Phil Farmer B. Student J. Doe Land Purchase Applicant Name Loan Purpose Loan Type Gross income Purchase home electronics Travel - vacation Consumer Consumer Mortgage $60,000 $120,000 Hugh Manor Major home remodeling Mortgage $100,000 $70,000 $15,000 $65,000 $1,500 $7,000 30 years years 1 year 10 years Loan amount requested Length of loan Current annual fixed debt payment obligations Value of Project/Use $16,000 $0 $0 $20,000 $160,000 $100,000 0.75 0.7 $7,000 Not applicable Not applicable $1,500 Not applicable Not applicable 1 LTV Annual Mortgage Loan Payment Other credit lines (#) Debt History $6,122 $8,206 6 6 12 Past due on one loan Perfect Previous bankruptcy Perfect Score/Hurdle a) S16,800 (28% of income) b) $21,600 (36% of income) Grant Loan? NO If no, why? because of b) (6,122 + 16,000) > 21,600 Interest Rate 3% Credit Evaluation Question 8. For each applicant 1) Use the appropriate loan model to evaluate the applicant's information (for mortgage loans use information to check hurdles, for consumer loans calculate the score) in) Determine whether the loan should be granted (yes or no) and why (if no) 11) For the consumer loan applicants, calculate what interest rate will be offered for the loan Note that the process/rules are different for each type of loan, and that each applicant is applying for a specific type of loan. Fill in the blank values in the table provided in the Excel file. The first applicant (Phil Farmer) has been completed for you as an example. (40 pts) Mortgage Loans Model: Calculate loan payments with 4% annual interest rate (you need to do this first and add to other loan payments to check the restrictions below). Remember you use Capital Recovery (CR) to calculate loan payments. Maximum loan size (hurdles) restricted such that: a) Mortgage Debt Payments 80,000 9 Category History Perfect 4 Past Due history 2 Bankruptcy 0 Make loan up to 10% of annual income if Sc>6 at an interest rate of 7 prime rate+(10-S The current prime interest rate is 3.25% Phil Farmer B. Student J. Doe Land Purchase Applicant Name Loan Purpose Loan Type Gross income Purchase home electronics Travel - vacation Consumer Consumer Mortgage $60,000 $120,000 Hugh Manor Major home remodeling Mortgage $100,000 $70,000 $15,000 $65,000 $1,500 $7,000 30 years years 1 year 10 years Loan amount requested Length of loan Current annual fixed debt payment obligations Value of Project/Use $16,000 $0 $0 $20,000 $160,000 $100,000 0.75 0.7 $7,000 Not applicable Not applicable $1,500 Not applicable Not applicable 1 LTV Annual Mortgage Loan Payment Other credit lines (#) Debt History $6,122 $8,206 6 6 12 Past due on one loan Perfect Previous bankruptcy Perfect Score/Hurdle a) S16,800 (28% of income) b) $21,600 (36% of income) Grant Loan? NO If no, why? because of b) (6,122 + 16,000) > 21,600 Interest Rate 3% Credit Evaluation Question 8. For each applicant 1) Use the appropriate loan model to evaluate the applicant's information (for mortgage loans use information to check hurdles, for consumer loans calculate the score) in) Determine whether the loan should be granted (yes or no) and why (if no) 11) For the consumer loan applicants, calculate what interest rate will be offered for the loan Note that the process/rules are different for each type of loan, and that each applicant is applying for a specific type of loan. Fill in the blank values in the table provided in the Excel file. The first applicant (Phil Farmer) has been completed for you as an example. (40 pts) Mortgage Loans Model: Calculate loan payments with 4% annual interest rate (you need to do this first and add to other loan payments to check the restrictions below). Remember you use Capital Recovery (CR) to calculate loan payments. Maximum loan size (hurdles) restricted such that: a) Mortgage Debt Payments 80,000 9 Category History Perfect 4 Past Due history 2 Bankruptcy 0 Make loan up to 10% of annual income if Sc>6 at an interest rate of 7 prime rate+(10-S The current prime interest rate is 3.25%