REFHW_4SFall2007 - 35.72% 41.33% (Housing Expenses + Other...

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05/12/2009 Real Estate Finance - HW#4 Solutions File: REFHW#4SFall2007 Real Estate Finance Homework #4 Solutions Question #1 Conventional Conventional Uninsured Insured Loan Loan House Price $200,000 $200,000 Loan to Value Ratio 80% 95% Loan Amount $160,000 $190,000 Terms Rate 7.00% 7.25% Amortization 30 30 Payment Monthly $1,064.48 $1,296.13 Annual $12,773.81 $15,553.62 Salary $30,000 $30,000 Mr. Midwest $50,000 $50,000 Mrs. Midwest $80,000 $80,000 Total Qualified Income Housing Expenses $12,774 $15,554 RE Taxes $3,000 $3,000 Property Insurance $2,000 $2,000 PMI $1,710 Total Housing Expenses $17,774 $22,264 Other Obligations Student Loans $250 per mo $3,000 $3,000 Car 1 $300 per mo $3,600 $3,600 Car 2 $350 per mo $4,200 $4,200 Installment Loan $200 per mo Total Other Obligations $10,800 $10,800 Payment/Income Ratio 22.22% 27.83% (Total Housing Expenses/Total Income) Total Obligations/Total Income
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Unformatted text preview: 35.72% 41.33% (Housing Expenses + Other Obligations)/Total Income) Question #1: The Midwests qualify under for the conventional uninsured loan but not for the 95% loan because the Total Obligations/To too high. 05/12/2009 Real Estate Finance - HW#4 Solutions File: REFHW#4SFall2007 Question #2: Maximum Housing Expenses/Total Income Ratio 36% 36% Total Income $80,000 $80,000 Total Obligations Permitted $28,800 $28,800 less: Taxes $(3,000) $(3,000) Insurance $(2,000) $(2,000) PMI $- $(1,710) Other Debt Obligations $(10,800) $(10,800) Amount Available for Principal & Interest Payment $13,000 $11,290 divided by loan constant 0.0798 0.0819 Maximum Loan Amount Permitted $162,833 $137,916 divided by LTV Ratio 80% 95% Maximum House Price Affordable by Midwests $203,541 $145,175...
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This homework help was uploaded on 04/18/2008 for the course RE RE Finance taught by Professor Schroer during the Fall '07 term at University of Cincinnati.

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REFHW_4SFall2007 - 35.72% 41.33% (Housing Expenses + Other...

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