88) Kathy is buying her first home. She is financing a total of $185,000 at an APR of 5% for 25 years. How much are her monthly payments? A) $952.33 B) $1,081.49 C) $1,441.23 D) $1,664.85
88) Kathy is buying her first home. She is financing a total of $185,000 at an APR of 5% for 25 years. How much are her monthly payments?
A) $952.33
B) $1,081.49
C) $1,441.23
D) $1,664.85
89) Juanita has determined that the PITI on the house she would like to purchase will be $1,260 per month. What is the minimum gross salary she will need to qualify for a mortgage from a reputable lender?
A) $6,300 per month
B) $4,500 per month
C) $3,500 per month
D) $5,040 per month
90) Tran currently makes $4,500 per month in gross income. He has a student loan payment of $250 per month and a car loan of $450 per month. His credit card payments average $300 per month. What is the largest PITI he could qualify for with a reputable lender?
A) $620
B) $900
C) $1,260
D) $1,620
91) Bob and Mary Kay have gross household income of $7,000 per month. They both have great credit scores and the home they are interested in buying appraised higher than the selling price. They have combined monthly debt payments of $300 in student loans, $650 in car loans, and they pay their credit cards in full every month. The PITI on the new home will be $1,800 per month. Before they pay the $250 loan application fee, they are asking you for your opinion on whether they will get approved for a mortgage. What will you advise them?
A) Based on the 28 percent rule they can afford the $1,800 PITI and will be approved for the mortgage.
B) Based on the 28 percent rule they cannot afford the $1,800 PITI and will be denied the mortgage.
C) Based on the 36 percent rule they will be approved for the mortgage.
D) Based on the 36 percent rule they have too much other debt and will be denied the mortgage.
92) Your friends just told you that they were denied a mortgage by their bank. The loan officer told them that they did not pass the 36 percent rule. They are confused and want you to explain what happened?
A) The house you were looking at was more expensive than you can comfortably afford.
B) You need to come up with a larger down payment.
C) You pay too much in other debt payments every month.
D) All of the above could be correct.
E) None of the above could be correct.
93) You are planning on starting your own business in 18 months and you intend to purchase a new home. You have looked carefully at your budget and have determined that you can afford a PITI of $900 per month. Your banker has told you that you can easily qualify for a PITI of $1,150 per month. Which of the following is the most reasonable explanation for this discrepancy?
A) Your banker knows you really would be happier in a more expensive house.
B) Your banker is not aware of your other long-term financial goals.
C) Your banker's number is more accurate than your number.
D) None of the above is a reasonable explanation.
94) Abigail is financing her first home. She is borrowing $125,000. Her bank is loaning her the money for 15 years at an APR of 5.7%. What will Abigail's monthly mortgage payment be?
A) $958.75
B) $998.22
C) $1,001.44
D) $1,034.67
95) Which of these is not an advantage associated with an assumable loan?
A) The new buyer does not incur the closing costs of a new loan.
B) The new buyer may be able to get a lower interest rate than the current market rate.
C) It is easier for the seller to sell the home.
D) The new buyer does not have to qualify for the loan.
96) A deposit included with an offer to buy that assures the seller that the buyer is serious about buying the house is called
A) assurance deposit.
B) buyer's assurance.
C) home deposit.
D) earnest money.
E) none of the above
97) A situation in which the monthly payments are less than the interest that is due on the loan, and the unpaid interest is thus added to the principal is called
A) partial amortization.
B) negative amortization.
C) reverse amortization.
D) decaying amortization.
E) none of the above
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