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This calculator should be used to review an applicants’ itemized revolving credit debt and to calculate how a SECOND MORTGAGE will affect their GDS, TDS and LTV.
Revolving credit debt is determined from the following: Automobile(s)-Loan(s)/Lease(s), Personal Loans, Credit Lines, Leases, Credit Cards, Department Stores, Appliance Stores, Furniture Stores, Gas Credit Cards, Student Loans and Support Payments. DO NOT include monthly Utility Costs, Rent or Mortgage Payments, Insurance and Cable/Satellite Costs.
A review of revolving credit debt could possibly reveal revolving credit that is soon to retire. The importance being that most lenders will disregard such a debt if that debt is to retire within 6 months of the application.
Enter the applicants’ Purchase Price/Property Value, Gross Annual Incomes, the annual property taxes, annual heating costs and monthly condo fees, if applicable, and the current details of the existing First Mortgage such as current balance, the principal & interest payment, interest rate and date of maturity.
Now enter the details for the Second Mortgage. The Second Mortgage amount requested, the Second Mortgage interest rate (STATED ANNUAL RATE), the AMORTIZATION and the TERM.
Click Calculate Now and review the COMBINED ratios.
Your clients’ COMBINED ratios will dictate what funding sources will be available to them. The better their ratios the better the interest rate and terms. The best available funding source normally depends upon whether or not your clients will qualify for a Second Mortgage from a primary institutional source. If they do not, then the only remaining choice will be to find a private Second Mortgage, which normally means a higher interest rate and terms with bonuses/penalties.