Calculated Industries 3430 Reference Guide

QUALIFIER PLUS®IIIFX

ADVANCED REAL ESTATE FINANCE

CALCULATOR with CASH FLOW

and COMPLETE BUYER QUALIFYING

Model 3430

Pocket Reference Guide

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

QUALIFIER PLUS®IIIFX

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

TABLE OF CONTENTS

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

P

OCKET REFERENCE GUIDE — 1

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 back-

ing 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

KEY DEFINITIONS

P

OCKET REFERENCE GUIDE — 2

s Sets number of displayed

decimal places and acti­vates 2nd functions

s – Change sign
s x 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)

s b Periodic (sets per Period

rather than per Year)

s ) Month offset
s : Odd-days interest
s + Tax bracket %
s p Estimated income tax sav-

ings/after-tax payment

s P Rent vs. Buy
l Loan amount
p P&I, PITI, total payment,

and interest-only payment

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OCKET REFERENCE GUIDE — 3

T Number of years
ˆ Annual interest rate or

cash flow desired rate of
return

s l Future value
s ˆ APR (annual percentage

rate), including mortgage
insurance, if entered

P Property price
d Down payment
s T Bi-Weekly loan
a Amortization function
s a Remaining balance
A Adjustable-rate mortgage
s A ARM decreasing interest

% adjustment

s % ARM lifetime interest cap%
q Qualify based on

28%-36%

Q Qualify based on

29%-41%

i Annual income

P

OCKET REFERENCE GUIDE — 4

D Long-term, monthly debt

(e.g., car payment)

s 7 Property tax (enter as per-

cent or dollar amount)

s 8 Property/homeowner’s

insurance (enter as per­cent or dollar amount)

s 9 Mortgage insurance (enter

as percent or dollar amount)

e Monthly expenses (such

as homeowner’s associa­tion dues)

s d 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

P

OCKET REFERENCE GUIDE — 5

* 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

s c Frequency — labels a cash

flow that is consecutively
repeating

P

OCKET REFERENCE GUIDE — 6

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)

s 6 Clear cash flows

P

OCKET REFERENCE GUIDE — 7

Date Example

If a 45-day escrow begins June 15 2004,
what is the closing date and day?

STEPS KEYSTROKES DISPLAY

Clear o o 0.00
Enter month 6 : 6-
Enter day 1 5 : 6-15-
Enter year 0 4 6-15-04
Add 45 days + 4 5 = FRI 07-30-04

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

Clear o o 0.00
Enter loan 2 6 5 ) l

265,000.00

Enter term 3 0 T 30.00
Enter interest 6 • 7 5 ˆ 6.75
Find P&I

payment p 1,718.78

EXAMPLES

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OCKET REFERENCE GUIDE — 8

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 o o 0.00
Enter interest 6 • 5 ˆ 6.50
Enter term 3 0 T 30.00
Enter payment 1 5 0 0 p 1,500.00
Find loan l 237,316.23
Enter new interest

rate 6 ˆ 6.00

Find new loan

amount l 250,187.42

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OCKET REFERENCE GUIDE — 9

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

Clear o o 0.00
Enter price 3 7 5 5 0 0 P

375,500.00

Enter down% 2 0 d* 20.00
Find down$ d 75,100.00
Find loan l 300,400.00

*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

Clear o o 0.00
Enter loan 9 8 5 0 0 l

98,500.00

Enter term 3 0 T 30.00
Enter payment 1 1 5 0 p 1,150.00
Find annual

interest ˆ 13.78

Find periodic

interest ˆ 1.15

P

OCKET REFERENCE GUIDE — 10

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 o o 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

P

OCKET REFERENCE GUIDE — 11

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 1.50
Enter insurance%*

• 2 5 s 8 0.25

Enter mortgage

insurance%* • 5 0 s 9 0.50

*Note: Do not label as a percent, or use the %
key; it is automatically registered as a percent.

T

o 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.

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OCKET REFERENCE GUIDE — 12

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

Clear o o 0.00
Enter term 3 0 T 30.00
Enter interest 6 • 2 5 ˆ 6.25
Enter price 3 2 5 ) P

325,000.00

Enter Down% 5 d 5.00
Enter tax% 1 • 3 s 7 1.30
Enter insurance%

• 2 5 s 8 0.25

Enter MI% • 4 5 s 9 0.45
Find loan l 308,750.00
Find P&I

payment p “run” 1,901.03

Find PITI

payment p 2,436.60

— DO NOT CLEAR CALCULATOR —

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OCKET REFERENCE GUIDE — 13

Find the total payment, if you estimate
homeowner’s association fees at $80/month.
Also find the interest-only payment:

STEPS KEYSTROKES DISPLAY

Enter expenses

8 0 e 80.00

Find total

payment p p p 2,516.60

Find interest-only

payment p 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 o o 0.00
Set to 4 payments

per year 4 s ÷ 4.00
Enter loan 1 5 ) l 15,000.00
Enter term 1 0 T 10.00
Enter interest 1 2 ˆ 12.00
Find quarterly P&I

payment p 648.94
Return to 12 payments

per year 1 2 s ÷ 12.00

P

OCKET REFERENCE GUIDE — 14

Amortization

• Loan: $300,000

• Term: 30 years

• Interest: 7.5%

Find total interest and principal for the life
of the loan:

STEPS KEYSTROKES DISPLAY

Clear o o 0.00
Enter loan 3 0 0 ) l

300,000.00

Enter interest 7 • 5 ˆ 7.50
Enter term 3 0 T 30.00
Find P&I pmt p 2,097.64
Find # pmts a 1-360
Find total int. a 455,151.67
Find total prin. a 300,000.00
Find total pmts

a 755,151.67

Find all values for the first year:

Enter Year 1 1 a 1-12
Find total int. a 22,406.22
Find total prin. a 2,765.50
Find total pmts

a 25,171.72

Find balance a 297,234.50
Rem. term a 29.00
Tax deduct. a 6,273.74

Note: Based on default 28% tax bracket and
loan starting in January. To change these val­ues, see Large User’s Guide.

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OCKET REFERENCE GUIDE — 15

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

Clear o o 0.00
Enter loan 2 1 2 5 0 0 l

212,500.00

Enter term 3 0 T 30.00
Enter interest 7 • 8 5 ˆ 7.85
Find payment p 1,537.09
Find Bi-Weekly

term s T 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

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OCKET REFERENCE GUIDE — 16

Appreciation

What will a $350,000 home be worth in 3
years, figuring an inflation or appreciation
rate of 6%?

STEPS KEYSTROKES DISPLAY

Clear o o 0.00
Set to 1 payment

per year 1 s ÷ 1.00
Enter present

value 3 5 0 ) l

350,000.00

Enter term 3 T 3.00
Enter appreciation

rate 6 ˆ 6.00
Find future value

(FV) s l 416,855.60
Reset payments

per year 1 2 s ÷ 12.00

P

OCKET REFERENCE GUIDE — 17

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 o o 0.00
Recall payments

per year ® ÷ 12.00
Enter deposit 1 0 ) l 10,000.00
Enter term 3 0 T 30.00
Enter interest 7 ˆ 7.00
Find FV s l 81,164.97
Add to M+ μ M 81,164.97
Clear o o 0.00
Enter payment 2 5 0 p 250.00
Find FV s l -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).

P

OCKET REFERENCE GUIDE — 18

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

Clear o o 0.00
Enter loan 2 5 0 ) l

250,000.00

Enter term 3 0 T 30.00
Enter interest 7 ˆ 7.00
Find P&I pmt p 1,663.26
Enter MI $ 1 2 0 0 s 9

1,200.00

Find Loan Costs:

Recall loan ® l 250,000.00
Find points x 1 • 5 % = 3,750.00
Add fees and

find total + 5 5 0 = 4,300.00
Find APR s ˆ 7.77
Find total chgs.

ˆ 389,072.25

Amt. financed ˆ 245,700.00
Total cost ˆ 634,772.25
P&I payment ˆ 1,663.26
Monthly MI ˆ 100.00
Find PIMI pmt ˆ 1,763.26

P

OCKET REFERENCE GUIDE — 19

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

Clear o o 0.00
Enter loan 2 3 0 ) l

230,000.00

Enter term 3 0 T 30.00
Enter interest 7 • 2 5 ˆ 7.25
Find initial monthly P&I

payment p “run” 1,569.01
Enter interest

cap 4 s % 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

(Cont’d)

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OCKET REFERENCE GUIDE — 20

(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 0 s % 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.

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OCKET REFERENCE GUIDE — 21

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

Clear o o 0.00
Enter term 3 0 T 30.00
Enter interest 8 ˆ 8.00
Enter tax$ 1 5 0 0 s 7 1,500.00
Enter insurance$

2 5 0 s 8 250.00

Enter loan 1 5 0 ) l

150,000.00

Find P&I pmt p “run” 1,100.65
PITI payment p 1,246.48
Enter tax

bracket 2 8 s p 28.00
Find annual tax

savings p 3,767.32
Monthly tax

savings p 313.94
Net payment p 932.54

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OCKET REFERENCE GUIDE — 22

Rent vs. Buy

• Term: 30 years Tax: 1.25%

• Interest: 7.5% Insurance: 0.35%

• Down: 10% 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

Clear o o 0.00
Enter term 3 0 T 30.00
Enter interest 7 • 5 ˆ 7.50
Enter down% 1 0 d 10.00
Enter tax% 1 • 2 5 s 7 1.25
Enter insurance%

• 3 5 s 8 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% 2 8 s + 28.00

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OCKET REFERENCE GUIDE — 23

Setting Qualifying Ratios

Enter new qualifying ratios of 30% for
Income and 38% for Debt in q:

STEPS KEYSTROKES DISPLAY

Clear o o 0.00
Enter qualifying

ratios 3 0 : 3 8 q

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)

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OCKET REFERENCE GUIDE — 24

(Cont’d)
Find the Qualifying Loan Amount, Price

and Total Payment:

STEPS KEYSTROKES DISPLAY

Clear o o 0.00
Enter income 7 5 ) i 75,000.00
Enter debt 5 0 0 D 500.00
Enter down$ 5 ) d 5,000.00
Enter tax% 1 • 5 s 7 1.50
Enter ins.% • 2 5 s 8 0.25
Enter MI% • 6 s 9 0.60
Enter association

dues 5 0 e 50.00
Enter interest 7 • 5 ˆ 7.50
Enter term 3 0 T 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 DISPLAY

P&I payment p 1,322.35
PITI payment p 1,700.00
Total payment p 1,750.00

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OCKET REFERENCE GUIDE — 25

“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 o o 0.00
Recall interest ® ˆ 7.50
Recall term ® T 30.00
Recall property

tax% ® 7 1.50

(Cont’d)

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OCKET REFERENCE GUIDE — 26

(Cont’d)

STEPS KEYSTROKES DISPLAY

Recall property

insurance% ® 8 0.25
Re-enter MI% • 6 s 9 0.60
Re-enter homeowner’s

dues 5 0 e 50.00
Enter down 5 ) d 5,000.00
Enter income 6 8 ) i 68,000.00
Enter monthly

debt 7 5 0 D 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)

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OCKET REFERENCE GUIDE — 27

(Cont’d)

STEPS KEYSTROKES DISPLAY

Find actual ratios

q 22.76-36.00

Find “Unrestricted” loan

amount q

170,870.75 LA INC*

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).

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OCKET REFERENCE GUIDE — 28

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

Clear o o 0.00
Enter income 5 5 ) i 55,000.00
Enter debt 5 0 0 D 500.00
Enter tax% 1 • 2 5 s 7 1.25
Enter insurance%

• 3 s 8 0.30

Enter MI% • 4 5 s 9 0.45
Enter monthly association

dues 5 0 e 50.00
Enter term 3 0 T 30.00
Enter interest 6 • 2 5 ˆ 6.25
Display Qual 1

ratios q 28.00-36.00

(Cont’d)

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OCKET REFERENCE GUIDE — 29

(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

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OCKET REFERENCE GUIDE — 30

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

Clear o o 0.00
Enter interest 5 • 8 8 ˆ 5.88
Enter term 3 0 T 30.00
Enter tax% 1 • 5 s 7 1.50
Enter insurance%

• 2 5 s 8 0.25

Clear MI% 0 s 9 0.00
Enter price 3 0 0 ) P

300,000.00

Enter down% 2 0 d 20.00
Find down$ d 60,000.00

(Cont’d)

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OCKET REFERENCE GUIDE — 31

(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

P

OCKET REFERENCE GUIDE — 32

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 COMBO
w/PMI (1st/2nd)

Loan 250,000 250,000
Interest 6.50% 6.00% –

8.50%

Term 30 30 year–

15 year

PMI 0.62% --
LTV 95% 80% –

10%

STEPS KEYSTROKES DISPLAY

1. Enter Fixed-Rate Loan Values and
Find Total Payment:

Clear o o 0.00

Enter loan 2 5 0 ) l

250,000.00

Enter

interest 6 • 5 ˆ 6.50
Enter term 3 0 T 30.00
Enter MI% • 6 2 s 9 0.62

(Cont’d)

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OCKET REFERENCE GUIDE — 33

(Cont’d)

STEPS KEYSTROKES DISPLAY

Clear Tax 0 s 7 0.00
Clear

Insurance 0 s 8 0.00
Solve for

payment p 1,580.17
Solve for PITI (including

PMI) p 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)

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OCKET REFERENCE GUIDE — 34

(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.

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OCKET REFERENCE GUIDE — 35

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.

Annual Cash Flow
Year 1 $16,000
Year 2 $16,600
Year 3 $16,900
Year 4 $17,200
Year 5 $275,000

STEPS KEYSTROKES DISPLAY

Clear CF s 6 0.00
Set 1 payment

per year 1 s ÷ 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)

P

OCKET REFERENCE GUIDE — 36

(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 9 s R 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.

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OCKET REFERENCE GUIDE — 37

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 5 0.00000
s 4 0.0000
s 3 0.000
s 2 0.00
s 1 0.0
s 0 0.
s • floating point

APPENDIX

P

OCKET REFERENCE GUIDE — 38

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.