Calculated Industries 3442 User manual

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User’s Guide

Model 3442

Desktop Model 43442

MORTGAGE FINANCE CALCULATOR

The

M

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UALIFIER

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was custom-designed for mort-

gage lenders and residential real estate pros. With the push of a few

buttons, it will pre-qualify prospective buyers instantly and solve hun-

dreds of mortgage loan problems, including

Pick-A-Payment ARMS

and Combo Loans!

Features:

• Easy and Complete Buyer Qualifying

• Interest-Only Qualifying

• Find Qualifying Loan Amount, Income Required and Maximum

Allowable Debt

• Use 2 Qualifying Ratios at Once to Compare Different Loans

(e.g., conventional vs. FHA/VA loans)

• Instant P&I, PITI, Total Payment, and Interest-Only Payment

• Expanded Tax and Insurance Capabilities

• Built-in Sales Price, Down Payment & LTV

• Works in Annual Term and Interest

• Flexible, “What If” Loan or TVM Calculations — Finds Loan

Amount, Term, Interest or Payment

• Rent vs. Buy

• Estimated Income Tax Savings, Mortgage Interest Deduction

• Date Math, Odd-Days Interest (ODI), Month Offset

• Equity Builder Loans with Comparative Savings

• APR and Total Finance Charges, including Mortgage Insurance

• Complete Amortization

• Remaining Balances/Balloon Payments

• Trust Deeds

• Future Value and Appreciation

• Also Works as a Standard Math Calculator

Pick-A-Payment and Combo (1st/2nd TD) mortgage calculations:

• Pick-A-Payment

• Equity Builder Pick-A-Payment

• Fixed “Combo” Loans

• Pick-A-Payment/Equity Builder Combo Loans

• Loan Savings/Investment Comparisons

Introducing the M

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Mortgage Finance Calculator

GETTING STARTED..........................................................................1

KEY DEFINITIONS.........................................................................1

Basic Operation Keys....................................................................1

Mortgage Loan (TVM) Keys ..........................................................2

Tax Savings Keys..........................................................................5

Rent vs. Buy Keys.........................................................................6

Qualifying Keys..............................................................................6

Tax, Insurance and Expense Keys................................................9

Pick-A-Payment and Equity Builder Pick-A-Payment Loan Keys...10

Combo Loan Keys.......................................................................13

Pick-A-Payment and Equity Builder Pick-A-Payment

Combo Loan Keys.....................................................................15

BASIC ARITHMETIC EXAMPLES...............................................16

Arithmetic.....................................................................................16

Percentage Calculations..............................................................16

Figuring Straight % Commission.................................................16

Reduction in Listing Price (Discount %)......................................17

Simple, One-Year Home Appreciation (Add-on %) .....................17

CALCULATOR SETTINGS...........................................................17

Decimal Place Selection..............................................................17

Preference Settings.....................................................................18

MEMORY ......................................................................................21

Memory Storage Keys (M0-M5) ..................................................22

Additional Memory Storage Keys (M10-M19) .............................23

EXAMPLES......................................................................................23

MORTGAGE LOANS/TIME-VALUE-OF-MONEY (TVM).............23

Finding the Monthly Loan Payment.............................................24

Finding the Interest-Only Payment..............................................25

Finding the Term of a Loan..........................................................25

Paying Off a Loan Early (Making Larger Payments)...................25

Finding the Interest Rate.............................................................26

Finding the Loan Amount ............................................................26

Finding the Loan Amount (with Interest-Only Payment)..............26

Non-Monthly Loans .....................................................................27

Finding a Quarterly Payment.......................................................27

Sales Price/Down Payment.........................................................28

Finding Loan Amount Based on Sales Price and

Down Payment..........................................................................28

Finding Sales Price and Payment Based on Loan Amount and

Down Payment..........................................................................28

TABLE OF CONTENTS

Finding Loan-to-Value (LTV) Based on Down Payment and

Sales Price ................................................................................29

Entering Loan-to-Value (LTV) and Finding Loan and

Down Payment..........................................................................29

Taxes and Insurance ...................................................................30

Setting Tax and Insurance % Rates............................................30

Recalling Tax and Insurance % Rates.........................................31

Setting Tax and Insurance $........................................................31

Calculating Tax and Insurance % or $.........................................31

PITI Payment (Tax and Insurance Entered as %).......................32

PITI Payment (Tax and Insurance Entered as $)........................33

Total Payment and Interest-Only Payment..................................33

Estimated Income Tax Savings and “After-Tax” Payment...........34

Rent vs. Buy................................................................................35

APR and Total Finance Charges.................................................36

Finding APR, Total Finance Charges (Excluding Mortgage

Insurance)..................................................................................36

Finding APR, Total Finance Charges (Including Mortgage

Insurance)..................................................................................37

Date Examples ............................................................................38

Finding Odd-Days Interest and APR...........................................38

Equity Builder Loans....................................................................39

Equity Builder Term Reduction and Payment..............................40

Equity Builder Interest Savings - Based on Adjusted

Equity Builder Payment.............................................................40

Amortization and Remaining Balance .........................................41

Notes on Amortization .................................................................41

Total Principal/Total Interest for a 30-Year Loan..........................42

Amortization List for Individual Year(s) —

Using “Next” Feature

....43

Amortization List for Individual Year(s) —

Using Month Offset

......44

Amortization List for Individual Payment(s).................................45

Amortization List for a Range of Payments or Years ..................46

Balloon Payment/Remaining Balance Needed to Pay Off a Loan

...46

Mortgage Interest Tax Savings —

21% or 30% Tax Bracket

...........47

Future Value ................................................................................48

Appreciation.................................................................................48

Basic Savings Account Problem

(Future Value of an Initial Deposit or Lump Sum).....................48

Investment Future Value..............................................................48

Retirement Annuity......................................................................49

Begin/End Interest Mode.............................................................49

Trust Deeds and Discounted Notes.............................................50

Purchase Price of a Note —

Fully Amortized

.................................50

Finding the Yield on a Discounted Note......................................50

Finding the Value and Discount of a Trust Deed.........................51

BUYER QUALIFYING...................................................................52

QUALIFYING EXAMPLES ...........................................................53

Recalling Income/Debt Qualifying Ratios....................................53

Storing New Income/Debt Qualifying Ratios...............................54

Finding Qualifying Loan Amount and Sales Price

(Simple Example Excluding Tax/Insurance)..............................54

Qualifying Loan Amount and Sales Price (Complete Example

Including Down Payment, Tax/Insurance, Monthly

Association Dues)......................................................................55

“Restricted” Qualifying.................................................................56

“Unrestricted” Qualifying..............................................................57

Qualifying Comparison (Comparing 2 Different Loans or

Ratios at Once) .........................................................................58

Finding Income Required and Allowable Monthly Debt...............59

Solving for Actual Qualifying Ratios ............................................60

PICK-A-PAYMENT AND COMBO LOANS ..................................61

Pick-A-Payment Loan (Zero-Month/30-Term) vs.

Standard Fixed-Rate Loan —

Entering Starting Payment

.............62

Pick-A-Payment Loan (Zero-Month/30-Term) vs.

Standard Fixed-Rate Loan —

Entering a Starting Interest Rate %,

Changing ROI% and Payment Cap%; Solving Payment Options

.........65

Equity Builder Pick-A-Payment Loan (Zero-Month/30-Term) vs.

Standard Fixed-Rate Loan........................................................68

Pick-A-Payment Loan (3-Month/30-Term) vs.

Standard Fixed-Rate Loan —

Finding P-A-P Savings for the First

Three Years (Versus the First Five Years)

.........................................70

Fixed-Rate Combo Loan (1st TD/2nd TD) ..................................72

Combo Loan vs. Fixed-Rate Loan with MI..................................73

Combo Loan —

Storing a New LTV

................................................74

Pick-A-Payment (3-Month/30-Term) Combo Loan vs.

Fixed-Rate Loan w/MI...............................................................76

Equity Builder Pick-A-Payment (3-Month/30-Term)

Combo Loan vs. Fixed-Rate Loan w/MI....................................78

APPENDIX .......................................................................................80

Default Settings ...........................................................................80

Error Codes .................................................................................80

Auto Shut-Off...............................................................................81

Batteries.......................................................................................81

Reset ...........................................................................................82

Repair and Return.......................................................................82

Warranty ......................................................................................83

Legal Notes .................................................................................84

Looking For New Ideas ...............................................................84

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KEY DEFINITIONS

Basic Operation Keys

O Turns all power off. The memory and most financial

registers are cleared.

o If off, turns power on. If on, a single press clears the

last entry while a second press in succession clears

all non-permanent registers.*

*Clears Loan Amount, Payment, Price, Down Payment, Income,

Debt, Expense, and Mortgage Insurance/MI (unless MI is set to

hold; see Preference Settings).

+ – x Arithmetic operation keys.

÷ =

0 – 9 Digits used for keying in numbers.

) Triple-zero key (saves time when entering 000 values).

• Decimal point.

%

Percent

— Four-function (+, –, x, ÷) percent key.

See page 20 for examples.

µ

Memory

— Adds the displayed number to the inde-

pendent memory. Pressing s µ

(M-)

will sub-

tract the displayed value from the memory. Pressing

® µ recalls and displays the memory contents.

Pressing ® ® clears the memory. (See Memory

section for details.)

®

Recall

— Recalls and displays the contents of the

financial registers (e.g., ® ˆ). Also used for

Memory functions.

s Works with other keys to set or activate additional

second functions (it will perform the function printed

above the key on the calculator’s face). Also used

to set the number of displayed decimal places (see

section on Decimal Place Selection).

s –

Change Sign

(+/–) — Changes the sign of the dis-

played value from positive to negative or vice-versa.

GETTING STARTED

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s x

Clear All

— Clears all entered values and returns all

storable values to the default settings. Use this only

with caution, as it will reset ratios, payments per

year, etc. back to their defaults (see the Appendix

for a list of these settings).

Note: Clear All will not affect any changes made to Preference

Settings.

s =

Preferences (Prefs)

— Activates the Preference

Mode, where you can select custom settings (see

Preference Settings).

Mortgage Loan (TVM) Keys

The following keys let you solve time-value-of-money (TVM) prob-

lems, such as finding a loan payment, term, interest or future value,

amortization or Equity Builder loans. Other useful keys, such as

Price and Down Payment, are also included. These mortgage loan

keys let you demonstrate various “What-if” loan scenarios to your

clients.

l

Loan Amount

— Enters or solves for the initial loan

amount or present value of a financial problem.

p

P&I, PITI Payment, Total Payment, Interest-Only

Payment

— Enters or solves for the periodic princi-

pal and interest (P&I) payment. Pressing p a sec-

ond time in succession calculates the PITI payment

(P&I plus property tax, property insurance and mort-

gage insurance, if entered). The third press of p

computes the total payment (PITI plus any entered

expenses such as homeowner’s association dues

and other housing expenses). The fourth press cal-

culates the interest-only payment.

T Enters or solves for the number of years. Second

press gives the number of periods. You may enter a

periodic term, if you prefer, by pressing the π key

(e.g., 3 6 π T instead of 3 T). An entered

term greater than 100 will be classified as periodic,

not annual.

Note: Stored permanently, until you change it.

ˆ

Interest

— Enters or solves for the annual interest

rate. Second press gives the periodic rate.

Note: Stored permanently, until you change it.

s l

Future Value (FV)

— Enters or solves for the future

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value of a financial problem.

s +

Investment Future Value

— Functions the same as

Future Value, but compounds interest at the begin-

ning of the period rather than the end.

P

Sales Price

— Enters or calculates Sales Price

based on the entries of Loan Amount (or equivalent

mortgage components) and Down Payment.

d

Down Payment

— Enters (in either percent or dollars)

or calculates Down Payment, based on the entries

of Loan Amount (or equivalent mortgage compo-

nents) and Sales Price. A second press changes the

entered down payment from a dollar figure to a per-

cent, or vice versa.

Note: Any number under 100 is assumed to be a percent down

payment.

s d

Loan-to-Value (LTV)

— Calculates the loan-to-value

percent when a Down Payment and Sales Price,

Loan Amount and Down Payment, or Loan Amount

and Sales Price are entered. Also calculates the

above dollar values if an LTV percent and one of the

above values are entered (cannot calculate loan

amount or price based on entered LTV and Down

Payment). Also used in Combo Loan problems for

comparing to a straight first with mortgage insurance.

(Default: 80.00%-10.00%)

Note: Stored permanently, until you change it.

s ˆ

Annual Percentage Rate (APR)

— Calculates APR

(for fixed-rate loans only) based on the entry of points

and/or non-recurring loan fees paid at initiation. It

also calculates finance charges, amount financed,

total amount financed (finance charges + amount),

P&I payment, monthly mortgage insurance (MI) and

the P&I with MI payment (PIMI),

based on the entry

of mortgage insurance

via the s 9 keys.

π

Periodic

— Used to specify a term, interest,

income, amortization, or remaining balance value as

periodic

rather than

annual

. Periods are determined

by the payments per year setting. For example,

3 6 π T enters 36 periods, or months.

s π

Interest-Only Payment

— Enters or calculates the

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interest-only payment. This is also calculated via the

fourth press of the p key.

s ÷

Payments per Year (Pmt/Yr)

— Used to set the

number of payment periods per year. Default value

is 12, for monthly.

Note: You can store the number of payments per year permanently

or semi-permanently. See “Preference Settings”.

a

Amortization (Amort)

— Finds total interest, princi-

pal, remaining balance, remaining term, and estimat-

ed mortgage interest tax deduction.

The output of this key is as follows:

Press Display or Calculation

1 Enters or displays range of periods

2 Calculates total interest for period range

3 Displays total principal for range

4 Calculates total principal and interest

5 Calculates remaining balance

6 Calculates remaining term

7 Calculates estimated mortgage interest tax

deduction for the specified period, based on

the default tax bracket of 21%*

*You may enter any tax bracket (e.g., 30%, press

3 0 s p

and recalculate amortization values).

Note: This is only for estimating a mortgage interest tax deduction

it does not include property tax. See “Tax Savings” keys for

income tax savings including property tax and mortgage interest.

s a

Remaining Balance (Rem Bal)

— Displays the

remaining balance when preceded by a single year

or range of years (or individual payment or range of

payments by also using the π key). Note that you

can also see the remaining balance with continuous

presses of the a key.

:

Colon Separator (Date)

— Used as a separator for

entering dates, qualifying ratios, Combo loan (1st/2nd)

interest and terms, and for entering amortization ranges.

s )

Month Offset (Mo Offset)

— Used to set the first

month of payment if other than January.

s :

Odd-Days Interest

— Calculates the pre-paid inter-

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est, or simple interest accumulated (based on a

360-day year) during the days before the first loan

payment is made using the interest rate stored in

the Interest register.

s T

Equity Builder

— Converts a regular monthly loan

to an Equity Builder loan, where the buyer may real-

ize significant interest savings. After loan variables

are entered, pressing s T displays the reduc-

tion in term. The second press of T displays the

total interest savings; third press displays the effec-

tive interest rate; the fourth press displays the total

interest paid; fifth press displays the total principal

paid; sixth press displays the total principal and

interest paid; and seventh press calculates the

Return on Investment (ROI%). Pressing p will cal-

culate the Equity Builder payment. Pressing s

T again will exit Equity Builder Mode and re-cal-

culate based on the original term.

Note: Your calculator is programmed to calculate special interest-

saving Equity Builder Pick-A-Payment loans. With the EB P-A-P,

each payment is directly applied to loan principal, or applied twice

a month – unlike other loan programs, which may apply the pay-

ments to principal only once a month, or at the end of the year.

This results in even lower interest costs than typical bi-weeklies,

as well as significant P-A-P loan investment savings.

Tax Savings Keys

s p

Estimated Tax Savings (Tax Svgs)

— Calculates

an estimated annual income tax savings for a mort-

gage, based on entered loan variables, including

property tax, mortgage interest, and tax bracket. You

must enter a tax bracket, then press s p p to

display the estimated annual tax savings; the third

consecutive press of p will display the monthly tax

savings, and the fourth press will display the estimated

“after-tax” mortgage payment, or net payment.

Note: This function is different from the mortgage interest deduc-

tion figured in the Amortization calculation, as it also includes

property tax for a total estimated tax savings and only provides

an annual estimate, not an estimate for a specified range (see the

a

key definition for details).

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Rent vs. Buy Keys

s P

Rent vs. Buy

— Calculates a comparable sales

price, loan amount and mortgage payment (versus

the cost of monthly rent). You must enter loan vari-

ables and a tax bracket via s p, then enter the

prospective buyer’s current rent and press s

P. Consecutive presses of P will calculate the

comparable sales price, loan amount, monthly loan

payment (including tax/insurance, if entered) and

estimated annual/monthly income tax savings, and

tax bracket.

s p

Tax Bracket (Tax Brkt%)

— Enters a buyer’s tax

bracket for figuring Rent vs. Buy calculations or for

calculating estimated mortgage interest tax deduc-

tion in the Amortization calculation. Press ® s

p to display stored percentage.

(Default=21%)

Qualifying Keys

q

(Qualify Based on 28%-36%)

— A multi-function

key which, based on entered variables, performs the

following qualifying functions:

1) Stores income and debt ratios for loan qualify-

ing. Entered ratios are separated by the Colon :

key. For example, income and debt ratios of 28%

and 36%, respectively, are entered and permanently

stored as follows: 2 8 : 3 6 q. Default

income and debt ratios for this key are 28% and

36%, respectively. You may change qualifying ratios,

as desired.

What are Qualifying Ratios?

The income ratio calculates the allowable percent-

age of income for the total housing payment, while

the debt ratio finds the allowable percentage of

income for the total housing payment plus long-term

debts (usually 12 months or longer). The

conserva-

tive

rule is that housing expenses should be 28% or

less of income, while

total

housing expense/debt

should be 36% or less of income.

(Cont’d)

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(Cont’d)

INCOME RATIO =

TOTAL HOUSING EXPENSE

GROSS MONTHLY INCOME

DEBT RATIO =

TOTAL HOUSING EXPENSE + MO. DEBT

GROSS MONTHLY INCOME

Note: Typically, when figuring government loans (FHA/VA), these

formulas also include estimated expenses for maintenance and

utilities (added to the Total Housing Expense for both ratios). Also,

real estate financing and qualifying varies per region and by

lender, who of course, take other factors into consideration, such

as a buyer’s credit and employment history.

2) Calculates the maximum loan amount for

which a buyer may qualify, based on the stored

income and debt qualifying ratios and the entered:

• term

• interest

• annual income

• monthly debt

—and optional—

• annual property tax and insurance

• annual mortgage insurance (MI)

• other monthly housing expenses

(e.g., homeowner’s association dues)

The output of this key is as follows:

Press Calculation

1 Displays stored Qualifying Ratios

(e.g., 28%:36%)

2 Maximum Qualifying Loan Amount

(restricted)

*

3 Buyer’s Actual Ratios (Income%:Debt%)

4 Qualifying Loan Amount

(unrestricted)

*

5 Maximum Allowable Debt

(Cont’d)

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(Cont’d)

*The Maximum Qualifying Loan Amount displayed is the “restricted”

loan amount that the buyer may qualify for. This loan amount is

based on whichever of the two ratios, income or debt, limits the

buyer the most. If the buyer’s maximum qualifying loan amount is

restricted by their debt, then the unrestricted qualifying loan amount

will also be displayed. The unrestricted qualifying loan amount is

based purely on the buyer’s income and is not restricted by their

debt. If the maximum qualifying loan amount is restricted by their

income, the unrestricted qualifying loan amount will not be

displayed. This is useful to show clients what size loan they could

qualify for if they paid off debt. Here, the calculator will display the

loan amount with “UNR” (for unrestricted) and “INC” to indicate that

it is based on income.

3) Calculates the annual income required and

allowable monthly debt for a desired loan amount

or sales price based on the stored income and debt

qualifying ratios and the entered:

• term

• interest

• price (down payment) or loan amount

4) Also finds buyer’s actual income and debt

ratios given both buyer and property data. By

default, the first press of q displays the stored

qualifying ratios and the 2nd press calculates the

buyer’s actual ratios.

s q

(Interest-Only Qualify Based on 28%-30%)

—

Preforms the same qualifying calculations as q,

but based on the Interest-only payment rather than

the fully amortized payment.

Q

(Qualify Based on 33%-40%)

— Stores additional

Income and Debt ratios (e.g., FHA/VA) and operates

identically to the q key. Default Income and Debt

ratios for this key are 33% and 40%, respectively.

Note: You can store whatever ratios you desire in the

q

or

Q

keys.

s Q

(Interest-Only Qualify Based on 33%-40%)

—

Preforms the same qualifying calculations as Q,

but based on the Interest-only payment rather than

the fully amortized payment.

i

Income

— Enters the buyer’s annual income for

loan qualifying. Enters a

monthly

income when pre-

ceded by the s key (e.g., 5 0 0 0 s i).

D Enters buyer’s long-term,

monthly

debt.

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Tax, Insurance and Expense Keys

In addition to Qualifying, the following keys are also involved in PITI

and Total Payment calculations (e.g., they are added to the monthly

payment):

s 7

Property Tax (Tax)

— Used for calculating the PITI

payment and for Qualifying. Stores estimated annual

property tax in either percent or dollar amount. If

entered as an annual dollar amount, a press of ®

and 7 converts to the monthly tax amount, and

pressing ® 7 again converts to the annual per-

centage rate. If entered as a percentage, pressing

® 7 converts to the annual dollar amount, and

pressing ® 7 once more shows the monthly tax.

Note: Entering a number equal to or less than 10 is assumed to

be an annual percentage. Property tax is calculated from the

sales price (therefore, you should also enter a Down Payment).

s 8

Property Insurance (Ins)

— Used for calculating

the PITI payment and for Qualifying. Stores estimated

annual property or homeowner’s insurance in either

percent or dollar amount. If entered as an annual

dollar amount, a press of ® and 8 converts to the

monthly insurance amount or premium, and press-

ing ® 8 again converts to the annual percentage

rate. If entered as a percentage, pressing ® 8

converts to the annual dollar amount, and pressing

® 8 once more shows the monthly insurance.

Note

: Entering a number equal to or less than 10 is assumed to

be an annual percentage. Property insurance is calculated from

the sales price (therefore, you should also enter a Down Payment),

unless changed in Preference Settings.

s 9

Mortgage Insurance (Mtg Ins)

— Used for calculat-

ing the PITI payment and for Qualifying. Stores esti-

mated annual mortgage insurance in either percent

or dollar amount. If entered as an annual dollar

amount, a press of ® and 9 converts to the

monthly mortgage insurance amount or premium,

and pressing ® 9 again converts to the annual

percentage rate. If entered as a percentage, press-

ing ® 9 converts to the annual dollar amount, and

pressing ® 9 once more shows the monthly

insurance.

(Cont’d)

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(Cont’d)

Note: Entering a number equal to or less than 10 is assumed to

be an annual percentage. Mortgage insurance is calculated from

the loan amount.

Note

: Tax and Insurance entered as dollar amounts will remain fixed,

even if sales price or loan amount is changed. However, if entered as

a percentage of sales price or loan amount, these items will automat-

ically be re-calculated if sales price or loan amount is changed.

s D

Expense (Exp)

— For Total Payment and Qualifying.

Enters monthly housing expense (e.g., homeowner’s

association dues, maintenance and utilities).

A

Expense (Desktop Model 43442 only)

— See pre-

vious definition for s D.

Pick-A-Payment and Equity Builder Pick-A-Payment Loan

Keys

These keys allow you to demonstrate the savings of P-A-P and

EB P-A-Ps, or below-market initial interest or low initial payment

loans, over regular fixed-rate loans.

Pick-A-Payment calculations use all the keys in the second row of

the calculator. When performing a P-A-P/EB P-A-P calculation, the

calculator will also compare the “fixed” loan values within the l,

p, T and ˆ registers.

The following defines the P-A-P/EB P-A-P specific keys:

S

Start Rate % or Start Payment

— Stores and dis-

plays the Start (Teaser) Rate or the Start Payment

for P-A-P and EB P-A-P loans. The Start specifies

what low rate or payment the loan will start at.

If a percentage or payment is entered, the second

press will calculate the respective dollar value or per-

centage value. Successive presses of S will toggle

between the starting percent and the dollar amount.

s S

Note %

— Stores and displays the actual rate, or the

Fully Indexed Rate (FIR) for P-A-P/EB P-A-P loans.

ß

Start Term

— Stores the length of time (in months)

that the P-A-P Start Rate is in effect. The Start # of

Months specifies how many months the payments

will be applied to principal & interest (fully amortized)

at the low rate, versus only being applied to the

interest (negative amortization).

(Default: 0 month)

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s ß

Pick-A-Payment Term

— Enters the P-A-P/EB P-A-P

term that is independent of the Standard T entry

for fixed-rate loans.

s 6

Annual Payment Cap % (Pmt Cap%)

— Stores the

annual percent cap for the P-A-P/EB P-A-P annual

payment adjustment, which is applied for the select-

ed Recast period.

(Default: 7.5%)

When the Recast period is achieved, then the com-

parison between the new payment (made for each

year) and the Cap Payment is no longer applied.

s %

Return on Investment (ROI%)

— Stores and dis-

plays the Return on Investment (ROI) percentage

used to compute the five-year (or less than 5-year, if

specified) investment savings for P-A-P/EB P-A-P

loans over fixed-rate loans.

(Default: 10%)

∏

Pick-A-Payment

— This type of mortgage starts out

with a low, below-market interest rate, or initial pay-

ment, as defined by S, during a short period (e.g.,

0, 1, 3, 6, 9, 12 or 36 months) of full amortization at

the initial low rate, as defined by ß. After the Start

Period, the payments are applied to interest only

(deferred interest) at the Note % and begin to

increase, restricted by the specified Annual Payment

Cap%, until the Recast Term (e.g., 5, 10 years) is

reached. After the Recast Period, the loan is recal-

culated based on the remaining balance, Note%,

and remaining P-A-P term and the payment stays

fixed for the remainder of the term (e.g., if recast

period is 10, at the end of 10 yrs, it is recast based

on Note% and remaining P-A-P Term).

Note: With the Zero-month P-A-P, the interest starts compounding

at the full Note rate immediately (there is no waiting period).

However, the initial payment is still extremely low.

(Cont’d)

12 — M

ORTGAGE

Q

UALIFIER

P

LUS

®

P

X2

(Cont’d)

The typical output of this key is as follows:

Press Calculation

1-5 P-A-P Payments (Years 1-5)*

6 Range for P-A-P Savings and ROI%

Savings Range**

7 P-A-P Savings (vs. fixed-rate loan or

P-A-P Note%

8 Stored ROI% (Default 10%)

9 ROI% Savings (based on default of 10%, or

input of ROI%)

10 Range of P-A-P Amortization

11 P-A-P Total Principal and Interest

12 P-A-P Total Interest Paid

13 P-A-P Loan Balance at End of Range

*Unless “1.00”, “none” or “ALL” payment cutoff is

selected via the Preference Settings.

**Based on default years 1-5, or an entered number

of years less than 5.

Note: The actual number of payments displayed will depend upon

the type of P-A-P loan, the payment cap, and the difference

between starting and fully indexed interest rates.

The P-A-P Savings is calculated using the difference

between the P-A-P payments and the fixed-rate loan

payments (p). If no fixed-rate loan is entered, the

calculator will use the P-A-P Note rate for the loan

comparison. ROI is not applied to this value, thus

providing the P-A-P Savings, also known as the

“raw” savings. The Return on Investment (ROI) is

based on the stored ROI% (default is 10%, but any

ROI% can be entered). You may want to enter sev-

eral different ROI%’s to compare different savings

scenarios (see the first P-A-P example).

The P-A-P Savings and the Return on Investment

(ROI) for a P-A-P/EB P-A-P are calculated for the

first five years, unless a number less than five is

entered. For example, entering 2 ∏ will

(Cont’d)

U

SER

’

S

G

UIDE

— 13

(Cont’d)

calculate the P-A-P Savings and ROI for the first two

years. Calculating the P-A-P (or EB P-A-P) with an

entered number greater than five years will still cal-

culate the P-A-P Savings and ROI for years 1-5;

however, the P-A-P loan will be amortized based

upon the range entered (i.e., 7 ∏ will calculate

P-A-P Savings and Investment Savings w/ROI for

years 1-5, and the Amortized values will be calculat-

ed for years 1-7).

e

Equity Builder Pick-A-Payment Adjustable Rate

Mortgage

— Operates identically to the regular

P-A-P key, except it’s based on 26 payments per

year instead of 12.

s ∏

Payment Options

— Displays the P-A-P Start pay-

ment (1st year only), the interest-only payment

(based on Note Rate), 30-year payment (based on

Note Rate), 15-year payment (based on Note Rate),

and P-A-P deferred interest payment.

s e

Payment Options

— Same values as above, but

for the Equity Builder Pick-A-Payment loan.

Combo Loan Keys

The Combo Loan keys show the savings of obtaining a 2nd Trust

Deed (TD) loan over a single, fixed-rate loan where mortgage insur-

ance (MI) is required.

This routine requires a fixed-rate loan to be entered using the stan-

dard l, p, ˆ and/or T keys so that a loan comparison can

be made.

s d

Loan-to-Value Combo Loan (LTV 1st:2nd)

—

Stores the Loan-to-Value (LTV) ratio for the 1st and

2nd TD loans using the : key. The stored values are

a percentage of the sales price (e.g., 8 0 : 1 0

identifies that 80% of the price is covered by the 1st

TD, 10% of the price is covered by the 2nd TD and

the remaining 10% is covered by the down pay-

ment). Both values need to be entered for a valid

entry. Values will be retained until changed or reset.

(Default: 80.00-10.00)

14 — M

ORTGAGE

Q

UALIFIER

P

LUS

®

P

X2

!

1st TD Interest:Term

— Stores the annual interest

and term for the fixed-rate 1st TD. These values are

used when calculating the 1st:2nd fixed Combo

Loan. Entry is made using the : key (separating

interest and term). Both interest and term values are

required for a valid entry. Values will be retained

until changed or reset.

s !

2nd TD Interest:Term

— Stores the annual interest

and term for the fixed-rate 2nd TD. These values are

used when calculating the 1st:2nd fixed Combo and

P-A-P/EB P-A-P Combo Loans. Entry is made using

the : key (separating interest and term). Both inter-

est and term values are required for a valid entry.

Values will be retained until changed or reset.

C

2nd TD Interest:Term (Desktop model 43442

Only)

— See previous definition for s !.

s 5

Fixed-Rate Combo (1st & 2nd Trust Deed) Loan

—

When s 5 is selected and all other variables are

entered, the calculator will display the following:

Press Calculation

1 Combo Loan Blended Interest Rate

*2 Equivalent Interest Rate (for Fixed-Rate

Loan with MI)

3 Combo Loan Total (1st/2nd TD) Payment

*4 Equivalent P&I Payment (for Fixed-Rate

Loan with MI)

*5 Monthly Savings over Fixed-Rate Loan w/MI

*6 Adjusted 2nd Term (if Savings Applied to

2nd Trust Deed Loan)

7 1st Trust Deed Loan Amount

8 2nd Trust Deed Loan Amount

9 1st Trust Deed Loan Payment

10 2nd Trust Deed Loan Payment

11 LTV Ratio

*If no comparison loan values are entered, these solutions are

not displayed.

BF

Fixed-Rate Combo (Desktop model 43442 Only)

—

See previous definition for s 5.

U

SER

’

S

G

UIDE

— 15

s 4

Interest-Only 2nd Trust Deed Combo

— Operates

similarly to the Fixed-Rate Combo Loan function, but

for a combo loan where the 2nd Trust Deed is

Interest-Only (the 1st Trust Deed is a standard fixed-

rate P&I loan).

s

B

Interest-Only 2nd Trust Deed Combo (Desktop

model 43442 Only)

— See previous definition for

s 4.

Pick-A-Payment and Equity Builder Pick-A-Payment

Combo Loan Keys

This calculator also has the capability of using a P-A-P or EB P-A-P

loan as the 1st Note in a Combo Loan. These keys are again used

to compare P-A-P/EB P-A-P Combo Loans against a standard,

fixed-rate loan requiring monthly private mortgage insurance (MI).

N

P-A-P Combo Loan

— This function will solve for a

Combo Loan using the P-A-P as the 1st Trust Deed.

The calculations displayed are listed below:

Output Calculation

1-5 1st TD P-A-P Payments (1-5)

6 1st TD Loan Amount

7-10 1st TD (P-A-P) Total Principal and Interest,

Total Interest, and Remaining Balance

11 2nd TD Loan Amount

12 2nd TD Fixed Payment

13-15 2nd TD (Fixed) Total Principal and Interest,

Total Interest, and Remaining Balance

16 Adjusted 2nd TD Term (if savings applied to

2nd TD)

s N

EB P-A-P Combo Loan

— Operates identically to

the above, as a 2nd function of the N key, but

uses a bi-weekly P-A-P (EB P-A-P) Loan as the 1st

Trust Deed.

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