The Drive-By Factor

Early in my mortgage career, I created an excel spreadsheet, which started to answer a single question a borrower might have.

 

What I learned quickly, is that the question seemed to be relevant to many borrowers and then along the way, I have added more and more content for my excel worksheet or planning worksheet

 

The goal for sharing these planning worksheets is to help you understand the terms of a loan, the expected expenses, down payment, and housing payment and provides us with ‘talking points.

 

• These worksheets will share the detailed expenses you will expect on a transaction are in Column 1.  These fees include our bank fees, appraisal, credit report, title fees, recording fees, and a calculation of your escrow account

• And with Conventional loans, I try to show the different ways to handle PMI, including options we offer such as:

  • Pay the PMI monthly

  • Pay a Single Up Front premium as an expense at closing or,

  • Pay a Single Up Front Premium, but roll that cost into your loan

 

Now, I have added a new feature to my planning worksheet.  I developed this feature to help my customers have a quick way to determine their expected housing payment each month.

This feature is the Drive-By or “DB” Factor.  Based on each individual’s profile, every home buyer has their own unique “Drive-By Factor”. 

This Drive-By Factor is based on a borrower’s loan type, credit score, down payment, PMI type, and PMI rate.

Knowing your Drive-By Factor, you can use this factor to determine an approximate monthly house payment, PITI.  These are shown on your worksheets.  To determine the new PITI, multiply the factor x sales price in 1000’s

 

So, for every sales price of a home you are looking to make an offer on, you can easily determine your expected payment by multiplying the DB factor by the sales price of $1,000.

​

For Example: