This financial report was prepared for Annette and David Morales by Michael Brieske and Stephen Good to assist them in purchasing a new home in Palm Springs, CA. It includes details of two home options that fit their budget and needs. Home A at 2318 Acacia Rd E has 4 bedrooms and 3 bathrooms for $168,900, with estimated monthly costs of $1,185.21. Home B at 475 Village Square West has 3 bedrooms and 3 bathrooms for $169,500, with estimated monthly costs of $1,187.03. The report also provides the Morales' financial details and calculations for mortgage amounts.

1. Financial Report
For New Home in
Palm Springs
Prepared For the Morales Family by: Michael Brieske and Stephen Good

2. Annette and David Morales are two hard working parents of one child that would love to be able to move
out of Santa Maria CA. and into a new environment. Upon interviewing them they have decided to move to
Palm Springs, CA. We found two beautiful locations there for them to choose from, that not only suited their
budget, but was comfortable to live in. This Report contains all of the figures needed as well as completed
calculations attached. As a bonus a summary of multiple brochures was also included.
Interview #1
Mike Brieske
Where is the area you would like to live?
Annette Aguilar-Morales
Palm Springs
Mike Brieske
How long do you plan on keeping the home you will be purchasing?
Annette Aguilar-Morales
For 10 years
Mike Brieske
How much do you expect your finances to change in the future?
Annette Aguilar-Morales
Well Dave gets several raises each year and I'm making more now that I work year round.
Mike Brieske
How comfortable are you knowing your mortgage payment changing from time to time
Annette Aguilar-Morales
Not very comfortable. I'd like to know that it will be the same amount for the life of the loan.
Mike Brieske
How rapidly do you want to build equity?
Annette Aguilar-Morales
Well, it would be nice to build it up as quickly as possible but does that affect the payment?
Mike Brieske
It shouldn’t really affect the payment but i can look that up
How flexible are you with interest rates? Would you like a high one or a lower one?
Annette Aguilar-Morales
A low one
Mike Brieske
How many rooms would you like in your house?
Annette Aguilar-Morales
At least 3 but no more than 4 (bedrooms i mean)
Mike Brieske
What do you pay monthly paying off loans or any kind of debt?
Annette Aguilar-Morales
I would say around $3000
Mike Brieske
Alright
What is your combined (you and Dave) gross annual income
Annette Aguilar-Morales
$120k
Mike Brieske
Would you want to borrow the max amount for your mortgage?
Annette Aguilar-Morales

3. Sure
Mike Brieske
How soon would you like your home payed off?
Annette Aguilar-Morales
I'd say 15 years
Mike Brieske
Alright
Are you willing to make a higher monthly payment in order to save more on interest?
Annette Aguilar-Morales
Nope
Mike Brieske
Is there anything extra you would like in your house
Annette Aguilar-Morales
Must have 3 bathrooms and a separate laundry room and a large master bedroom and bathroom AND a walk
in closet.

4. The First Steps to Home Ownership
 Know your finances and know how much is coming out and coming in. Choose a lender as well.
 Two types of mortgages; fixed and adjustable rate mortgages.
 Fide Rate mortgages are the interest rate is fixed for the entire loan.
 Monthly payments for the interest and principal never change, regardless of how interest rates
change in the market.
 Adjustable Rate mortgages offer a lower interest rate rather than a fix rate loan. The rate can go
up or down based on a specific interest.
 30 – year fixed rate mortgage is the conventional loan offers the lowest monthly payments in the
fixed rate category.
 15 – year fixed rate mortgage is the borrower pays less than half of the total interest of a 30 year
mortgage.
 A point is equal to 1% of the total amount of a mortgage; one point on a $100,000 mortgage is a
$1,000 (1 percent of $100,000).
 The final interest rate is how and when the actual interest rate you will pay is determined.

5. It’s Your Credit. Make It Work for you.
 Mortgage lenders must determine whether you are not only able but also willing to repay the
mortgage debt.
 To determine your willingness to pay the debt, lenders look at your credit score.
 Credit score is based on your past behavior and how likely you are to repay the mortgage debt.
 High credit scores indicate a low risk that a borrower will not pay for the loan back. Lower scores
indicate a higher risk.
 The scores are not based on human judgment, it applies the same standards to everyone
 The three FICO scores reporting agencies are Experian, Transunion, and Equifax.
 FICO scores may be different at each of the main credit report changes, which means your credit
score might change.
 Most lenders get credit scores directly from the three major reporting companies.
 Using credit scores helps lenders treat each consumer objectively; the scores are blind to cultural
or demographic differences among people.
 Use any of those three agencies if you have any problems with your credit report or credit score

6. Someone Wants to Lend You Money. Help Them.
 There are many things that lenders require you to have when feeling out the application.
 You will need: proof of identity, social security number, and age, number of years of schooling,
material status, and current address.
 Provide all your W-2 forms for the past two years and to two most recent pay stubs.
 Also don’t forget any other proof of other sources like social security, or any disability payments.
 Lenders would like to know where your down payment is coming from.
 Your lender’s processing specialists will verify the information you supply.
 Each mortgage lending company uses specific underwriting guidelines, which are statistical
models that incorporate all the data from your application.
 This whole process may take a few hours, just all depends.
 Be prepared for the lender to ask further questions because they are all about proving loans.
 If your loan is approved then you will get a letter which is the good news.
 Lastly, you must accept the commitment letter by returning a signed copy to the lender in five to
ten days.

7. Coming to Grips with Settlement
 The closing (the settlement), is the last step in getting your mortgage and becoming the owner of
a new house.
 Closing is the legal process of transferring ownership of a home from one person to another.
 The process ends by a meeting with your agent to discuss everything that has been offered.
 There are always fees that are listed with the settlement through the country.
 When closing, you will sign all documents that associate with your mortgage and explain each
document and give you an attorney (if in attendance).
 Always allow some time to complete required documents.
 Within of closing 24 hours, make sure to make a final inspection of your home with your agent to
see if any last minutes changes need to be done.
 Closing requires several documents in legal language; basically it is the certification of the home.
 Make sure you know when the first payment is due so you won’t get behind, because it’s hard to
catch back up.

8. Financial Information
 Gross Annual Income: $120,000
 Gross Monthly Income: $10,000
 Monthly Debt: $3,000
 30 Year Mortgage
 4% interest = 4.77
 Insurance = $75
 Property tax = 3.5%
 Tax Bracket = 25%
 Maximum Borrowing amount = $167,714

9. Home A: 2318 Acacia Rd E.
 Bedrooms: 4
 Bathrooms: 3
 2 Car Garage
 Price: $168,900
Monthly Housing Costs
 Monthly Mortgage payment – 779.99
 Property Tax – 492.63
 Insurance – 75
 Maintenance – 140.75
 Tax benefit – 323.16
 Total costs per month - $1185.21

10. House B: 475 Village Square West
 Bedrooms 3
 Bathrooms 3
 2 Car garage
 Tennis courts
 Gated community
 5 pools
 Spa
 Gym
 Price: $169,500
Monthly Housing Costs
• Monthly Mortgage payment – 779.99
• Property Tax – 494.38
• Insurance – 75
• Maintenance – 141.25
• Tax benefit – 323.59
• Total costs per month - $1187.03