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Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

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BuyFindarrow_forward

Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

You are a mortgage broker at Interamerican Bank. One of your clients. Bill Cramer, has submitted an application for a mortgage with a monthly PITI of $1,259. His other financial obligations total $654.50 per month. Bill earns a gross income of $4,890 per month.

a. What is his housing expense ratio?

b. What is his total obligations ratio?

c. According to the Lending Ratio Guidelines on page 468. for what type of mortgage would Bill qualify, if any?

d. If Bill decided to get a part-time job so that he could qualify for a conventional mortgage, how much additional monthly income would he need?

(a)

To determine

To calculate: The housing expense ratio, if Bill cramer, has submitted an appication for mortgage with a monthly PITI of $1,259 and other financial obligations total $654.50 per month and his gross income is $4,890 per month.

Explanation

Given Information:

Bill cramer, has submitted an appication for mortgage with a monthly PITI of $1,259 and other financial obligations total $654.50 per month and his gross income is $4,890 per month.

Formula used:

The housing expense ratio is given as;

Housing expense ratio=monthly housing expensesmonthly gross income

Calculation:

Bill cramer, has submitted an appication for mortgage with a monthly PITI of

(b)

To determine

To calculate: The total obligation ratio, if Bill cramer, has submitted an appication for mortgage with a monthly PITI of $1,259 and other financial obligations total $654.50 per month and his gross income is $4,890 per month.

(c)

To determine

The type of mortgage would Bill qualify, if any with the help of Lending Ratio Guidelines. And, Bill cramer, has submitted an appication for mortgage with a monthly PITI of $1,259 and other financial obligations total $654.50 per month and his gross income is $4,890 per month.

(d)

To determine

To calculate: The additional monthly income he need, if Bill decided to get a part-time job to qualify himself for a conventional mortgage.

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