Mortgage Loan Originator Mortgage Math and Calculations 2

Question 1

A borrower earns $85,000 annually. What is their gross monthly income used for qualifying purposes?

Accepted Answer

$7,083

Answer

$85,000 ÷ 12 = $7,083.33 gross monthly income.

Question 2

A property is worth $350,000 and the loan balance is $245,000. What is the borrower's equity percentage?

Accepted Answer

30%

Answer

Equity = $350,000 - $245,000 = $105,000; $105,000 ÷ $350,000 = 30% equity.

Question 3

A borrower is applying for a $300,000 mortgage. The lender charges 1.5 origination points. What is the origination fee?

Accepted Answer

$4,500

Answer

1.5% × $300,000 = $4,500 origination fee.

Question 4

A 30-year mortgage for $200,000 at 5% has a monthly payment of $1,073.64. What is the approximate total interest paid over the life of the loan?

Accepted Answer

$186,510

Answer

Total payments = $1,073.64 × 360 = $386,510; total interest = $386,510 - $200,000 = $186,510.

Question 5

A borrower's monthly PITI payment is $1,800 and their gross monthly income is $5,500. What is their front-end DTI ratio?

Accepted Answer

32.7%

Answer

$1,800 ÷ $5,500 = 0.3272, or approximately 32.7% front-end DTI.

Mortgage Loan Originator Practice Test