Ann wants a mortgage to buy a house. Ann gives the following information to the bank:

Income: $240k/year or 20k/month

Average monthly debt: $2k

Estimated monthly Taxes + Insurance: $700

Down-payment: $50k saved

Ann's down-payment will be $50k, she will take out a mortgage for the remainder

Ann qualifies for a 30 year FA-CPM-FRM (monthly payments & monthly compounding) with:

Annual interest rate: 4%

Income test: (28%/36%) Collateral test:

Closing costs + buy-down points: $5,000 + 1.75% of the balance at origination. Example: if Ann gets a $100k mortgage, she will pay $5k + $1.75k=$6.75k at origination.

1 Underwriting

1.1: Fill in the spreadsheet (sheet "Underwriting") for Ann.

1.2: based on the FE DTI what is the biggest payment Ann can make?

1.3: based on the BE DTI what is the biggest payment Ann can make?

1.4: based on both the FE & BE DTI what is the biggest payment Ann can make?

1.5: based on both the FE & BE DTI what is the biggest loan Ann can get?

1.6: based the LTV test and Ann's $50k down-payment, what is the biggest loan Ann can get?

1.7: based on the income & collateral tests, what is the biggest loan Ann can get?

1.8: based on the income & collateral tests, what is the biggest payment Ann can make?

1.9: if Ann makes a 50k down-payment, how much house can Ann afford?

1.10: how much are Ann's total mortgage closing costs?

Borrower info: Borrower info