1. Mr. Smith has an annual gross income of $60,000 and pays $400 per month on payments towards an auto loan. He would like a buy a house, but unsure how large of loan he could qualify for. What is the maximum size of loan Mr. Smith could qualify for if a lender requires a totaldebt ratio less than or equal to 45% to originate a 30year FRM loan at 6% with 1 point?

2. What is the main attraction of a FHALoan for some borrowers over conventional financing?

3. You have been offered a $535,000 30year FRM loan at 5.28% with 2 points of originations fees to purchase a $600,000 house, but the lender requires you to pay $400 per month in PMI until the LTV is less than 80%. What is the APR and EBC of the loan if you plan to prepay after 7 years? What is the incremental cost of the $55,000 if the lender is willing to offer the same loan terms if the balance was $480,000 with no PMI?

4. What is the main difference between Yield Maintenance Fees and Defeasance?