Interview Help - Next week as a loan processor/analyst in the mortgage banking division
I have an interview next week as a loan processor/analyst in the mortgage banking division of a capital management group. Job description says to know how to calculate figures and amounts such as loan amounts, interest rates, loan constants, ratios, percentages, areas. I would think that may be a technical part of my interview. I come here for any advice or tips on what maybe to expect. Any advice would be great.
Anybody? Interview is in 2 days. Any advice is greatly appreciated.
Why don't you just Google each of those terms for descriptions/formulas?
Here are the basics...
Annual Payment = P / [ ( 1 - (1/(1+i)^n) ) / i
Interest rates good to assume would be around 4-5% for a strong company, that would be decent assumption for something like the DELL rumored take private. Use 4% for a home loan for someone with good credit... always use round numbers in an interview so you can calculate rough numbers faster.
Interest (lost/earned) on cash just use 1% to be safe.
Coverage ratios are usually done on FCF or EBITDA. Basically covenants are based on cash flow ratios... not much more you need than Total Debt/EBITDA or Calculating a ratio such as EBITDA or FCF/interest payment
Other ratios could be Price to book and price to tangible book.
In terms of percentages... guessing they just mean what your returns are. A good rough number is a 7cap basically pay back that investment in 7 years. In an interview I would use a 10cap though so my numbers were easy to calc... If they say something like "When would you expect to pay back on a home worth $1M" I'd say roughly 10 years because you can earn... calculate payment based on annual payment formula above.
Areas? That part i have no idea wtf they are talking about, maybe just a stupid metric like "price per square meter". All the above should cover you for a basic interview though.
Have fun.
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