Assume that Gifty Mensah wants to buy a property at Lakeside estate. The property is a threebedroom apartment going for GHS $450,000.$ The lender requires Gifty to make a down payment

of GHS $50,000.$ The interest on the loan is $20\%$ per annum. The loan is for a $20-$year period.

The lender requires payments on the mortgage to be made on a monthly basis. Gifty earns GHS

$13,000$ a month before tax from her regular employment.

a$).$ Find the monthly payment on the mortgage.

b$).$ Find the payment$-$to$-$income ratio. Will Gifty qualify for this loan if the lender required a

PTI of $40\%?$

c$).$ Find the loan$-$to$-$value ratio. Will Gifty qualify for this loan if the lender requires a LTV of

$90\%?$

d$).$ Gifty has a FICO score of $400,$ what does this indicate about the credit quality of Gifty? Is

the bank likely to grant the loan if this were the only factor they were considering?

e$).$ Construct an amortization schedule for the six months of the loan. What do you notice?

f$).$ Assume that Gifty makes a payment of GHS $26,795\mathrm{.}30$ at the end of month $6.$ What will be

the principal and interest payment in month $7?$ What is the effect of the partial pre$-$payment?

g$).$ Now let$$s assume that instead of a fixed rate loan, the loan was an ARM which resets every

$12$ months. Now assume that the new rate on the loan is now $25\%.$ What will be the new

monthly payment on the loan for the next $12$ months