Calculated Industries 3442 User Manual

ORTGAGE

UALIFIER

LUS®PX2

User’s Guide

Model 3442

Desktop Model 43442

MORTGAGE FINANCE CALCULATOR

The

ORTGAGEQUALIFIERPLUS PX

was custom-designed for mortgage lenders and residential real estate pros. With the push of a few buttons, it will pre-qualify prospective buyers instantly and solve hundreds 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/VAloans)

• 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

ORTGAGEQUALIFIERPLUS®PX

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

SER’SGUIDE

— 1

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.

Memory

— Adds the displayed number to the inde-

pendent memory. Pressing s µ

(M-)

will subtract 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

2 — M

ORTGAGEQUALIFIERPLUS®P

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) problems, 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.

Loan Amount

— Enters or solves for the initial loan

amount or present value of a financial problem.

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

— Enters or solves for the periodic principal and interest (P&I) payment. Pressing p a second time in succession calculates the PITI payment (P&I plus property tax, property insurance and mortgage 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 calculates 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.

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

SER’SGUIDE

— 3

value of a financial problem.

s +

Investment Future Value

— Functions the same as Future Value, but compounds interest at the beginning of the period rather than the end.

Sales Price

— Enters or calculates Sales Price based on the entries of Loan Amount (or equivalent mortgage components) and Down Payment.

Down Payment

— Enters (in either percent or dollars) or calculates Down Payment, based on the entries of Loan Amount (or equivalent mortgage components) and Sales Price. Asecond press changes the entered down payment from a dollar figure to a percent, 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.

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

4 — M

ORTGAGEQUALIFIERPLUS®P

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”.

Amortization (Amort)

— Finds total interest, principal, remaining balance, remaining term, and estimated 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-

SER’SGUIDE

— 5

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 realize significant interest savings. After loan variables are entered, pressing s T displays the reduction in term. The second press of T displays the total interest savings; third press displays the effective 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 calculate the Equity Builder payment. Pressing s T again will exit Equity Builder Mode and re-calculate based on the original term.

Note: Your calculator is programmed to calculate special interestsaving 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 payments 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 mortgage, 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 deduction 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

key definition for details).

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ORTGAGEQUALIFIERPLUS®P

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 variables 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 deduction in the Amortization calculation. Press ® s p to display stored percentage.

(Default=21%)

Qualifying Keys

(Qualify Based on 28%-36%)

— Amulti-function key which, based on entered variables, performs the following qualifying functions:

1) Stores income and debt ratios for loan qualifying. 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 percentage 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)

SER’SGUIDE

— 7

(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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ORTGAGEQUALIFIERPLUS®P

(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.

(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 qor

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.

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.

SER’SGUIDE

— 9

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 percentage 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 pressing ® 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 calculating the PITI payment and for Qualifying. Stores estimated 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, pressing ® 9 converts to the annual dollar amount, and pressing ® 9 once more shows the monthly insurance.

(Cont’d)

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ORTGAGEQUALIFIERPLUS®P

(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 automatically 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).

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:

Start Rate % or Start Payment

— Stores and displays 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 percentage 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.

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)

SER’SGUIDE

— 11

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 selected Recast period.

(Default: 7.5%)

When the Recast period is achieved, then the comparison between the new payment (made for each year) and the Cap Payment is no longer applied.

s %

Return on Investment (ROI%)

— Stores and displays 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 payment, 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 recalculated 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)

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ORTGAGEQUALIFIERPLUS®P

(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 several 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)

SER’SGUIDE

— 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 calculate 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 calculated for years 1-7).

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 payment (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 insurance (MI) is required.

This routine requires a fixed-rate loan to be entered using the standard 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 payment). Both values need to be entered for a valid entry. Values will be retained until changed or reset.

(Default: 80.00-10.00)

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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 interest and term values are required for a valid entry. Values will be retained until changed or reset.

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.

Fixed-Rate Combo (Desktop model 43442 Only)

—

See previous definition for s 5.

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— 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 fixedrate P&I loan).

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).

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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BASIC ARITHMETIC EXAMPLES

Arithmetic

This calculator uses standard chaining logic, which simply means that you enter your first value, the operator (+, –, x, ÷), the second value and then the equals sign (=).

A. 3 + 2 = 5.00 B. 3 – 2 = 1.00 C. 3 x 2 = 6.00 D. 3 ÷ 2 = 1.50

Percentage Calculations

The Percent % key can be used for finding a given percent of a number or for working add-on, discount or division percentage calculations.

A. 8 0 0 x 2 5 % = 200.00 B. 2 5 0 + 1 0 % = 275.00 C. 2 5 – 5 0 % = 12.50 D. 2 0 0 ÷ 5 0 % = 400.00

The Percent % function is a key that has special applications for real estate professionals — especially when figuring a commission amount.

Figuring Straight % Commission

The commission for the listing office is 3%. If the property sells for $259,650, what is the listing office’s commission?

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter sales price 2 5 9 6 5 0 259,650. Multiply by commission % x 3 % = 7,789.50

— DO NOT CLEAR CALCULATOR —

What if the listing agent works on a 50/50 split with his or her broker? What is the listing agent’s share of this commission?

STEPS KEYSTROKES DISPLAY

Multiply by 50 percent x 5 0 % = 3,894.75

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— 17

Reduction in Listing Price (Discount %)

A nervous seller has had her property on the market for just over four months listed at $175,500. Because she is anxious to move into a new home, she wishes to reduce the listing price by 5%. Calculate both the amount of reduction in dollars and the new, lowered listing price.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter sales price 1 7 5 5 0 0 175,500. Subtract 5% – 5 % 8,775.00 Find new listing price = 166,725.00

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

Properties in your area have been going up in value about 6% per year. If you purchase a $275,000 home today, what will it be worth in one year, assuming the same rate of appreciation continues?

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter current value 2 7 5 ) 275,000. Add 6% + 6 % 16,500.00 Find appreciated value = 291,500.00

Note: See page 50 for another example of future value or appreciation.

CALCULATOR SETTINGS

Decimal Place Selection

With the s key, you have the option of selecting the number of decimal places you’d like to display. The values are rounded using conventional 5/4 rounding. You can do this prior to finding an answer or afterwards.

Press s followed by the number of decimal places you wish to display:

s 3 0.000 s 2 0.00 s 1 0.0 s 0 0. s • floating point

To return to the standard two-decimal place setting, press s 2.

Note: This setting will remain until you change it using the commands above.

For Desktop Model (#43442) Users:

You can go up to five decimal places (

s 5

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Preference Settings

Your calculator has a Preference Mode, which allows you to program the calculator to various settings. For example, it lets you store certain values permanently, display certain values, or show values in a specific order.

To access the Preference Mode, press s, then =, then keep pressing = to toggle through the settings listed below. Press the + key to advance through the sub-settings. Use the – key to back up within the sub-settings.

The five P-A-P Loan Preference Settings allow you to select between one and 15 years for Recasting (a) zero-month, (b) onemonth, (c) three-month, (d) 12-month, and (e) 36-month P-A-P loans. Asixth Preference Setting for recasting all other P-A-P loans that have a start month not identified by the other five Preference Settings (e.g., five-month start) is also included to allow for greater flexibility when calculating P-A-P loans.

To return the calculator to its default, or factory-set Preference Settings, perform a total Reset (see page 82).

After s, Keep

Description

Pressing (Press +to Advance

Display

within each category, –to Back up):

1 Decimal Places

- DEC Hold Entry — Permanently sets number of decimal places.

(Default)

- DEC OFF 0.00 — Clears decimal place setting/resets to 0.00 at O.

2 Payments Per Year

- P/Y OFF 12.00 — Resets to 12.00 at O.

(Default)

- P/Y Hold Entry — Permanently sets pmts/year.

3 Insurance Calculation

- INS USE PRICE — Insurance calculation is based on price.

(Default)

- INS USE LOAN — Insurance calculation is based on the loan amount.

(Cont’d)

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— 19

(Cont’d)

After

Keep

Description

Pressing (Press +to Advance

Display

within each category, –to Back up):

at O.

4 Property Tax/Insurance (T/I)

- Clr OFF TAX INS — Clears all Tax/Ins (% and $) values

- Hold Pct. TAX INS — Holds only Tax/Ins percent (%) entries at O.

- Hold All TAX INS — Holds all Tax/Ins (% and $) values at O.

- Clr Clr TAX INS — Clears all Tax/Ins (% and $) values at double press of o (or o o).

5 Mortgage Insurance (MI)

- Clr-Clr M INS — Clears mortgage insurance (% and $) upon o o.

(Default)

- Clr-OFF M INS — Clears mortgage insurance (% and $) at O.

- HOLD Pct. M INS — Holds only percent (%) mortgage insurance entry at O.

- HOLD ALL M INS — Holds (% or $) mortgage insurance entry at O.

6 Amortization/Single Entries

- AMRT Ent-Ent — Displays amortization for specified year only—

e.g., enter

5 a =

payments 49-60. (Default)

- AMRT 1-Ent — Displays amortization from beginning to specified year —

e.g.,

enter

5 a =

payments 1-60.

7 Display Qualifying Ratios

- Q-R PRESS 1 — Displays ratio at beginning of sequence.

(Default)

- Q-R AT END — Displays ratio at end of sequence.

(Cont’d)

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ORTGAGEQUALIFIERPLUS®P

(Cont’d)

After s, Keep

Description

Pressing (Press +to Advance

Display

within each category, –to Back up):

8 Beginning or End Mode

- TYP END — End Mode

(Default)

- TYP BEG — Beginning Mode

9 P-A-P/EB P-A-P Payment Cutoff

- YRS 5.00 P-A-P PMT — Shows the first five payments only.

(Default)

- YRS 1.00 P-A-P PMT — Shows the first payment only.

- YRS nonE P-A-P PMT — Does not show any payments.

- YRS ALL

P-A-P PMT — Shows all adjusted payments. (10-15) P-A-P Loan Recasting 10 - 0 M Recast 10 — Uses 10-year recast for a Zero

P-A-P.

(Default)

Subsequent presses of +advance until Recast year 15, then numbering starts over at one. Note: Press the +key to scroll forward and the –key to scroll backward.

11 - 1 M Recast 10 — Uses 10-year recast for a 1-Mo.

P-A-P.

Subsequent presses of +advance until year 15, then numbering starts over at one.

12 - 3 M Recast 5 — Uses 5-year recast for a 3-Mo.

P-A-P.

(Default)

Subsequent presses of +advance until year 15, then numbering starts over at one.

(Cont’d)

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— 21

(Cont’d)

After

Keep

Description

Pressing (Press +to Advance

Display

within each category, –to Back up):

13 - 12 M Recast 5 — Uses 5-year recast for a 12-Mo.

P-A-P.

(Default)

Subsequent presses of +advance until year 15, then numbering starts over at one.

14 - 36 M Recast 5 — Uses 5-year recast for a 36-Mo.

P-A-P.

(Default)

Subsequent presses of +advance until year 15, then numbering starts over at three.

15 - ALT Recast 5 — Uses 5-year recast for all other

P-A-P loans.

(Default)

Subsequent presses of +advance until year 15, then numbering starts over at one.

MEMORY

Whenever the µ key is pressed, the displayed value will be added to cumulative memory. This value will remain in memory until cleared or when the calculator is turned off. Other memory functions:

FUNCTION KEYSTROKES

Recall total in memory ® µ Display and clear memory ® ® Subtract displayed value from memory s µ Replace memory with displayed value s ® µ

The memory is semi-permanent; that is, it will only be cleared when you:

1) turn off the calculator;

2) press ® ®;

3) press s x (Clear All).

(Cont’d)

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ORTGAGEQUALIFIERPLUS®P

(Cont’d) Examples:

STEPS KEYSTROKES DISPLAY

Enter into memory 3 5 5 µ M 355.00 Enter into memory 2 5 5 µ M 255.00 Recall total in memory ® µ M 610.00 Subtract from memory 7 4 5 s µ M 745.00 Recall total in memory ® µ M -135.00 Replace memory 5 0 s ® µ M 50.00 Recall and clear ® ® 50.00

Memory Storage Keys (M0-M5)

In addition to the standard cumulative Memory (as described above), your calculator has six independent Storage Registers—(M0) through (M5)—that can be used to permanently store single, noncumulative values.

FUNCTION KEYSTROKES

Store single value in M0 s ® 0 Store single value in M1 s ® 1 Store single value in M2-M5 s ® 2, 3, 4 or 5 Clear register (e.g., M1) 0 s ® 1 Review stored value (e.g., M1) ® 1 Clear stored value* s x

*Perform a

s x

(Clear All) with caution, as it will clear any stored values from your

calculator’s registers, although it will not change any of your preference settings.

Example: Store 175 into M1 and recall the value:

KEYSTROKES DISPLAY

1 7 5 s ® 1 M-1 175.00 O o 0.00 ® 1 M-1 175.00

Note: Repeat the above procedure for registers M0-M5, using digits 0– 5. This example is to show you that a value stored in these memory registers will hold, even when the calculator is turned off.

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