- Sandras gross monthly income is $3690. She is applying for a mortgage loan that will have a $880 monthly mortgage payment (principal and interest). In addition, property taxes will be $110 per month, and homeowners insurance will be $55 per month. Sandras other debt payments are $275 (car loan) and $220 (minimum payments on credit cards). Will she qualify for the mortgage loan if her lender requires the mortgage debt service ratio to be no more than 39 percent and the debt payment ratio to be no more than 38 percent?

No, because her mortgage debt service ratio and her debt payment ratio both exceed the lenders limits.

No, because her debt payment ratio exceeds the lenders limit.

Yes, because both her mortgage debt service ratio and her debt payment ratio meet the lenders requirements.

Yes, because her mortgage debt service ratio is lower than the lenders limits.

- Your current mortgage payment is $890. Interest rates have fallen and you estimate that, if you refinance your mortgage, your new payment will be $790. You expect closing costs to be $4000. If you plan on selling the home in two years, should you refinance?

Yes, you will save $1580 on the refinance.

No, it will take 3 years to break-even on the refinance.

No, it will take 40 months to break-even on the refinance.

Yes, you will save $2420 on the refinance.

- A lender offers a 30-year mortgage at 5% with no points (mortgage payment = $518) or a 30-year mortgage at 4.75% with 1 point (mortgage payment = $494). If the loan amount is $130000, this is a good deal for the borrower as long as he or she plans to keep the mortgage for at least

24 months.

17 months.

34 months.

54 months.