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Esther Said:

Broker equation question. Need help with numbers?

We Answered:

Okay so how the math is done is like this: 50% DTI x $3,258 = $1,629. That figure, $1,629 represents the MAX amount of monthly debt you can have out-going, including the new mortgage payment. So what you have to do first is take away your current monthly bills of $673. $1,629 -$673 = $956 = maximum amount your mortgage payment can be, including taxes and insurance. All depending on where you live and how much taxes run will impact how much you're approved for. For example if $200 of the $956 goes to taxes and homeowner's insurance, then the difference, $756 is the maximum amount your principal & interest payment can be. Also depending on what rate you qualify for, and if you're getting a down payment will determine these figures, but estimating I'd say you're looking around a $120,000 - $130,000 approval amount.

Also, you titled your question "broker equation question". In case you are going through a broker, please don't. A broker charges you thousands in closing costs and shops you with lenders, something you could easily do on your own. Check around with local credit unions (typically lower rates and fees) and compare Good Faith Estimates. Also, an approval should only take 24 hours to get, so if you've been waiting longer than that go somewhere else.

Natalie Said:

Can anyone provide macroeconomics homework help?

We Answered:

Assuming 10 years loan annual payment should be:
Net credit: 450'000 - 45'000 = 405'000
PV = PMT(1/(1+i) + 1/(1+i)² + .... + 1/(1+i)^10)
PV = 405'000
i = 5.4%
(1/1.054 + 1/1.054² + .... + 1/1.054^10) ? 7.573913
405'000 = 7.573913 * PMT
PMT = 405'000 / 7.573913 ? 53'473
Assuming taxes should be payed at the end of the year and object is depreciated property after first year value of the property will be:
Value (Land) = (450'000-130'000) x (1-1%) = 320'000 x 0.99 = 316'800
Value (Building) = 130'000 x (1-4%) = 130'000x0.96 = 124'800
Total value = 316'800+124'800 = 441'600
Property tax = 441'600 x 2.9% = 12'806.4
Insurance = 1'400
Utilities = 300x12 = 3'600

PMT = 40% After tax net income
After tax net income = Gross Income - Ins - Util - Tax
PMT = 0.4 (Gross Income - Ins - Util - Tax)
53'473 = 0.4 ( Gross Income - 1'400 - 3'600 - 12'806.4)
Gross Income - 1'400 - 3'600 - 12'806.4 = 53'473 / 0.4 ? 133'682.5579
Gross Income = 133'682.5579 + 1'400 + 3'600 + 12'806.4 ? 151'488.96
After tax annual net income ? 133'682.56

Audrey Said:

Loan officer's that qualify for property investment purchases? Need you insight?

We Answered:

Rental income is not usually counted as income unless the property has long term tenants or has a history of being rented without vacancy.

But, if you dont understand where they came up with that number, >ask them<.