Chapter 2.3 National Math Module

A borrower has a monthly payment of $1,980 on a loan with a monthly constant of 6.45. What is the loan amount (to the nearest hundred)? $354,800 $283,300 $198,000 $307,000

$307,000 $1,980 ÷ 6.45 = $307 $307 x 1000 = 307,000

A loan applicant has an annual gross income of $42,000. How much will a lender allow the applicant to pay for monthly housing expense to qualify for a loan if the lender uses an income ratio of 32%? $1,344 $1,000 $853 $1,120

$1,120 $42,000 ÷ 12 = $3,500 $3,500 x 0.32 = $1,120

The Browns obtain a fixed-rate amortized 30-year loan for $310,000 @ 6% interest. If the monthly payments are $1,815, how much interest do the Browns pay in the first month of the loan? $1,815 $1,550 $265 $1,495

$1,550 $310,000 x 0.06 = $18,600 $18,600 ÷ 12 = $1,550

Christy has monthly loan payments of $1,200. Her loan is for $210,000 @ 6.1% interest. How much of her first payment goes towards principal? $132.50 $0 $205 $177.50

$132.50 210,000 x 0.061 = 12,810 12,810/ 12 = 1,067.5 1,200 - 1,067.5 = 132.5

A lender determines that a homebuyer can afford to borrow $160,000 on a mortgage loan. The lender requires an 80% loan-to-value ratio. How much can the borrower pay for a property and still qualify for this loan amount? $180,000 $128,000 $200,000 $168,000

$200,000 $160,000 ÷ 0.80 = $200,000

Ginnie has an interest-only home equity loan at an annual interest rate of 7%. If her monthly payment is $1,458, how much is the loan's principal balance? $208,300 $102,060 $225,000 $250,000

$250,000 $1,458 x 12 months = 17,496 17,496 / 0.07 =$249,942

A home buyer pays $1,800 / month for the interest-only loan on his new house. The loan's interest rate is 6%. If he obtained a 80% loan, what was the purchase price? $216,000 $275,000 $450,000 $360,000

$450,000 1,800 x 12 = 21,600 21,600/ 0.06 + 360,000 360,000 / 4 = 90,000 360,000 + 90,000 = 450,000

Steve is buying Darryl's house for $360,000. Steve's loan amount is $275,000. He has agreed to pay 2 points at closing. How much will Steve pay for points? $3,500 $7,200 $5,500 $6,200

$5,500 $275,000 x 0.01 = $2,750 $2,750 x 2 = $5,500

The loan officer at 2nd National Bank tells Lana she can afford a monthly payment of $1,900 on her new home loan. Assuming this is an interest-only loan, and the principal balance is $410,000, what interest rate is Lana getting? 0.0556 0.0463 0.0616 0.0702

0.0556 $1,900 x 12 = $22,800 $22,800 ÷ $410,000 = 0.0556

If you owe $14,000 on a new loan and pay $880 of interest for the year, your interest rate is? 0.048 0.123 0.057 0.063

0.063 880/ 14,000 = 0.0628

How much is a discount point? 1/8% of the loan amount $1,000 1% of the loan amount $100

1% of the loan amount

Jerry recently obtained an 75% loan on his $410,000 home, and he had to pay $5,600 for points. How many points did he pay? 1.4 points 1.8 points 5.6 points 2.8 points

1.8 points $410,000 x 0.75 = $307,500 $5,600 ÷ $307,500 = 0.018 = 1.8 points