How would i do this?
by Mortgage Rates on Friday, October 8th, 2010 | 4 Comments
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You want us to do your job for you?
Tell Kim and Dan to run away. That is an AWFUL loan. There is nothing at all good about it. THey certainly should not apply for it. They would have to be idiots.
You are asking someone to do your job. This is a bad loan with really higher rates & fees!!
Tell them to go to a experienced mortgage broker
I’m assuming this is an exercise to help you get better at doing this type of calculation.
Start with the up-front money. At a purchase price of $280,000, the 20% down payment will be $56,000, and closing costs will be $7,720 (3 pts + $1M). The Borrowers have $65,840 saved, so they have enough. Monthly, their proposed P&I pmt will be $1,644, property tax will be $380, and insurance will be $50, so PITI will be $2074. With combined monthly income of $7,750, their front end ratio will be 26.8%. Including their car payment, their back end ratio will be 31.8%.
So they should qualify without any problem, assuming their FICO score is at least fair. Hope that helps.
Why in the nine billion names of god would they want to do such an awful loan?
I literally just got done locking a comparable 30 year fixed rate loan at 6.25 with no points to the borrowers. Unless there’s some fly in the ointment you’re not telling us about, shop that loan around some more, because you’re getting raked over the coals three or four times here. It would have to improve – a lot – to be worthy of being called putrid.
(I don’t do business outside California, so I’m not looking for business here)