For a composite couple borrowing $400,500 at 6.625 percent, the ratios land at 31.7 and 41.3 percent, and the Unit 4 worksheet for MT431 tests both against dated federal rules. Searches like "mt 431 unit 4 assignment example", "mt431 unit 4 sample" and "mt431 unit 4 example" land here.
What a finished MT431 Unit 4 borrower qualification worksheet looks like
Four pages in worksheet form, one ruled section per underwriting question. Income comes first: Andre's $71,500 salary as $5,958.33 a month, Keisha's hourly pay for 36 hours weekly as $4,251.00, and her declining overtime entered at the recent year's $218.33, for $10,427.67 of qualifying income. The housing payment is itemized next, principal and interest of $2,564.45 plus taxes, homeowners insurance and mortgage insurance, totaling $3,304.23. Recurring debts of $1,001 follow, with the car loan's 14 remaining payments noted. Ratios, a loan-to-value of 90 percent and reserves of 4.7 months sit in a results box. A final block tests the file against Regulation Z's ability-to-repay factors and the General QM price threshold, with the average prime offer rate in brackets.
How a MT431 Unit 4 example is structured
The worksheet follows the order an underwriter reads a file: income, then the proposed payment, then existing debts, then the ratios those produce, and only then the regulatory tests. Each income line states its documentation, pay stubs and W-2s for the salary and two years of tax returns for the overtime, because the overtime decision moves the outcome more than any other entry. Ratios appear twice, with and without overtime, so a reader sees that 42.2 percent still clears the bracketed limit. The legal block is dated. Regulation Z's ability-to-repay rule has applied since January 10, 2014, and its General QM definition, amended in 2020 with compliance mandatory from October 1, 2022, now tests pricing rather than a fixed 43 percent debt ratio. With an APR of 6.659 percent sitting 0.54 points above the bracketed APOR, the loan falls inside the safe harbor.
Qualifying income, line by line
Salary, hourly wages and overtime, each with its source document, and the overtime taken at the lower of two years because the trend is downward.
The full housing payment
Principal and interest on $400,500, taxes at a bracketed 1.18 percent of the $445,000 price, $142 of insurance and $160.20 of mortgage insurance.
Debts and the two ratios
Car, student loan and card minimums totaling $1,001, producing a 31.7 percent front-end and a 41.3 percent back-end ratio.
Collateral and reserves
Ninety percent loan-to-value, which triggers mortgage insurance, and $15,650 left after closing, about 4.7 months of housing payments.
Ability to repay, dated
The eight Regulation Z factors checked in turn, then the price test that replaced the old 43 percent ceiling for General QM loans.
Where marks go in MT431 Unit 4
Income handling carries the heaviest weight in most sections. Worksheets that average a declining overtime figure, or count it without two years of history, overstate what the borrower can carry and are marked down even when the ratios pass. A housing payment limited to principal and interest is another common gap, since taxes, insurance and mortgage insurance belong in the front-end ratio. Instructors frequently check the regulatory statements for accuracy and date: describing 43 percent as a current federal cap, or omitting that the General QM definition changed, signals reliance on an outdated source. Credit follows ratios reported with their inputs visible, so a grader can recompute them. Reserves and loan-to-value are sometimes skipped entirely, and a file approved on ratios alone reads as half underwritten.
Get a MT431 Unit 4 example written to your instructions
The Unit 4 borrower file is what matters here: incomes, debts, the price and the proposed loan, plus the rubric and any lender limits the case names. A free first worksheet comes back within 24-48h, showing each ratio's inputs, flagging income that needs a documented history, and dating every regulatory statement it relies on.
MT431 Unit 4 questions, answered
Is 43 percent still the maximum debt-to-income ratio?
Not under federal law for General QM loans. The CFPB replaced that fixed ceiling with a pricing test in a 2020 rule, mandatory since October 1, 2022, though lenders must still consider and verify debt-to-income or residual income. Loan programs and individual lenders set their own limits, so a case may name 43, 45 or 50 percent; use whichever your prompt specifies.
What counts in the front-end ratio?
The full proposed housing payment: principal, interest, property taxes, homeowners insurance, mortgage insurance and any association dues, divided by gross monthly income. The back-end ratio adds recurring debts such as car, student loan and minimum card payments. Utilities, groceries and child care are generally excluded, even though they affect what a household can really afford.
How is variable income treated on the MT431 worksheet?
Most guidelines want a two-year history for overtime, bonus or commission income and look at the trend. Stable or rising income is usually averaged; declining income may be counted at the lower recent figure or excluded until it stabilizes. Say which rule the case lender applies, document the years used, and show the ratio both with and without that income.