1. What is the maximum loan amount the bank will lend you if your gross monthly income is $6000, you have $400 in monthly long-term obligations, and you can make a down payment of 15% of the home price given the following lender’s loan parameters?
Interest Rate: 6.5% Loan type: 30 years Housing Expense Ratio: 28% Total Debt Ratio: 41%
a. $246,808.88 b. $265,794.18 c. $279,781.82 d. $290,363.39 e. None of the above
2. Which of the following is/are decisions which a mortgage borrower must consider?
a. Fixed vs. variable rate b. How soon the loan will be paid off c. Increasing vs. level payments d. All of the above
3. How much interest will you pay during the 14th year of a $350,000 house price, 30 year, 6.5% monthly compounded, 80 LTV loan?
a. $7755.94 b. $8379.86 c. $13,968.37 d. $14,627.41 e. None of the above
4. How much principal will you pay with the 76th payment of the loan?
a. $245.11 b. $379.57 c. $1119.24 d. $1390.22 e. None of the above
5. What is the balance at the end of year 12?
a. $162,405.56 b. $184,346.44 c. $212,621.26 d. $225,003.69 e. None of the above.