Underwriting

Question 1

What must you times non-taxable income by to get a proper number for PFIA?

Answer 1

1.25

Question 2

If taxes and insurance are not available, how can you calculate the annual taxes and insurance roughly?

Answer 2

Take 1.25% of the property value

Question 3

What do you enter in “cash required for this loan” for a mortgage?

Answer 3

PITI - Principal, Interest, Taxes, Insurance annualized

Question 4

What do enter in the “cash required for this loan” section for a HELOC?

Answer 4

1% of loan amount

Question 5

What happens to the interest rate if the number of fixed interest rate years increases?

Answer 5

The interest rate increases

Question 6

For an SBA loan, what is a 504 used for?

Answer 6

Real estate loan

Question 7

For an SBA loan, what is a 7a used for?

Answer 7

Non real estate loans

Question 8

When taxes and insurance are unavailable what must you do to account for this?

Answer 8

Add in 1.25% of property value

Question 9

What must be done when we refinance/ pay off/ or restructure current debt. (Ex. Customer is refinancing current mortgage)

Answer 9

We must include current mortgage payment up top but subtract it out for (cash req. for this loan)

Question 10

For rental income you should always use net (T/F)

Answer 10

False, you should always use gross rental income.

Question 11

What must be done with rental loss on the supplemental schedule?

Answer 11

Net out the rental loss

Question 12

From schedule C and schedule F on the tax return what must be added back to give a better overall view of financial status?

Answer 12

Depreciation and Interest

Question 13

In addition to rental loss what must be netted out on supplemental schedule?

Answer 13

Business income (loss)

Question 14

Account for schedule _______ on front end, then _________ out rental loss.

Answer 14

E, net

Question 15

What is “cash required for loan” on a construction loan?

Answer 15

Interest only payments

Question 16

A business tax return, LLC distribution or contribution

Answer 16

K-1

Question 17

Where do we send ATR underwrites? (Email Address)

Answer 17

Nc_az-creditspecialist@efirstbank.com

Question 18

What percentage do we give gross revenue for rental income without documentation?

Answer 18

75%

Question 19

Why do we discount gross rental income by 25%?

Answer 19

To account for expenses

Question 20

When companies are 100% owned by an individual, what should the business TOTAL liabilities and TOTAL assets equal on a PFIA?

Answer 20

The TOTAL liabilities and TOTAL assets of the BFIA for that business.

Question 21

When there are rental properties from a BFIA, what should occur because of the 25% discount on gross rental income?

Answer 21

Add back taxes and insurance because these are accounted for in the 25% discount.

Question 22

What needs to happen with TCA and TCR from BFIA’s when they are 100% owned by one individual?

Answer 22

Put TCA and TCR on PFIA supplemental schedule combined

Question 23

What is the maximum LTV on a 10 yr HELOC?

Answer 23

80%

Question 24

What is the maximum LTV on a 5 yr HELOC?

Answer 24

90%