)
Fundamentals of Management (10th Edition)
Management
ISBN:
9780134237473
Author:
Stephen P. Robbins, Mary A. Coulter, David A. De Cenzo
Publisher:
PEARSON
SEE MORE TEXTBOOKS