Calculating Loan Payments and Ratios

The video tutorial covers various aspects of financial calculations related to loans, including calculating interest-only payments, PMI, income from wages, down payments, loan-to-value ratios, acquisition costs, and mortgage payment limits. It emphasizes understanding the formulas and reading problems carefully to extract necessary information while ignoring irrelevant data.

What is the first step in calculating an interest-only payment?

• Add the loan amount to the interest rate.

• Multiply the loan amount by the note rate.

• Subtract the interest rate from the loan amount.

• Divide the loan amount by the interest rate.

How do you calculate the annual interest from a loan amount?

• Multiply the loan amount by the interest rate and press equal.

• Divide the loan amount by the interest rate and press equal.

• Add the loan amount to the interest rate and press equal.

• Subtract the interest rate from the loan amount and press equal.

What should you do if a math problem provides more information than needed?

• Use all the information provided.

• Ignore the problem.

• Identify and use only the necessary information.

• Ask for clarification.

How is the monthly PMI calculated from the annual PMI?

• Subtract 12 from the annual PMI.

• Divide the annual PMI by 12.

• Multiply the annual PMI by 12.

• Add 12 to the annual PMI.

How many pay periods are there in a year for bi-weekly payments?

• 26

• 52

• 24

• 12

What does 'minimum investment' refer to in loan terms?

• The total loan amount.

• The interest rate.

• The down payment.

• The monthly payment.

How is the Loan to Value (LTV) ratio calculated?

• Subtract the appraised value from the loan amount.

• Divide the loan amount by the appraised value.

• Add the loan amount to the appraised value.

• Multiply the loan amount by the appraised value.

What is included in the acquisition cost?

• The total amount needed to purchase the property, including down payment and closing costs.

• Only the down payment.

• Only the closing costs.

• Only the loan amount.

What is the front-end ratio also known as?

• Loan-to-value ratio.

• Housing expense ratio.

• Total obligation ratio.

• Debt-to-income ratio.

What is the first step in calculating the maximum mortgage payment?

• Divide the gross income by the back ratio.

• Subtract the debt from the gross income.

• Multiply the gross income by the front ratio.

• Add the debt to the gross income.