Contemporary Mathematics for Business & Consumers
8th Edition
ISBN: 9781305585447
Author: Robert Brechner, Geroge Bergeman
Publisher: Cengage Learning
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Textbook Question
Chapter 14.II, Problem 15RE
Use Exhibit 14-4, Lending Ratio Guidelines, on page 468 to answer the following questions:
a. Which of the applicants in Exercises 8-14 would not qualify for a conventional mortgage?
b. Which of the applicants in Exercises 8-14 would not qualify for any mortgage?
The mortgage business uses widely accepted guidelines for these ratios that should not be exceeded. The ratio guidelines are shown in Exhibit 14-4.
Mortgage Type | Housing Expense Ratio | Total Obligations Ratio |
FHAConventional |
|
|
The mortgage business uses widely accepted guidelines for these ratios that should not be exceeded. The ratio guidelines are shown in Exhibit 14-4.
Applicant | MonthlyGrossIncome | Monthly PITI Expense | Other Monthly Financial Obligations | Housing Expense Ratio (%) | Total Obligations Ratio (%) | |
8. | Parker | $2,000 | $455 | $380 | 22.75 | 41.75 |
9. | Forman | $3,700 | $530 | $360 | ||
10. | Martin | $3,100 | $705 | $720 | ||
11. | Tajsich | $5,200 | $1,300 | $510 | ||
12. | Emerson | $2,900 | $644 | $290 | ||
13. | Jameson | $4,250 | $1,150 | $475 | ||
14. | Renquest | $6,725 | $1,648 | $580 |
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Carlos earns a gross income of $5,690 per month and applies for a mortgage with a monthly PITI of $1,365.60. Carlos has other financial obligations totaling $779.53 per month.
If the lending ratio guidelines are as given in the table below.
Lending Ratio Guidelines
Mortgage Type
Housing Expense Ratio
Total Obligations Ratio
FHA
29%
41%
Conventional
28%
36%
What type of mortgage, if any, would Carlos qualify for?
Carlos qualifies for an FHA mortgage under the lending guidelines, but not a conventional mortgage.
Carlos qualifies for a conventional mortgage under the lending guidelines, but not an FHA mortgage.
Carlos qualifies for both an FHA mortgage and a conventional mortgage under the lending guidelines.
Carlos qualifies for neither an FHA mortgage and a conventional mortgage under the lending guidelines.
The previous month's balance on Barry Montego's credit card was
$872.54. He paid $600.00 on his account and used the card to buy
$350.00 worth of purchases. The finance charge for the month
was $15.35. His credit card company calculates the minimum
payment based on 5% of the current balance rounded to the
nearest $5. What is the minimum payment for Barry's bill?
Select one:
a. $50.00
O b. $25.00
O c. $20.00
O d. $30.00
1.
Project Eastcoast Sdn. Bhd. is planning to buy an insurance plan to minimise the risk
of losses. The insurance options are as below:
Plan
North
i.
South
ii.
West
Project Eastcost Sdn. Bhd. historical losses incurred as below:
Insurance Policy
An insurance policy that provides RM5,000 of straight deductible
attached to it with an annual policy limit of RM22,000.
An insurance policy that provides RM22,000 of aggregate
deductible attached to it with a coinsurance of 5 percent.
Month of claim
January
April
May
August
November
December
An insurance policy that required 15 percent coinsurance
attached to it with no policy limit.
Probability of
losses
0.76
0.92
0.37
0.55
0.83
0.44
As a risk management consultant, you are required to advise Project Eastcoast Sdn.
Bhd. on the preferable insurance plan.
Amount of Possible Loss (RM)
8,200
6,500
10,500
9,600
1,700
5,800
Determine the amount retained by Project Eastcoast Sdn. Bhd. and the
amount paid by insurer for Plan North, Plan South and…
Chapter 14 Solutions
Contemporary Mathematics for Business & Consumers
Ch. 14.I - What is the monthly payment and total interest on...Ch. 14.I - Prob. 2TIECh. 14.I - Prob. 3TIECh. 14.I - Prob. 4TIECh. 14.I - Prob. 5TIECh. 14.I - Using Table 14-1 as needed, calculate the required...Ch. 14.I - Prob. 2RECh. 14.I - Using Table 14-1 as needed, calculate the required...Ch. 14.I - Prob. 4RECh. 14.I - Prob. 5RE
Ch. 14.I - Prob. 6RECh. 14.I - Using Table 14-1 as needed, calculate the required...Ch. 14.I - Prob. 8RECh. 14.I - As one of the loan officers for Grove Gate Bank,...Ch. 14.I - As one of the loan officers for Grove Gate Bank,...Ch. 14.I - As one of the loan officers for Grove Gate Bank,...Ch. 14.I - As one of the loan officers for Grove Gate Bank,...Ch. 14.I - As one of the loan officers for Grove Gate Bank,...Ch. 14.I - As one of the loan officers for Grove Gate Bank,...Ch. 14.I - Ben and Mal Scott plan to buy a home for $272,900....Ch. 14.I - 16. Michael Sanchez purchased a condominium for...Ch. 14.I - 17. Luis Schambach is shopping for a 15-year...Ch. 14.I - 18. Phil Pittman is interested in a fixed-rate...Ch. 14.I - 19. Larry and Cindy Lynden purchased a townhome in...Ch. 14.I - Heather Gott bought a home with an adjustable-rate...Ch. 14.I - Joe and Gloria Moutran art purchasing a house in...Ch. 14.I - 22. You are a real estate broker for Aurora...Ch. 14.II - Justin Schaefer owns a home that was recently...Ch. 14.II - Roman Bass cams a gross income of $3,100 per...Ch. 14.II - For the following second mortgage applications,...Ch. 14.II - For the following second mortgage applications,...Ch. 14.II - For the following second mortgage applications,...Ch. 14.II - For the following second mortgage applications,...Ch. 14.II - For the following second mortgage applications,...Ch. 14.II - For the following second mortgage applications,...Ch. 14.II - For the following second mortgage applications,...Ch. 14.II - Calculate the housing expense ratio and the total...Ch. 14.II - Calculate the housing expense ratio and the total...Ch. 14.II - Prob. 10RECh. 14.II - Prob. 11RECh. 14.II - Prob. 12RECh. 14.II - Prob. 13RECh. 14.II - Prob. 14RECh. 14.II - Use Exhibit 14-4, Lending Ratio Guidelines, on...Ch. 14.II - 16. Ronald and Samantha Brady recently had their...Ch. 14.II - Prob. 17RECh. 14.II - Ransford and Alda Mariano own a home recently...Ch. 14.II - Prob. 19RECh. 14.II - Jamie and Alice Newmark have a combined monthly...Ch. 14.II - Prob. 21RECh. 14.II - According to moncy.CNN.com. with mortguge rates...Ch. 14 - 1. Land, including permanent improvements on that...Ch. 14 - A(n) ___________ is a loan in which real property...Ch. 14 - Mortgage ___________ points are an extra charge...Ch. 14 - Prob. 4CRCh. 14 - 5. A(n) ___________ account is a bank account used...Ch. 14 - Prob. 6CRCh. 14 - Prob. 7CRCh. 14 - Prob. 8CRCh. 14 - Prob. 9CRCh. 14 - Prob. 10CRCh. 14 - A home equity ___________ is a lump-sum second...Ch. 14 - Prob. 12CRCh. 14 - Prob. 13CRCh. 14 - Prob. 14CRCh. 14 - Prob. 1ATCh. 14 - Prob. 2ATCh. 14 - Suzanne Arthurs purchased a home with a $146,100...Ch. 14 - Prob. 4ATCh. 14 - Prob. 5ATCh. 14 - Prob. 6ATCh. 14 - Prob. 7ATCh. 14 - Prob. 8ATCh. 14 - Prob. 9ATCh. 14 - Prob. 10ATCh. 14 - Prob. 11ATCh. 14 - 12. Dale Evans bought the Lazy D Ranch with an...Ch. 14 - 13. Diversified Investments purchased a 24-unit...Ch. 14 - Larry Mager purchased a ski lodge in Telluride for...Ch. 14 - 15. A Denny’s Restaurant franchisee is looking for...Ch. 14 - Prob. 16ATCh. 14 - Adam Marsh is purchasing a $134,000 condominium...Ch. 14 - Prob. 18ATCh. 14 - Prob. 19ATCh. 14 - Prob. 20ATCh. 14 - 21. Phil Armstrong earns a gross income of $5,355...Ch. 14 - 22. Magda Leon is applying for a home mortgage...
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