Excercise #1

Exercise #1

Getting Started with the AskChristee Quick PreQual

 

Please review the AskChristee app instructions and the AskChristee user guide. These files were attached to app invite email and are available on the app menu.

The homebuying process can be a maddening array of unfamiliar numbers and calculations. Our goal is to provide you with useful data to allow better communications between the homebuyer, Realtor, and lender.

The proper price home is a combination of desired monthly payment and available cash. The Quick PreQual module allows for viewing potential purchase price options based upon location loan type, payment, and cash.

The Quick PreQual Module is a great tool to convert desired monthly payment into a projected purchase price. However, the module does not display affordability features.

Buyer PreQual module will produce a more in-depth report.

You should review potential monthly payment with a Lender.

Exercise #1 Part A

Help File – Select kebob menu (three dots) in the top right corner to open file Help File for a better understanding of the inputs associated with the module.

Select Quick PreQual from Module Page.

Required Inputs: Please enter following required inputs:

Location: Anne Arundel County, Maryland.  The app has ‘type ahead’ feature which means you can start typing the name of the state or county and the available list will generate.

Interest Rate: For this exercise, we will use the default rates.

Loan Type: Please select Conventional, FHA, and USDA. Simply tap the loan type to select or unselect.

Loan Term: Most loans are based on a 30-year term. You may change the term with the slider bar or by touching the input field and entering the number in years. Use the default 30-year term.

Limit Payment. Enter the desired total monthly payment. This could be the monthly payment a lender has suggested or an amount of your choosing, based upon your lifestyle.

Enter 3,000.

Married: Check the box for ‘married’.

1st Time Buyer: Check the box for 1st time homebuyer.

Submit Inputs for calculation by touching check mark in green circle.

Viewing Results:

Results Comparison.  Select appropriate tab to view results for each loan type.

 

Conv

FHA

USDA

Projected Price

$370,150

$369,627

$375,525

Base Loan

$359,025

$356,690

$375,525

Total Loan

$359,025

$362,932 *

$379,280 *

Down Payment

$11,125 (3%)

$12,937 (3.5%)

$-0-

Closing Cost

$10,818

$10,803

$10,946

Cash Required

$21,943

$23,740

$10,946

 

* Total loan: FHA and USDA loans require a funding fee which is added to loan amount.

 

The results display the maximum price home with the desired payment and minimum amount of cash required for each loan type selected. This is referred to as ‘minimum cash results.’

 

Loan Notes: The loan notes highlight specific items for each loan type.  For example, a USDA loan indicates the least amount of required cash, however, the USDA notes indicate USDA loans are only partially available in Anne Arundel County.

Changing or adding additional inputs:

Exit from Results by tapping the “X” in top left.

Saved Inputs: Notice that our inputs from previous submit are still available.

Exercise #1 Part B

Optional Inputs:

Step 1. For this exercise, we will deselect all loan types except FHA.

Step 2. In optional inputs, enter cash of $20,000.

Step 3. Enter credit score of 725

Note: The credit score entered could alter certain results such as Private Mortgage Insurance.

Step 4. Enter Seller Credits of 3 (3%).

Step 5. Enter lender fees of $1,500.

Note. We could have entered each optional input separately and hit submit to view impact of that input.

Step 3. Hit Submit.

Viewing Results:

We now have 2 results for an FHA loan. At the top you see a green slide button. You can toggle between ‘Spending Cash” and “Minimum Cash” results. If the button is green, you are viewing minimum cash results.

Understanding New Minimum Cash Results: The first calculation (Part A results above) indicated a $369,627 required minimum cash $23,740. The new results indicate the same price home requires minimum cash $14,152. The new lower minimum cash is a result of the combined effect of the optional inputs entered. As a new Christee user, this will seem very confusing. We suggest you submit after each optional input entry to see the effect of that input.

Understanding Spending Cash Results. FHA Option 2 Price is $376,575 with Spending Cash of $20,000 and maintaining payment not to exceed $3,000.

The Spending Cash results (Option 2) displays suggested price home within payment   and available cash parameters including other optional inputs.

 

Loan Notes: Loan notes either summarize elements of the results or provide specific information regarding the loan type.

Question. Why didn’t the projected sales price increase by same amount as increase in cash?

Answer. The cash is allocated to maintain the desired payment while spending available cash.

Question: What is seller credit limited to $11,297 on option 2 results?

Answer. The maximum seller credit is controlled by loan type and closing cost. Christee will maintain credits not to exceed allowable amounts.

Question. What is the Estimated Tax deduction?

Answer. This is the estimated annual mortgage interest and property taxes. In other modules such as Buyer PreQual, Christee estimates tax saving based upon annual incomes.

Question. When I run the module based on exercise inputs, the closing cost are slightly different. Why?

Answer. Certain closing cost are date sensitive. The Quick PreQual module estimates closing cost based upon a closing 30 days from date of execution. Thus, the estimated closing date has changed and items like pre-paid interest and property tax adjustments will have changed.

PDF File. There is a PDF file available after each Christee Report. The PDF is emailed to the email account associated with your AskChristee login. If you wish the report emailed to a different email, change the email setting at the bottom of Optional Inputs.

The PDF report includes a side-by-side comparison for each loan type selected and a breakdown of the estimated closing cost.

 

Enjoy Your Christee Experience!