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Qualifying for a Home Loan
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You work for a lender that requires a 20% down payment and uses the standard debt-to-income ratio to determine a person's eligibility for a home loan. Of the following, choose the person that you would rate the highest on their eligibility for a home loan?
b. Person B
How much annual income would you need to have if, using the 28/36 ratio, your maximum allowable recurring debt is $380?
c. $57,000
Using the 28/36 ratio, determine the maximum allowable recurring debt for someone with an annual income of $86,250.
a. $575.00
A couple is required by their lender to have a down payment of 20% of the purchase price of the home they want to buy. If the couple has saved $35,000, what is the most expensive home the couple can afford to buy?
c. $175,000
Using the standard 28/36 guidelines, if the maximum monthly mortgage payment allowed for someone applying for a home loan is $1,085, what is their annual income?
b. $46,500
Why is it important to a lending institution that a person present a 2-year job history when applying for a home loan?
d. It is important to present job history when applying for a loan because a bank or lender needs assurance of payment.
Luis wants to buy a home priced at $315,000. He plans to finance this amount less the down payment required. His mortgage payment would then be $2100. Luis has an annual income of $91,500 and $65,000 in savings. Luis has a car payment of $370, a student loan payment of $165 and a credit card payment of $45. Use a 20% down payment and the 28/36 ratio to determine if Luis is eligible for a loan. What would you advise him to do if he is not eligible?
a. Luis is eligible for a home loan; he meets all of the requirements.
Why is a larger down payment beneficial to a home investor?
c. A larger down payment would enable an investor to get a loan with a lower interest rate and lower monthly payments.
Which of the following would least likely be used to determine your eligibility for a home loan?
b. current utility bills
Which of the following ratios is used to determine ones debt-to-income ratio?
d. 28/36
Mandy has an annual salary of $37,580. Each month she has a car payment of $265 and a student loan of $120. If she applies for a home loan, how likely is it Mandy will be approved based on her debt-to-income ratio?
c. Not likely; recurring debt is higher than what is allowed.
You work for a lender that requires a 15% down payment and uses the standard debt-to-income ratio to determine a person?s eligibility for a home loan. Of the following, choose the person that you would rate the highest on their eligibility for a home loan.
c. Person C
Krista and Nick put a down payment of 20% on the purchase of their house, and then financed $200,000. What was the purchase price of the house?
d. $250,000
Which of the following would have a negative impact on determining eligibility for a home loan?
d. withdrawing money from savings
Mr. and Mrs. Yeager want to buy a home valued at $320,000. If they have 15% of this amount saved for a down payment, how much have they saved?
d. $48,000
Using the 28/36 ratio, determine the maximum allowable recurring debt for someone with a monthly income of $3,200.
a. $256
How much annual income would you need to have if, using the 28/36 ratio, your maximum allowable recurring debt is $500?
d. $75,000
Using the standard 28/36 guidelines, what is the maximum mortgage payment allowed for someone with an annual salary of $60,750?
b. $1,417.50
You work for a lending institution and are tasked with whether or not to approve a home loan. All applicants are required to have a 20% down payment, and the standard 28/36 ratio is used
The loan application is for $230,000. You see that the applicant has an annual salary of $83,000 and a savings account balance of $50,000. The applicant also has a car payment of $315, a student loan of $140 and a boat loan of $96.
How likely are you to approve the loan?
b. Somewhat likely; recurring debt is very close to what is allowed.
Using the 28/36 ratio, determine the maximum allowable recurring debt for someone with a monthly income of $4,850.
a. $388
Mr. and Mrs. Lorenzo want to buy a home valued at $213,500. If they have 18% of this amount saved for a down payment, how much have they saved?
d. $38,430.00
Which of the following would least likely have a negative impact on determining eligibility for a home loan?
d. taking a new job with higher pay
Using the standard 28/36 guidelines, what is the maximum mortgage payment allowed for someone with an annual salary of $73,025?
c. $1,703.92
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