Calculated Industries | Qualifier Plus IIIFX | User`s guide | Calculated Industries Qualifier Plus IIIFX

Calculated Industries Qualifier Plus IIIFX
QUALIFIER PLUS IIIFX
®
ADVANCED REAL ESTATE FINANCE
CALCULATOR with CASH FLOW
and COMPLETE BUYER QUALIFYING
Model 3430
Pocket Reference Guide
QUALIFIER PLUS® IIIFX
The QUALIFIER PLUS IIIFX lets you pre-qualify clients and compute financial problems
with ease!
Quickly Solve:
• Time-Value-of-Money (TVM) Problems:
Find Loan Amount, Term, Interest,
Payment, Future Value
• Restricted/Unrestricted Qualifying
• Required Income/Debt
• Qualifying Using Flexible Ratios
• Property Tax and Insurance, Mortgage
Insurance
• P&I and PITI payment
• Sales Price and Down Payment
• Adjustable-Rate Mortgages
• Amortization and Remaining Balance
• Bi-Weekly Loans
• Date Math Problems
New!
• 80:10:10/80:15:5 Combo loans
• APR, including Mortgage Insurance
• Cash Flow/Investment Keys
• Income Tax Savings and Rent vs. Buy
• Interest-Only Payments
• LTV, Month Offset, Prepaid Interest
TABLE OF CONTENTS
KEY DEFINITIONS..................................4
EXAMPLES ...........................................10
Date Example ....................................10
Monthly Mortgage (P&I) Payment .....10
Loan Amount......................................11
Loan Amount Based on Sales Price
and Down Payment .........................12
Interest Rate ......................................12
Term of a Loan ..................................13
Setting Tax and Insurance .................14
PITI Payment, Total Payment and
Interest-Only Payment.....................15
Quarterly Payment.............................16
Amortization.......................................17
Bi-Weekly Loans................................18
Appreciation.......................................19
Retirement Savings ...........................20
APR and Total Finance Charges,
Including Mortgage Insurance .........21
ARM Payment — Lifetime Cap .........22
Estimated Tax Savings ......................24
Rent vs. Buy ......................................25
Setting Qualifying Ratios ...................26
Qualifying Loan Amount ....................26
“Restricted” vs. “Unrestricted”
Qualifying.........................................28
Qualifying Comparison (2 Ratios at
Once)...............................................31
Income Required and Allowable
Monthly Debt ...................................33
80:10:10 Combo Loan vs. Fixed-Rate
Loan with Mortgage Insurance........35
Cash Flow..........................................38
APPENDIX ............................................40
Default Settings .................................40
Decimal Place Setting .......................40
Preference Settings ...........................41
Batteries.............................................41
Reset .................................................41
KEY DEFINITIONS
Note: This is a short “reference” guide. Please
see your Large User’s Guide for details.
:
Colon separator (used for
date, ARM adjustment,
qualifying ratios and
combo loans)
b
Backspace key; for backing up/deleting wrong entry
®
Recalls or re-displays a
value when followed by a
chosen key (e.g., ® ˆ
will display current interest
value)
μ
Memory Function:
- μ Adds value on
display to Memory
- s μ Subtracts value
on display from Memory
- ® μ Recalls Memory
Total
- ® ® Recalls and
clears Memory Total
POCKET REFERENCE GUIDE — 1
s
Sets number of displayed
decimal places and activates 2nd functions
s–
Change sign
sx
Clear All (Note: perform
with caution as it will reset
calculator to defaults)
s=
Preference mode (see
Large User’s Guide for
details)
s÷
Payments per year
(Default 12, for monthly)
sb
Periodic (sets per Period
rather than per Year)
s)
Month offset
s:
Odd-days interest
s+
Tax bracket %
sp
Estimated income tax savings/after-tax payment
sP
Rent vs. Buy
l
Loan amount
p
P&I, PITI, total payment,
and interest-only payment
POCKET REFERENCE GUIDE — 2
T
Number of years
ˆ
Annual interest rate or
cash flow desired rate of
return
sl
Future value
sˆ
APR (annual percentage
rate), including mortgage
insurance, if entered
P
Property price
d
Down payment
sT
Bi-Weekly loan
a
Amortization function
sa
Remaining balance
A
Adjustable-rate mortgage
sA
ARM decreasing interest
% adjustment
s%
ARM lifetime interest cap%
q
Qualify based on
28%-36%
Q
Qualify based on
29%-41%
i
Annual income
POCKET REFERENCE GUIDE — 3
D
Long-term, monthly debt
(e.g., car payment)
s7
Property tax (enter as percent or dollar amount)
s8
Property/homeowner’s
insurance (enter as percent or dollar amount)
s9
Mortgage insurance (enter
as percent or dollar amount)
e
Monthly expenses (such
as homeowner’s association dues)
sd
For entering (or finding)
Loan-to-Value ratio and
computing respective
Down Payment and/or
Loan Amount
!
Used to enter 1st TD
interest:term for Combo
Loans
s!
Used to enter 2nd TD
interest:term for Combo
Loans
POCKET REFERENCE GUIDE — 4
*
Combo loan function for an
80:10:10 LTV* loan; calculates 1st/2nd TD values
and compares them to
entered fixed-rate loan
w/mortgage insurance.
*You may enter any LTV
prior to pressing this key
(e.g., LTV of 90:5, enter 9
0 : 5 *).
s*
Combo loan function for an
80:15:5 loan; same function as above key
c
Allows entry of up to 20
cash flows. Use the s
– to label as positive or
negative
sc
Frequency — labels a cash
flow that is consecutively
repeating
POCKET REFERENCE GUIDE — 5
R
Multi-function key that
computes, upon consecutive presses: IRR%, NPV
& NFV used for cash flow
analysis. (The greater the
IRR and NPV, the more
attractive the investment)
s6
Clear cash flows
POCKET REFERENCE GUIDE — 6
EXAMPLES
Date Example
If a 45-day escrow begins June 15 2004,
what is the closing date and day?
STEPS
KEYSTROKES
Clear
Enter month
Enter day
Enter year
Add 45 days
oo
0.00
6:
615:
6-1504
6-15-04
+ 4 5 = FRI 07-30-04
DISPLAY
Monthly Mortgage (P&I) Payment
Find the monthly (P&I) payment on a 30year, fixed-rate loan of $265,000 at 6.75%
annual interest:
STEPS
KEYSTROKES
DISPLAY
oo
0.00
265)l
265,000.00
Enter term
30T
30.00
Enter interest 6 • 7 5 ˆ
6.75
Find P&I
payment
p
1,718.78
Clear
Enter loan
POCKET REFERENCE GUIDE — 7
Loan Amount
Approximately how much can you borrow
if the interest rate is 6.5% on a 30-year
loan and you can afford $1,500 in monthly payments? What if the interest rate is
lowered to 6%?
STEPS
KEYSTROKES
DISPLAY
Clear
oo
0.00
Enter interest 6 • 5 ˆ
6.50
Enter term
30T
30.00
Enter payment 1 5 0 0 p 1,500.00
Find loan
l
237,316.23
Enter new interest
rate
6ˆ
6.00
Find new loan
amount
l
250,187.42
POCKET REFERENCE GUIDE — 8
Loan Amount Based on Sales Price
and Down Payment
Find both $ down payment and loan
amount if the sales price is $375,500 and
you're planning to put 20% down:
STEPS
KEYSTROKES
DISPLAY
oo
0.00
375500P
375,500.00
Enter down% 2 0 d*
20.00
Find down$
d
75,100.00
Find loan
l
300,400.00
Clear
Enter price
*You do not have to label the value as a percent.
Interest Rate
Find the interest rate on a mortgage if the
loan amount is $98,500, term is 30 years
and payment is $1,150 a month:
STEPS
KEYSTROKES
DISPLAY
oo
0.00
98500l
98,500.00
Enter term
30T
30.00
Enter payment 1 1 5 0 p 1,150.00
Find annual
interest
ˆ
13.78
Find periodic
interest
ˆ
1.15
Clear
Enter loan
POCKET REFERENCE GUIDE — 9
Term of a Loan
How long does it take to pay off a loan of
$15,000 at 10% interest if you make payments of $200 each month?
STEPS
KEYSTROKES
DISPLAY
Clear
oo
0.00
Enter loan
1 5 ) l 15,000.00
Enter interest 1 0 ˆ
10.00
Enter payment 2 0 0 p
200.00
Find term in
years
T
9.85
Number of
months
T
118.19
POCKET REFERENCE GUIDE — 10
Setting Tax and Insurance
Enter an annual property tax rate of 1.5%,
a hazard insurance rate of 0.25% and a
mortgage insurance rate of 0.50%:
STEPS
KEYSTROKES
DISPLAY
Enter tax%* 1 • 5 s 7
Enter insurance%*
•25s8
Enter mortgage
insurance%* • 5 0 s 9
1.50
0.25
0.50
*Note: Do not label as a percent, or use the %
key; it is automatically registered as a percent.
To Enter Tax/Insurance in Dollar Figures: Enter
dollar values for tax/insurance in the same manner — e.g., to enter $5,500 estimated annual
tax, enter 5 5 0 0 s 7.
POCKET REFERENCE GUIDE — 11
PITI Payment, Total Payment and
Interest-Only Payment
•
•
•
•
•
•
•
Term: 30 years
Interest: 6.25%
Sales price: $325,000
Down payment: 5%
Property taxes: 1.3%
Property insurance: 0.25%
Mortgage insurance: 0.45%
Find the Monthly PITI payment:
STEPS
KEYSTROKES
DISPLAY
oo
0.00
30T
30.00
6•25ˆ
6.25
325)P
325,000.00
Enter Down% 5 d
5.00
Enter tax%
1•3s7
1.30
Enter insurance%
•25s8
0.25
Enter MI%
•45s9
0.45
Find loan
l
308,750.00
Find P&I
payment
p
“run” 1,901.03
Find PITI
payment
p
2,436.60
Clear
Enter term
Enter interest
Enter price
— DO NOT CLEAR CALCULATOR —
POCKET REFERENCE GUIDE — 12
Find the total payment, if you estimate
homeowner’s association fees at $80/month.
Also find the interest-only payment:
STEPS
KEYSTROKES
Enter expenses 8 0 e
Find total
payment
ppp
Find interest-only
payment
p
DISPLAY
80.00
2,516.60
1,608.07
Quarterly Payment
Find the quarterly payment on a 10-year
loan of $15,000 with an annual interest
rate of 12%:
STEPS
KEYSTROKES
DISPLAY
Clear
oo
0.00
Set to 4 payments
per year
4s÷
4.00
Enter loan
1 5 ) l 15,000.00
Enter term
10T
10.00
Enter interest 1 2 ˆ
12.00
Find quarterly P&I
payment
p
648.94
Return to 12 payments
per year
12s÷
12.00
POCKET REFERENCE GUIDE — 13
Amortization
• Loan: $300,000
• Term: 30 years
• Interest: 7.5%
Find total interest and principal for the life
of the loan:
STEPS
KEYSTROKES
Clear
Enter loan
oo
0.00
300)l
300,000.00
7•5ˆ
7.50
30T
30.00
p
2,097.64
a
1-360
a
455,151.67
a
300,000.00
a
755,151.67
Enter interest
Enter term
Find P&I pmt
Find # pmts
Find total int.
Find total prin.
Find total pmts
DISPLAY
Find all values for the first year:
Enter Year 1
Find total int.
Find total prin.
Find total pmts
Find balance
Rem. term
Tax deduct.
1a
a
a
a
a
a
a
1-12
22,406.22
2,765.50
25,171.72
297,234.50
29.00
6,273.74
Note: Based on default 28% tax bracket and
loan starting in January. To change these values, see Large User’s Guide.
POCKET REFERENCE GUIDE — 14
Bi-Weekly Loans
• Loan: $212,500
• Term: 30 years
• Interest: 7.85%
Find the Bi-Weekly term, savings, interest
savings, total cost, and Bi-Weekly payment:
STEPS
KEYSTROKES
DISPLAY
oo
0.00
212500l
212,500.00
Enter term
30T
30.00
Enter interest 7 • 8 5 ˆ
7.85
Find payment p
1,537.09
Find Bi-Weekly
term
sT
22.97
Find total interest
savings
T
94,305.23
Find total interest
paid
T
246,545.97
Find total
principal
T
212,500.00
Find total principal plus
interest
T
459,045.97
Bi-Weekly P&I
payment
p
768.54
Clear
Enter loan
POCKET REFERENCE GUIDE — 15
Appreciation
What will a $350,000 home be worth in 3
years, figuring an inflation or appreciation
rate of 6%?
STEPS
KEYSTROKES
DISPLAY
Clear
oo
0.00
Set to 1 payment
per year
1s÷
1.00
Enter present
value
350)l
350,000.00
Enter term
3T
3.00
Enter appreciation
rate
6ˆ
6.00
Find future value
(FV)
sl
416,855.60
Reset payments
per year
12s÷
12.00
POCKET REFERENCE GUIDE — 16
Retirement Savings
If you invest $10,000 today and $250 in
monthly deposits, what will it be worth in
30 years at 7% interest*?
STEPS
KEYSTROKES
DISPLAY
Clear
oo
0.00
Recall payments
per year
®÷
12.00
Enter deposit 1 0 ) l 10,000.00
Enter term
30T
30.00
Enter interest 7 ˆ
7.00
Find FV
sl
81,164.97
Add to M+
μ
M 81,164.97
Clear
oo
0.00
Enter payment 2 5 0 p
250.00
Find FV
sl
-304,992.75
Change minus sign to
plus sign
s–
304,992.75
Add to M+
μ
M 304,992.75
Find total and
clear
®®
386,157.72
*If you deposit funds at the beginning of the
month, you must set to BEG Mode (see Large
User’s Guide/Preference Settings).
POCKET REFERENCE GUIDE — 17
APR and Total Finance Charges,
Including Mortgage Insurance
•
•
•
•
•
Loan: $250,000
Term: 30 years
Interest: 7%
Cost: 1.5 points + $550
Mortgage insurance/MI: $1,200/year
STEPS
KEYSTROKES
DISPLAY
oo
0.00
250)l
250,000.00
Enter term
30T
30.00
Enter interest 7 ˆ
7.00
Find P&I pmt p
1,663.26
Enter MI $
1200s9
1,200.00
Clear
Enter loan
Find Loan Costs:
Recall loan
Find points
Add fees and
find total
Find APR
Find total chgs.
Amt. financed
Total cost
P&I payment
Monthly MI
Find PIMI pmt
®l
250,000.00
x 1 • 5 % = 3,750.00
+550=
4,300.00
sˆ
7.77
ˆ
389,072.25
ˆ
245,700.00
ˆ
634,772.25
ˆ
1,663.26
ˆ
100.00
ˆ
1,763.26
POCKET REFERENCE GUIDE — 18
ARM Payment — Lifetime Cap
•
•
•
•
•
Loan: $230,000
Term: 30 years
Interest: 7.25%
Lifetime cap: 4%
ARM Interest Adjustment: 1% per year
Find the adjusted ARM payments through
year six:
STEPS
KEYSTROKES
DISPLAY
oo
0.00
230)l
230,000.00
Enter term
30T
30.00
Enter interest 7 • 2 5 ˆ
7.25
Find initial monthly P&I
payment
p
“run” 1,569.01
Enter interest
cap
4s%
CAP 4.00
Enter ARM
parameters 1 : 1 A 1.00 - 1.00
Find 1st “adjusted”
payment
A “run” 1 1,724.90
Find 2nd “adjusted”
payment
A
2 1,883.17
Clear
Enter loan
(Cont’d)
POCKET REFERENCE GUIDE — 19
(Cont’d)
STEPS
KEYSTROKES
DISPLAY
Find 3rd “adjusted”
payment
A
3 2,043.26
Find 4th “adjusted”
payment
A
4 2,204.68 M*
Find 5th “adjusted”
payment
A
5 2,204.68 M*
Find principal at start of
6th year
®l
220,856.34
Recall current interest
rate
®ˆ
11.25
Recall remaining
term
®T
25.00
Clear Cap
0s%
CAP 0.00
*Note that the payment for 4th and 5th adjustments (corresponding to the 5th and 6th years)
is the same because the lifetime cap was
reached on the 4th adjustment. An “M” for
“maximum” will appear in the display once the
Cap is reached.
POCKET REFERENCE GUIDE — 20
Estimated Tax Savings
•
•
•
•
•
•
Loan: $150,000
Buyer’s tax bracket: 28%
Term: 30 years
Interest: 8%
Property taxes: $1,500
Property insurance: $250
Note: This is an estimate only.
What is this buyer’s estimated income tax
savings and “after tax” payment?
STEPS
KEYSTROKES
DISPLAY
oo
0.00
term
30T
30.00
interest 8 ˆ
8.00
tax$
1 5 0 0 s 7 1,500.00
insurance$
250s8
250.00
Enter loan
150)l
150,000.00
Find P&I pmt p
“run” 1,100.65
PITI payment p
1,246.48
Enter tax
bracket
28sp
28.00
Find annual tax
savings
p
3,767.32
Monthly tax
savings
p
313.94
Net payment p
932.54
Clear
Enter
Enter
Enter
Enter
POCKET REFERENCE GUIDE — 21
Rent vs. Buy
• Term: 30 years
• Interest: 7.5%
• Down: 10%
Tax: 1.25%
Insurance: 0.35%
Tax bracket: 30%
If your client is currently renting a home
for $1,250/month, find the comparable
home sales price and loan amount that
he or she could afford:
STEPS
KEYSTROKES
DISPLAY
oo
0.00
term
30T
30.00
interest 7 • 5 ˆ
7.50
down% 1 0 d
10.00
tax%
1 • 2 5 s 7 1.25
insurance%
•35s8
0.35
Tax bracket% 3 0 s +
30.00
Enter rent to find comparable
home price 1 2 5 0 s P
221,894.90
Find comparable loan
amount
P
199,705.41
Find PITI pmt P
1,692.23
Find annual tax
savings
P
5,306.75
Monthly tax
savings
P
442.23
Reset tax%
28s+
28.00
Clear
Enter
Enter
Enter
Enter
Enter
POCKET REFERENCE GUIDE — 22
Setting Qualifying Ratios
Enter new qualifying ratios of 30% for
Income and 38% for Debt in q:
STEPS
KEYSTROKES
DISPLAY
Clear
oo
0.00
Enter qualifying
ratios
30:38q
30.00-38.00
Return ratios
to defaults 2 8 : 3 6 q
28.00-36.00
Qualifying Loan Amount
•
•
•
•
•
•
•
•
•
•
Buyer’s income: $75,000
Monthly debt: $500
Down$: $5,000
Property taxes: 1.5%
Property insurance: 0.25%
Mortgage insurance: 0.6%
Monthly association dues: $50
Term: 30 years
Interest: 7.5%
Qualifying ratios: 28%: 36%
(Cont’d)
POCKET REFERENCE GUIDE — 23
(Cont’d)
Find the Qualifying Loan Amount, Price
and Total Payment:
STEPS
KEYSTROKES
DISPLAY
Clear
oo
0.00
Enter income 7 5 ) i 75,000.00
Enter debt
500D
500.00
Enter down$ 5 ) d
5,000.00
Enter tax%
1•5s7
1.50
Enter ins.%
•25s8
0.25
Enter MI%
•6s9
0.60
Enter association
dues
50e
50.00
Enter interest 7 • 5 ˆ
7.50
Enter term
30T
30.00
Display ratios q
28.00 - 36.00
Find qualifying loan
amount
q
189,119.31
Find price
P
194,119.31
—DO NOT CLEAR CALCULATOR —
Find the monthly P&I payment and total
payment:
STEPS
KEYSTROKES
P&I payment p
PITI payment p
Total payment p
DISPLAY
1,322.35
1,700.00
1,750.00
POCKET REFERENCE GUIDE — 24
“Restricted” vs. “Unrestricted”
Qualifying
•
•
•
•
•
•
•
•
•
•
Buyer’s income: $68,000
Monthly debt: $750
Down$: $5,000
Property taxes: 1.5%
Property insurance: 0.25%
Mortgage insurance: 0.6%
Monthly association dues: $50
Term: 30 years
Interest: 7.5%
Qualifying ratios: 28%: 36%
Find the “Restricted” qualifying loan
amount, actual ratios, “Unrestricted” loan
amount and maximum allowable debt.
(Re-enter 0.6% mortgage insurance rate,
$50 association dues and $5,000 down.)
Note: If you are not continuing from the previous problem, you’ll need to re-enter interest,
term, tax/insurance.
STEPS
KEYSTROKES
DISPLAY
Clear
oo
Recall interest ® ˆ
Recall term
®T
Recall property
tax%
®7
0.00
7.50
30.00
1.50
(Cont’d)
POCKET REFERENCE GUIDE — 25
(Cont’d)
STEPS
KEYSTROKES
DISPLAY
Recall property
insurance% ® 8
0.25
Re-enter MI% • 6 s 9
0.60
Re-enter homeowner’s
dues
50e
50.00
Enter down
5)d
5,000.00
Enter income 6 8 ) i 68,000.00
Enter monthly
debt
750D
750.00
Display qualifying
ratios
q
28.00 - 36.00
Find “Restricted” qualifying loan
amount
q
137,725.41
— DO NOT CLEAR CALCULATOR —
(Cont’d)
POCKET REFERENCE GUIDE — 26
(Cont’d)
STEPS
KEYSTROKES
DISPLAY
Find actual ratios
q
22.76-36.00
Find “Unrestricted” loan
170,870.75 LA INC*
amount
q
Find maximum allowable monthly
debt
q
453.33
*Note: The “INC” tells you this unrestricted
Qualifying Loan Amount is based on the buyer’s
Income Ratio — therefore, the restricted
Qualifying Loan Amount is based on the buyer’s
Debt Ratio. This means that if they pay off their
monthly debt (to $453/month or lower) they may
qualify for a mortgage loan of approximately
$170,000 or more and afford a $175,000 home
(if they put approximately $4-$5K down).
POCKET REFERENCE GUIDE — 27
Qualifying Comparison
(2 Ratios at Once)
•
•
•
•
•
•
•
•
Buyer’s income: $55,000
Monthly debt: $500
Property taxes: 1.25%
Property insurance: 0.3%
Mortgage insurance: 0.45%
Monthly association dues: $50
Term: 30 years
Interest: 6.25%
Qualify this buyer based on both 28%:36%
and 29%:41% ratios:
STEPS
KEYSTROKES
DISPLAY
oo
0.00
income 5 5 ) i 55,000.00
debt
500D
500.00
tax%
1 • 2 5 s 7 1.25
insurance%
•3s8
0.30
Enter MI%
•45s9
0.45
Enter monthly association
dues
50e
50.00
Enter term
30T
30.00
Enter interest 6 • 2 5 ˆ
6.25
Display Qual 1
ratios
q
28.00-36.00
Clear
Enter
Enter
Enter
Enter
(Cont’d)
POCKET REFERENCE GUIDE — 28
(Cont’d)
STEPS
KEYSTROKES
DISPLAY
Find Qual 1 qualifying
loan
q
“run” 140,595.95
Find Qual 1 P&I
payment
p
865.67
Find Qual 1 PITI
Payment
p
1,100.00
Find total
payment
p
1,150.00
— DO NOT CLEAR CALCULATOR —
STEPS
KEYSTROKES
DISPLAY
Display Qual 2
ratios
Q
29.00-41.00
Find Qual 2 qualifying
loan
Q
“run” 163,496.04
Find Qual 2 P&I
payment
p
1,006.67
Find Qual 2 PITI
payment
p
1,279.17
Find total
payment
p
1,329.17
POCKET REFERENCE GUIDE — 29
Income Required and Allowable
Monthly Debt
•
•
•
•
•
•
•
Sales price: $300,000
Down%: 20%
Property taxes: 1.5%
Property insurance: 0.25%
Mortgage insurance: 0%
Term: 30 years
Interest: 5.88%
Find the income required to finance a
$300,000 home and the maximum allowable debt.
Note: Clear mortgage insurance rate to zero, as
the down payment is 20%.
STEPS
KEYSTROKES
DISPLAY
oo
0.00
interest 5 • 8 8 ˆ
5.88
term
30T
30.00
tax%
1•5s7
1.50
insurance%
•25s8
0.25
Clear MI%
0s9
0.00
Enter price
300)P
300,000.00
Enter down% 2 0 d
20.00
Find down$
d
60,000.00
Clear
Enter
Enter
Enter
Enter
(Cont’d)
POCKET REFERENCE GUIDE — 30
(Cont’d)
STEPS
KEYSTROKES
DISPLAY
Find loan
l
240,000.00
Display qualifying
ratios
q
28.00 - 36.00
Find income
required
q
79,626.76
Find maximum allowable monthly
debt
q
530.85
Find P&I
payment
p
1,420.46
Find PITI
payment
p
1,857.96
POCKET REFERENCE GUIDE — 31
80:10:10 Combo Loan vs. Fixed-Rate
Loan with Mortgage Insurance
Compare an 80:10:10 Combo Loan vs. a
Fixed-Rate loan w/mortgage insurance.
The loan parameters are:
FIXED
w/PMI
COMBO
(1st/2nd)
Loan
Interest
250,000
6.50%
Term
30
PMI
LTV
0.62%
95%
250,000
6.00% –
8.50%
30 year–
15 year
-80% –
10%
STEPS
KEYSTROKES
DISPLAY
1. Enter Fixed-Rate Loan Values and
Find Total Payment:
Clear
oo
0.00
Enter loan 2 5 0 ) l
250,000.00
Enter
interest
6•5ˆ
6.50
Enter term 3 0 T
30.00
Enter MI% • 6 2 s 9
0.62
(Cont’d)
POCKET REFERENCE GUIDE — 32
(Cont’d)
STEPS
KEYSTROKES
Clear Tax
0s7
Clear
Insurance 0 s 8
Solve for
payment p
Solve for PITI (including
PMI)
p
DISPLAY
0.00
0.00
1,580.17
1,709.34
2. Enter Combo Loan Values:
Enter 1st TD Interest
and Term 6 : 3 0 !
6.00-30.00
Enter 2nd TD Interest
and Term 8 • 5 : 1 5 s
!
8.50-15.00
3. Find Combo Loan Values:
Find blended interest rate for
1st/2nd TD *
6.18
Find equivalent interest rate for
fixed-rate loan with mortgage
insurance *
7.27
Find 1st/2nd TD combined monthly
payment *
1,605.87
(Cont’d)
POCKET REFERENCE GUIDE — 33
(Cont’d)
STEPS
KEYSTROKES
DISPLAY
Find equivalent payment for
fixed-rate loan with mortgage
insurance *
1,709.34
Display monthly savings over
fixed-rate loan with mortgage
insurance *
103.46
Display adjusted 2nd term
(if savings applied to
2nd TD)
*
8.71
Find 1st TD loan
amount
*
222,222.22
Find 2nd TD loan
amount
*
27,777.78
Find 1st TD
payment *
1,332.33
Find 2nd TD
payment *
273.54
Redisplay
LTV
*
80.00-10.00
*Use s * for 80:15:5 loans. See Large
User’s Guide for entering other LTV Combo
loans.
POCKET REFERENCE GUIDE — 34
Cash Flow
A real estate investor wishes to purchase
a home for $225,000 and rent it out. He’d
like a return of 9% and expects to sell it
after 5 years for $275,000. He expects
the annual cash flows below. Find the
IRR, NPV & NFV.
Year
Year
Year
Year
Year
STEPS
1
2
3
4
5
Annual Cash Flow
$16,000
$16,600
$16,900
$17,200
$275,000
KEYSTROKES
DISPLAY
Clear CF
s6
0.00
Set 1 payment
per year
1s÷
1.00
Enter initial investment as
cash outlay 2 2 5 ) s – c
C-0 -225,000.00
Enter 1st CF 1 6 0 0 0 c
C-1 16,000.00
Enter 2nd CF 1 6 6 0 0 c
C-2 16,600.00
(Cont’d)
POCKET REFERENCE GUIDE — 35
(Cont’d)
STEPS
KEYSTROKES
DISPLAY
Enter 3rd CF 1 6 9 0 0 c
C-3 16,900.00
Enter 4th CF 1 7 2 0 0 c
C-4 17,200.00
Enter last CF 2 7 5 ) c
C-5 275,000.00
Find IRR
R
9.83%
Enter desired rate of return and
find NPV
9sR
7,616.73
Find NFV
R
11,719.29
Re-display desired rate
of return
R
9.00%
Clear registers s x
0.00
Analysis: The investment is attractive, as
the IRR is greater than the desired rate of
return.
Note: See Large User’s Guide for more examples.
POCKET REFERENCE GUIDE — 36
APPENDIX
Default Settings
• 12 Periods per Year
• End Mode
• Property Tax/Insurance =
Clears Upon O
• Mortgage Insurance =
Clears upon o o
• Month Offset of January (1)
• Two Fixed Decimal Places
• Amortization Range =
Specified Year (Ent-Ent)
• Qual 1 Ratios = 28%-36%
• Qual 2 Ratios = 29%-41%
• Qualifying Ratios Displayed 1st
Decimal Place Setting
To set the number of decimal places
displayed:
s
s
s
s
s
s
s
5
4
3
2
1
0
•
0.00000
0.0000
0.000
0.00
0.0
0.
floating point
POCKET REFERENCE GUIDE — 37
Preference Settings
To access the Preference Mode, press
s, then =, then keep pressing = to
toggle through the preference settings listed. Press the + key to advance through
the sub-settings. Use the – key to back
up within the sub-settings. See Large
User’s Guide for details.
Batteries
Replacing the Batteries: Slide open and
remove the battery door (located on upper
backside of calculator). Remove the old
batteries. Insert two new LR44 button-cell
batteries, making sure they’re facing positive-side (+) up. Close the battery door.
Reset
You may at times want to reset your calculator to its factory settings (i.e., reset all
registers and Preference Settings to their
original default values). To do this, turn off
the calculator, hold down the x key, and
then turn it back on.
POCKET REFERENCE GUIDE — 38
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