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 -Anns 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 Anns $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 Anns total mortgage closing costs?