Underwriting Flashcards
What must you times non-taxable income by to get a proper number for PFIA?
1.25
If taxes and insurance are not available, how can you calculate the annual taxes and insurance roughly?
Take 1.25% of the property value
What do you enter in “cash required for this loan” for a mortgage?
PITI - Principal, Interest, Taxes, Insurance annualized
What do enter in the “cash required for this loan” section for a HELOC?
1% of loan amount
What happens to the interest rate if the number of fixed interest rate years increases?
The interest rate increases
For an SBA loan, what is a 504 used for?
Real estate loan
For an SBA loan, what is a 7a used for?
Non real estate loans
When taxes and insurance are unavailable what must you do to account for this?
Add in 1.25% of property value
What must be done when we refinance/ pay off/ or restructure current debt. (Ex. Customer is refinancing current mortgage)
We must include current mortgage payment up top but subtract it out for (cash req. for this loan)
For rental income you should always use net (T/F)
False, you should always use gross rental income.
What must be done with rental loss on the supplemental schedule?
Net out the rental loss
From schedule C and schedule F on the tax return what must be added back to give a better overall view of financial status?
Depreciation and Interest
In addition to rental loss what must be netted out on supplemental schedule?
Business income (loss)
Account for schedule _______ on front end, then _________ out rental loss.
E, net
What is “cash required for loan” on a construction loan?
Interest only payments
A business tax return, LLC distribution or contribution
K-1
Where do we send ATR underwrites? (Email Address)
Nc_az-creditspecialist@efirstbank.com
What percentage do we give gross revenue for rental income without documentation?
75%
Why do we discount gross rental income by 25%?
To account for expenses
When companies are 100% owned by an individual, what should the business TOTAL liabilities and TOTAL assets equal on a PFIA?
The TOTAL liabilities and TOTAL assets of the BFIA for that business.
When there are rental properties from a BFIA, what should occur because of the 25% discount on gross rental income?
Add back taxes and insurance because these are accounted for in the 25% discount.
What needs to happen with TCA and TCR from BFIA’s when they are 100% owned by one individual?
Put TCA and TCR on PFIA supplemental schedule combined
What is the maximum LTV on a 10 yr HELOC?
80%
What is the maximum LTV on a 5 yr HELOC?
90%
