Calculated Industries 3442 User Manual

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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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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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(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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Additional Memory Storage Keys (M10-M19)

In addition to M0-M5 (as described previously), your calculator has ten additional independent Storage Registers — (M10) through (M19) — that can also be used to permanently store single, noncumulative values. To access these storage registers, use the following keystrokes: s ® • (#), with (#) being digits 0 – 9.

Examples: Store 250 into M10 and recall the value:

KEYSTROKES DISPLAY

2 5 0 s ® • 0 M-10 250.00 O o 0.00 ® • 0 M-10 250.00

Store 350 into M11 and recall the value:

KEYSTROKES DISPLAY

3 5 0 s ® • 1 M-11 350.00 O o 0.00 ® • 1 M-11 350.00

Note: Repeat the above procedure for registers M12-M19, using digits 2– 9.

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

1. The basic loan keys — l, p, T and ˆ — work just like you would say them. For example, if you wanted to borrow $100,000 for 30 years at 10% interest, just enter those three known variables and press the key for the unknown fourth variable: p.

2. When calculating future value problems, enter the present value into the l key.

3. Financial values may be entered in any order you want.

4. Entered values for Term and Interest are permanently stored in memory.

5. The calculator’s default setting is 12 payments per year, for monthly loans.

(Cont’d)

EXAMPLES

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ORTGAGEQUALIFIERPLUS®P

(Cont’d)

6. It is good practice to press o twice after completing a financial problem to ensure that you have cleared the previous l and p registers.

7. When solving for a financial component, the calculator may display the word “run” in the display. Solving for interest may take several seconds (up to 15) while the word “run” displays.

8. Once you have calculated an answer, for example, a payment, you can go back and change any financial variable and recalculate your new answer

without

re-entering all the other data. This

is handy for demonstrating various “what-if” loan problems.

9. Successive presses of the p key will calculate: 1) the principal and interest (P&I) payment; 2) the PITI payment, which includes property tax, property insurance and mortgage insurance, if entered; 3) the total payment (PITI plus any entered housing expenses), and 4) the interest-only payment.

10. You may also view the interest-only payment by pressing s then π.

Finding the Monthly Loan Payment

Find the monthly P&I (principal and interest) payment on a 30-year, fixed-rate mortgage of $265,000 at 6.75% annual interest.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter loan amount 2 6 5 ) l* 265,000.00 Enter term 3 0 T 30.00 Enter interest 6 • 7 5 ˆ 6.75 Find monthly payment p “run” 1,718.78

*Use the )key to save keystrokes.

What is the new payment if the interest rate is lowered to 6.5%?

STEPS KEYSTROKES DISPLAY

Enter new interest rate 6 • 5 ˆ 6.50 Find monthly P&I payment p “run” 1,674.98

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Finding the Interest-Only Payment

Find the interest-only payment on a loan of $15,000 at 9% interest.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter loan amount 1 5 ) l 15,000.00 Enter interest 9 ˆ 9.00 Find interest-only payment s π* 112.50

*The fourth press of the pkey also calculates the interest-only payment if you have a Term entered, but you may use the above keystrokes as a shortcut.

Finding the 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 calculator o o 0.00 Enter loan amount 1 5 ) l 15,000.00 Enter interest 1 0 ˆ 10.00 Enter monthly payment 2 0 0 p 200.00 Find term in years T “run” 9.85 Find periodic term T 118.19

Paying Off a Loan Early (Making Larger Payments)

How long does it take to pay off a 30-year, fixed-rate loan of $150,000 at 7.25% interest if you add an extra $200 to the mortgage payment each month?

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter loan amount 1 5 0 ) l 150,000.00 Enter interest 7 • 2 5 ˆ 7.25 Enter term 3 0 T 30.00 Find monthly payment p 1,023.26 Add add’tl payment amount + 2 0 0 = 1,223.26 Enter into Payment key and

calculate new payment p 1,223.26

Find reduced loan term T “run” 18.68

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Finding the Interest Rate

Find the interest rate on a mortgage where the loan amount is $98,500, term is 30 years, and the payment is $1,150 a month.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter loan amount 9 8 5 0 0 l 98,500.00 Enter term 3 0 T 30.00 Enter monthly payment 1 1 5 0 p 1,150.00 Find annual interest ˆ “run” 13.78 Find periodic interest ˆ 1.15

Finding the Loan Amount

Approximately how much could you borrow if the interest rate was

7.8% on a 30-year loan and you could afford $1,500 in monthly pay-

ments? What if the interest rate was lowered to 7.5%?

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter interest 7 • 8 ˆ 7.80 Enter term 3 0 T 30.00 Enter monthly payment 1 5 0 0 p 1,500.00 Find loan amount l “run” 208,370.81 Enter new interest rate 7 • 5 ˆ 7.50 Find new loan amount l “run” 214,526.44

Finding the Loan Amount (with Interest-Only Payment)

Find the loan amount for an Interest-Only Loan at 7.5% interest and an Interest-Only Payment of $1,875 a month?

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter I/O payment 1 8 7 5 s V 1,875.00 Enter interest 7 • 5 ˆ 7.50 Find loan amount l 300,000.00

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Non-Monthly Loans

Most residential real estate loans are paid off monthly. However, if you have a non-monthly loan, you must change the number of payments per year by entering in the number of payments per year and pressing s ÷. For example, here’s how to set your calculator to four payments per year.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter # of payments/year 4 s ÷ 4.00

To recall the currently stored number of payments:

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Recall # of payments/year ® ÷ 4.00 Reset to 12 payments/year 1 2 s ÷ 12.00

IMPORTANT: To return payments per year to the default value of 12, perform the following steps:

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter # of payments/year 1 2 s ÷ 12.00

Finding a 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 calculator o o 0.00 Set to 4 payments/year 4 s ÷ 4.00 Enter loan amount 1 5 ) l 15,000.00 Enter term in years 1 0 T 10.00 Enter annual interest 1 2 ˆ 12.00 Find quarterly payment p “run” 648.94 Reset to 12 payments/year 1 2 s ÷ “run” 12.00

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Sales Price/Down Payment

One of the unique features of this calculator is its ability to work with not only Loan Amount, but with Sales Price and Down Payment. You can enter two values to find the third (e.g., enter Price and Down Payment to find Loan Amount). You can also enter the down payment in both percent or dollar format. For example, to enter a percent, say 20%, enter 20 directly into the d key. Or enter $20,000 (e.g., 2 0 ) d).

Note: When using P, dand lkeys, it’s recommended that you always enter the two known values (Price and Down Payment), then solve for the third (Loan Amount), before calculating financial values.

Finding Loan Amount Based on Sales Price and Down Payment

Find the down payment dollar amount and the loan amount if the sales price is $250,000 and you’re planning to put 20% down.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter sales price 2 5 0 ) P 250,000.00 Enter down payment % 2 0 d 20.00 Find down payment $ d 50,000.00 Find loan amount l 200,000.00

Finding Sales Price and Payment Based on Loan Amount and Down Payment

Find a home’s sales price if you’ve been approved for a $200,000, 30-year, 7.5% mortgage and you plan to put 20% down. Also find your monthly payment.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter loan amt 2 0 0 ) l 200,000.00 Enter term 3 0 T 30.00 Enter interest 7 • 5 ˆ 7.50 Enter down pmt % 2 0 d 20.00 Find sales price P 250,000.00 Find monthly payment p “run” 1,398.43

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

Find the loan-to-value if a buyer is putting $15,000 down on a $165,500 home. Then find the loan amount.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter sales price 1 6 5 5 0 0 P 165,500.00 Enter down payment $ 1 5 ) d 15,000.00 Find down payment % d 9.06 Find LTV d 90.94 Find loan amount l 150,500.00

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

Find the down payment dollar amount and the loan amount if a buyer needs to borrow 80% on a $287,000 home.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter sales price 2 8 7 ) P 287,000.00 Enter LTV% 8 0 s d 80.00 Find down payment $ d 57,400.00 Find loan amount l 229,600.00 Find down % d 20.00

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Taxes and Insurance

This calculator has keys that store your estimated local annual Property Tax, Property Insurance, and Mortgage Insurance (if applicable). This allows you to calculate the PITI (Principal, Interest, Tax, and Insurance) payment, in addition to the regular P&I payment. You may also enter monthly expenses, such as homeowner’s association dues—these are included in the calculation of the total payment (PITI plus expenses).

By default, the Property Tax and Insurance values are cleared when the calculator is shut off, while the Mortgage Insurance value clears when you press o twice. However, you can use the Preference Settings (s =) to permanently store, or hold Tax and Insurance (% and $) values when the calculator is turned off.

Note: There’s a separate Preference Setting for Mortgage Insurance.

Tax and insurance can be entered as dollar amounts or percentages. If entered as percentages, the Sales Price or Loan Amount can be changed and tax and insurance will be recalculated automatically. If entered as dollar amounts, however, they will need to be re-entered for a change in Sales Price or Loan Amount to be correct. Entering values less than 10 are assumed to be annual percentage rates.

IMPORTANT: Property Tax and Property Insurance rates are based on the Sales Price* (therefore, a Down Payment or Sales Price should be entered). The Mortgage Insurance rate is based on the Loan Amount. If neither Sales Price nor Down Payment has been entered, the Sales Price is defaulted to equal the Loan Amount (basically assuming a 100% loan), in which case the Tax and Insurance rates will be based on the Loan Amount value entered.

*Property insurance can be based on the Loan Amount by changing the Preference Settings.

Note

: If you are underwriting a loan, many lenders choose to use loan amount instead of price when figuring out Hazard Insurance. In this case, you will need to turn your Hazard Insurance into a dollar amount: Loan Amount x Hazard Insurance Rate = Hazard Insurance dollar amount. By entering a lower amount into Insurance, it will improve the buying power of your client. However, the client will only be covered for the loan amount and not the complete value of the home.

Setting Tax and Insurance % Rates

Enter an annual property tax rate of 1.5%, a property insurance rate of 0.25% and a mortgage insurance rate of 0.50%:

STEPS KEYSTROKES DISPLAY

Set property tax rate 1 • 5 s 7 1.50 Set insurance rate • 2 5 s 8 0.25 Set mortgage ins. rate • 5 s 9 0.50

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Recalling Tax and Insurance % Rates

Recall your stored rates:

STEPS KEYSTROKES DISPLAY

Recall tax rate ® 7 1.50 Recall insurance rate ® 8 0.25 Recall mortgage ins. rate ® 9 0.50

Note: To change these values, simply enter new ones. Or, turn the calculator off then on, and the values will be cleared, unless they are programmed to hold under

Preference Settings.

Setting Tax and Insurance $

Enter annual property taxes estimated at $5,500, property insurance at $350 and mortgage insurance at $600:

STEPS KEYSTROKES DISPLAY

Set annual taxes 5 5 0 0 s 7 5,500.00 Set annual prop. insurance 3 5 0 s 8 350.00 Set annual mortgage ins. 6 0 0 s 9 600.00

Note: Again, to review stored values, press ®and the applicable key (e.g.,

® 7

Calculating Tax and Insurance % or $

If loan variables are entered in addition to tax and insurance percentage rates or dollar values, the respective dollar values or percentage rates can be viewed by simply pressing the applicable keys a second time. For example, enter an annual property tax rate of

1.5%, a property insurance rate of 0.25% and a mortgage insurance rate of 0.50%. Then enter a sales price of $250,000, 10% down, a term of 30 years and an interest rate of 8%. Calculate the loan, payments and annual tax and insurance

dollar amounts

, or premiums:

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter prop. tax rate 1 • 5 s 7 1.50 Enter insurance rate • 2 5 s 8 0.25 Enter mortgage ins. rate • 5 s 9 0.50 Enter price 2 5 0 ) P 250,000.00 Enter down payment % 1 0 d 10.00 Enter term 3 0 T 30.00

(Cont’d)

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ORTGAGEQUALIFIERPLUS®P

(Cont’d)

STEPS KEYSTROKES DISPLAY

Enter interest 8 ˆ 8.00 Find loan amount l 225,000.00 Recall property tax % ® 7 1.50 Calculate property tax $ ® 7 3,750.00 Recall property ins. % ® 8 0.25 Calculate property ins. $ ® 8 625.00 Recall mortgage ins. % ® 9 0.50 Calculate mortgage ins. $ ® 9 1,125.00 Find P&I payment p 1,650.97 Find PITI payment p 2,109.30

Note: The same procedure can be performed to find the opposite — that is, to find the % rates based on entered annual dollar amounts or insurance premiums. Simply enter the tax/insurance dollar amounts and loan variables first, and press ®and the tax/insurance key to calculate the percentage rate.

PITI Payment (Tax and Insurance Entered as %)

Find the PITI payment on a 30-year, 6.5% mortgage if the home’s selling price is $125,000 and the down payment is 5%. Annual property taxes are estimated at 1.3%, annual property insurance at

0.25%, and annual mortgage insurance at 0.45%.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter term in years 3 0 T 30.00 Enter annual interest 6 • 5 ˆ 6.50 Enter sales price 1 2 5 ) P 125,000.00 Enter down payment 5 d 5.00 Set tax rate 1 • 3 s 7 1.30 Set property insurance rate • 2 5 s 8 0.25 Set mortgage ins. rate • 4 5 s 9 0.45 Find loan amount l 118,750.00 Find P&I payment p “run” 750.58 Find PITI payment p 956.57

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PITI Payment (Tax and Insurance Entered as $)

Find the PITI payment on a 30-year, 7.25% loan if the home’s selling price is $311,000 and the down payment is 20%. Local annual property taxes are estimated at $5,900 and property insurance at $370.

Note: MI or mortgage insurance is not included in this case, as the down payment is 20%.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter term in years 3 0 T 30.00 Enter annual interest 7 • 2 5 ˆ 7.25 Enter sales price 3 1 1 ) P 311,000.00 Enter down pmt % 2 0 d 20.00 Find dollar $ d 62,200.00 Enter property tax 5 9 0 0 s 7* 5,900.00 Enter property insurance 3 7 0 s 8 370.00 Set mortgage ins. to zero 0 s 9 0.00 Find loan amount l 248,800.00 Find P&I payment p “run” 1,697.25 Find PITI payment p 2,219.75

*To view the Tax/Insurance rates in their monthly and percent forms: press

® 7

® 7, ® 7

to recall the annual property tax, monthly property tax and % tax rate

of $5,900, $491.67 and 1.9%, respectively.

Total Payment and Interest-Only Payment

Find the PITI, total payment (including principal, interest, tax/insurance and monthly expenses) and interest-only payment on a 30year, 6% mortgage loan if the home’s selling price is $330,000 and the down payment is 15%.

(Local annual property taxes are estimated at $5,900, property insurance at $500, mortgage insurance at $1,200, and mo. expenses at $150.)

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter term in years 3 0 T 30.00 Enter annual interest 6 ˆ 6.00 Enter sales price 3 3 0 ) P 330,000.00 Enter down pmt % 1 5 d 15.00 Find dollar $ d 49,500.00 Enter property tax 5 9 0 0 s 7 5,900.00

(Cont’d)

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(Cont’d)

STEPS KEYSTROKES DISPLAY

Enter property insurance 5 0 0 s 8 500.00 Enter mortgage insurance 1 2 0 0 s 9 1,200.00 Enter monthly expenses 1 5 0 s D 150.00 Find loan amount l 280,500.00 Find P&I payment p “run” 1,681.74 Find PITI payment p 2,315.07 Find total payment (PITI

plus mo. expenses) p 2,465.07

Find interest-only payment p 1,402.50

Estimated Income Tax Savings and “After-Tax” Payment

Note: This example calculates the annual tax savings (including property tax and mortgage interest) and is only an estimate. Please inform your clients to consult a tax advisor for an accurate calculation of their income tax deductions.

Buyers in a 28% income tax bracket are looking to finance a $150,000 mortgage for 30 years at 8% annual interest. If they will be paying approximately $1,500 in annual property taxes and $250 in annual property insurance, find their

estimated

annual tax savings (or mortgage interest/property tax savings) and “after-tax” monthly payment.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter term in years 3 0 T 30.00 Enter annual interest 8 ˆ 8.00 Enter annual tax 1 5 0 0 s 7 1,500.00 Enter annual insurance 2 5 0 s 8 250.00 Enter loan amount 1 5 0 ) l 150,000.00 Find P&I payment p “run” 1,100.65 Find PITI payment p 1,246.48 Enter tax bracket 2 8 s p 28.00 Find annual income

tax savings p 3,767.32 Find monthly tax savings p 313.94 Find “after-tax” payment p 932.54

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If the above loan starts in July, find the “after-tax” payment.

STEPS KEYSTROKES DISPLAY

Set Mo. 1 Offset to July 7 s ) 7.00 Find annual tax savings s p p 1,887.16 Find monthly tax savings p 314.53 Find “after-tax” payment p 931.95 Return Mo. Offset to Jan. 1 s ) 1.00 Return tax bracket to 21% 2 1 s p 21.00

Rent vs. Buy

If your client is currently renting a home for $1,250/month, what is the comparable home sales price and loan amount that he or she could afford? What is the estimated annual and monthly income tax savings, if they were to finance this mortgage? The current rate is

7.5% on a 30-term fixed-rate mortgage, and your client can afford to put 10% down. You estimate local taxes at 1.25% and property insurance at 0.35%. Your client is in the 28% tax bracket.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter interest rate 7 • 5 ˆ 7.50 Enter term 3 0 T 30.00 Enter down payment 1 0 d 10.00 Enter tax bracket 2 8 s p 28.00 Enter property tax rate 1 • 2 5 s 7 1.25 Enter insurance rate • 3 5 s 8 0.35 Enter current monthly rent to find

comparable home price 1 2 5 0 s P 216,781.98

Find comparable

loan amount P 195,103.78 Find PITI payment P 1,653.24 Find annual tax savings P 4,838.84 Find mo. tax savings P 403.24 Re-display tax bracket P 28.00 Re-display monthly rent P 1,250.00 Return tax bracket to 21% 2 1 s p 21.00

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APR and Total Finance Charges

Calculating the Annual Percentage Rate (APR) and Total Finance Charges (TFC) is performed in two steps: (1) you set up the loan just like any other problem (that is, enter three known variables and solve for the fourth) and (2) combine points and fees and press s ˆ (APR) to solve APR. If you continue to press ˆ a second time (in succession), the calculator will also display the total finance charges, a third press will display the amount financed, and a fourth press will display total finance charges plus principal.

If mortgage insurance is entered, as seen in the following (second) example, your calculator will include that expense into APR and total finance charges, as well as calculate the periodic mortgage insurance dollar amount and PIMI (principal, interest, mtg. ins.) payment.

Note: APR for non-real estate loans (such as for autos and boats) that compound interest based upon 365 days per year cannot be solved using this function, as calculations are based on 360 days per year.

Finding APR, Total Finance Charges (Excluding Mortgage Insurance)

You are financing a mortgage of $250,000 for 30 years at a nominal, or quoted, rate of 8% interest. The cost of getting the loan is quoted as 1.5 points and $550 in fees. Mortgage insurance is not required. What is the APR and total finance charges when these costs are included?

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter loan amount 2 5 0 ) l 250,000.00 Enter interest 8 ˆ 8.00 Enter term 3 0 T 30.00 Find monthly P&I payment p “run” 1,834.41

Find Loan Costs:

Recall loan amount ® l 250,000.00 Find point cost x 1 • 5 % = 3,750.00 Add fees and find total + 5 5 0 = 4,300.00 Find APR* s ˆ “run” 8.18 Find total finance charges ˆ 414,688.12 Find amount financed ˆ 245,700.00 Find total finance charges

plus principal ˆ 660,388.12

*Because APR is an interest calculation, it may take several seconds to calculate.

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Finding APR, Total Finance Charges (Including Mortgage Insurance)

You are financing a mortgage of $275,000 for 30 years at a nominal, or quoted, rate of 6.25% interest. The cost of getting the loan is quoted as 1.5 points plus $550 in fees. What is the APR including mortgage insurance, total finance charges, principal amount financed, total cost, P&I payment, mortgage insurance, and PIMI payment? Mortgage insurance is estimated at 0.65% of the loan amount.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter loan amount 2 7 5 ) l 275,000.00 Enter interest 6 • 2 5 ˆ 6.25 Enter term 3 0 T 30.00 Find monthly P&I payment p “run” 1,693.22 Enter mortgage ins. % • 6 5 s 9 0.65

Find Loan Costs:

Recall loan amount ® l 275,000.00 Find point cost x 1 • 5 % = 4,125.00 Add fees and find total + 5 5 0 = 4,675.00 Find APR* s ˆ “run” 7.24 Find finance charges (including

mortgage ins.*, points/fees and total interest paid) ˆ 392,860.03

Find amount financed

(principal minus pts/fees) ˆ 270,325.00

Find total finance charges

plus amount financed ˆ 663,185.03 P&I payment ˆ 1,693.22 Mo. mortgage insurance ˆ 148.96 PIMI payment** ˆ 1,842.18

*APR includes mortgage insurance, if entered. Total finance charges include mortgage insurance over the life of the loan, to present a worst-case scenario; however, most people can eliminate MI once a certain LTV is met.

**Payment includes estimated monthly mortgage insurance.

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Date Examples

Using the : key, you can quickly solve common real estate date problems: escrow or closing dates, listing expiration dates, and the number of days prepaid interest, etc. You enter a date as follows: Numerical Month :, Numerical Day : and two-digit Numerical Year.

The date function lets you: 1) add a number of days to a date to find a second date (in the future), 2) subtract a number of days from a date to find a second date (in the past), and, 3) subtract one date from another date to find the number of days in between. For example, if a 45-day escrow begins April 27, 2007, what is the closing date and day?

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter month 4 : 4.- Enter day 2 7 : 4-27- Enter year 0 7 4-27-07 Add 45 days + 4 5 = MON 06-11-07

Find the number of days to calculate prepaid interest due at closing, if the escrow closing date is 10/14/07 and the first payment is due 11/1/07.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter 1st payment date 1 1 : 1 : 0 7 11-1-07 Subtract closing date to

find number of days – 1 0 : 1 4 : 0 7 = 18.00

Finding Odd-Days Interest and APR

Find the monthly payment on a $100,000 loan at 8.25% annual interest and 30-year term. Then, find the amount of odd-days interest, or “prepaid” interest due, if the escrow closes on 7/21/07 and the first payment is due 8/1/07.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter loan amount 1 0 0 ) l 100,000.00 Enter interest 8 • 2 5 ˆ 8.25 Enter term 3 0 T 30.00 Find monthly payment p “run” 751.27 Find days between escrow 8 : 1 : 0 7 –

closing & date of 1st pmt 7 : 2 1 : 0 7 = 11.00

Find the pre-paid interest

due at closing s : 252.08*

*This is based on a 360-day year, as most banks use this method for calculating prepaid interest.

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Now, without clearing the calculator, add the pre-paid interest to the loan’s points and fees if they are equal to 1.5% and $500, respectively. Then find the Annual Percentage Rate (APR), based on these closing costs.

STEPS KEYSTROKES DISPLAY

Store the pre-paid interest

in memory µ M 252.08 Find Loan Costs: Recall loan amount ® l M 100,000.00 Find point cost x 1 • 5 % = M 1,500.00 Add fees + 5 0 0 = M 2,000.00 Add prepaid interest

stored in memory + ® µ = M 2,252.08 Find APR for this loan s ˆ M “run” 8.50 Clear All s x “All Cleared” 0.00

Equity Builder Loans

Your calculator includes an Equity Builder loan function (s T) that allows you to convert established, fully amortized monthly loans into Equity Builders (in which one-half the monthly payment is made every two weeks). Because you make two extra half-payments per year (i.e., 26 equity builder payments is like making 13 payments per year), these kinds of loans can amount to large interest savings and a substantial reduction in the time it takes to pay them off.

You begin these problems by setting up the initial monthly loan and then pressing s T. The first press of T displays the Equity Builder term, the second press shows the total interest savings over the entire loan, the third press calculates the effective interest rate, the fourth press calculates the total interest paid, the fifth press shows the total principal paid, the sixth press shows the total principal and interest; and the last press calculates the Return on Investment (ROI%) you’d gain from this type of loan. Press the p key to find the Equity Builder payment.

Note: Please see Equity Builder definition.

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Equity Builder Term Reduction and Payment

Find the monthly P&I payment on a 30-year, $212,500 mortgage at

7.85% annual interest. Then convert it to an Equity Builder and find out how many years it will take to pay off this loan, the total interest savings, the return-on-investment (ROI%), and Equity Builder P&I payment.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter loan amount 2 1 2 5 0 0 l 212,500.00 Enter term in years 3 0 T 30.00 Enter annual interest 7 • 8 5 ˆ 7.85 Find monthly P&I payment p “run” 1,537.09 Find Equity Builder term s T “run” 22.97 Find total interest savings T 94,305.23 Find effective interest rate T 6.01 Find total interest paid T 246,545.97 Find total principal T 212,500.00 Find total prin. and interest T 459,045.97 Find ROI% T 46.29 Find Equity Builder P&I payment

p 768.54

— DO NOT CLEAR CALCULATOR —

Equity Builder Interest Savings - Based on Adjusted Equity Builder Payment

Now, add fifty dollars to the Equity Builder P&I payment and solve for the new Equity Builder term, the total interest savings, the Effective Interest Rate (EFF%) and the Return-On-Investment (ROI%).

STEPS KEYSTROKES DISPLAY

Add $50 and enter new payment

+ 5 0 = p 818.54

Solve for new Equity Term Builder

T 19.54

Find total interest savings T 137,487.13 Find effective interest rate T 5.11 Find total interest paid T 203,364.07 Find total principal T 212,500.00 Find total prin. and interest T 415,864.07 Find ROI% T 51.10 Clear calculator* o o 0.00

*Return to monthly payment mode by pressing otwice, or by pressing

s T

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Amortization and Remaining Balance

The amortization function is quick and simple. It allows you to find total interest, principal and remaining balance for an entire loan, for an individual payment or individual year, or any range of payments or range of years, for fully or partially amortized loans.

Notes on Amortization

1. When you enter a range of payments using the Colon : key,

you can find all three possible outputs — Interest, Principal and Remaining Balance — without having to re-enter the range each time. Simply keep pressing the a key to find the values.

2. You can also find Remaining Balance using the s a key by

specifying a year or range of years, period or range of periods. For example, to find the remaining balance after the 10th year, press 1 0 s a; to find the remaining balance after the 10th period, press 1 0 π s a.

3. Entered ranges are inclusive, so that a range of 1 to 5 would

include both year 1 and year 5.

4. Entering a numerical value or performing a math operation on

the keyboard will alter the values (including the default settings) for range of payments calculations. It is, therefore, best to specify a range of payments or individual payment before you calculate any of the above.

5. In some cases, it is the practice to include a final, regular P&I

payment with the “balloon payment.” This calculator will not include that in the internal calculation of remaining balance; it will only display the actual principal balance remaining.

6. If the first payment of a loan begins in a month other than

January, you can set that month by using the Month Offset function. The default for this setting is 1 (for January). To change the start month, press the number of the month, then the s and ) keys. This allows you to calculate the correct number of periods in the amortization range. For example, if the first payment of a loan begins in April, the value stored in the month offset would be 4 (press 4 s )). If requesting amortization values for year 1 (press 1 a), the amortization of periods 1-9 would be displayed. Year 2 (press 2 a) would display values for periods 10-21. Turning your calculator off and back on returns the Month Offset to 1 (January).

Note: If you have changed your Month Offset, be sure to return it to 1 (i.e.,

s )

) before proceeding to the next problem.

(Cont’d)

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(Cont’d)

7. A useful new feature is that your calculator will also display an estimated Mortgage Interest Tax Deduction at the end of the amortization value list (after remaining balance is displayed), if a tax bracket is also entered via s p (Tax Brkt%).

Note: If a tax bracket % is not entered, the calculator will use the default tax bracket of 21%, displayed upon

® s p

8. Your calculator automatically advances to the Next Amortization Range or Period after the initial sequence is complete, upon repeated presses of a. This saves you from entering the next range or period each time.

Total Principal/Total Interest for a 30-Year Loan

How much total interest will you pay on a $300,000 loan at 7.5% interest over 30 years? What is the total amount paid?

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter loan amount 3 0 0 ) l 300,000.00 Enter interest 7 • 5 ˆ 7.50 Enter term 3 0 T 30.00 Find monthly payment p “run” 2,097.64 Find total # of payments a “run” 1-360 Find total interest paid a 455,151.67 Find total principal paid a 300,000.00 Find total principal/interest a 755,151.67

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Amortization List for Individual Year(s) —

Using “Next” Feature

How much total interest and total principal will you pay on a 30-year, $90,000 loan at 8% interest during the first year? The second year? Third year, etc.? First, find monthly payment to “set-up” this loan. The calculator will automatically advance to the next year upon subsequent presses of a.

Note: The mortgage interest tax deduction is based on the default tax bracket of 21% unless you have changed it via

s p

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter loan amount 9 0 ) l 90,000.00 Enter interest 8 ˆ 8.00 Enter term 3 0 T 30.00 Find monthly payment p “run” 660.39 Enter Yr. 1 1 a “run” 1-12 Find total interest in Yr. 1 a 7,172.83 Find total principal in Yr. 1 a 751.83 Find prin./interest in Yr. 1 a 7,924.66 Find remaining balance a 89,248.17 Find remaining term a 29.00 Find mortgage interest

tax deduction in Yr. 1 a 1,506.29 Display next year (Yr. 2) a “run” 13-24 Find total interest in Yr. 2 a 7,110.43 Find total principal in Yr. 2 a 814.23 Find prin./interest in Yr. 2 a 7,924.66 Find remaining balance a 88,433.94 Find remaining term a 28.00 Find mortgage interest

tax deduction in Yr. 2 a 1,493.19 Display next year (Yr. 3) a “run” 25-36

(etc.—sequence repeats for each year)

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Amortization List for Individual Year(s) —

Using Month Offset

The first payment of a loan begins in May. Using the same loan amounts as the previous example, how much total interest and total principal will you pay on a 30-year, $90,000 loan at 8% interest during the first year?

Note: The mortgage interest tax deduction is based on the default tax bracket of 21%, unless you have changed it via

s p

. The calculator will automatically advance to

the next year upon subsequent presses of a.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Set Month Offset to May 5 s ) 5.00 Enter loan amount 9 0 ) l 90,000.00 Enter interest 8 ˆ 8.00 Enter term 3 0 T 30.00 Find monthly payment p “run” 660.39 Enter Yr. 1 1 a “run” 1-8 Find total interest in Yr. 1 a 4,788.58 Find total principal in Yr. 1 a 494.53 Find prin./interest in Yr. 1 a 5,283.10* Find remaining balance a 89,505.47 Find remaining term a 29.33 Find mortgage interest

tax deduction in Yr. 1 a 1,005.60

Display next year (Yr. 2) a “run” 9-20

(etc.—sequence repeats for each payment)

Return Mo. Offset to 1** 1 s ) 1.00

*Payments are rounded to the nearest whole cent; therefore, the penny difference. **Remember to reset Month Offset to 1. Check this setting by pressing

® )

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Amortization List for Individual Payment(s)

For a $175,000 loan at 6.85% interest for 30 years, find out how much interest and how much principal you’ll pay in the first and second payments.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter loan amount 1 7 5 ) l 175,000.00 Enter interest 6 • 8 5 ˆ 6.85 Enter term 3 0 T 30.00 Find monthly payment p “run” 1,146.70* Enter Pmt #1 1 π a “run” 1-1 Find interest in Pmt #1 a 998.96 Find principal in Pmt #1 a 147.75 Find prin./int. in Pmt #1 a 1,146.70 Find rem. bal. in Pmt #1 a 174,852.25 Find rem. term in Pmt #1 a 29.92 Find mortgage interest

deduction in Pmt #1 a 209.78 Display Pmt #2 a “run” 2-2

(etc.—sequence repeats for each payment)

— DO NOT CLEAR CALCULATOR —

For the same loan, find the amount of principal and interest paid in the 36th payment. Also, find the total payment, remaining balance and remaining term.

STEPS KEYSTROKES DISPLAY

Enter Pmt #36 3 6 π a “run” 36-36 Find interest in Pmt #36 a 966.39 Find principal in Pmt #36 a 180.32 Find prin./int. Pmt #36 a 1,146.70* Find remaining balance a 169,113.79 Find remaining term a 27.00 Find mortgage interest

deduction in Pmt #36 a 202.94

*Payments are rounded to the nearest whole cent; therefore, the penny difference.

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Amortization List for a Range of Payments or Years

For a $225,000, 30-year loan at 7.4% interest, find out how much interest and principal you’ll pay in payments 1-9 and years 1-10.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter loan amount 2 2 5 ) l 225,000.00 Enter interest 7 • 4 ˆ 7.40 Enter term 3 0 T 30.00 Find monthly payment p “run” 1,557.85 Enter Pmts #1-9 1 : 9 π a “run” 1-9 Find interest a 12,449.13 Find principal a 1,571.56 Total principal and interest a 14,020.69 Find remaining balance a 223,428.44 Find remaining term a 29.25 Find mortgage interest

deduction for Pmts #1-9 a 2,614.32 Enter Years #1-10 1 : 1 0 a “run” 1-120 Find interest a 156,798.68 Find principal a 30,143.87 Total principal and interest a 186,942.55 Find remaining balance a 194,856.13 Find remaining term a 20.00 Find mortgage interest

deduction for Years #1-10a 32,927.72

Balloon Payment/Remaining Balance Needed to Pay Off a Loan

You’re looking at a new home with the following financing available: Loan amount $125,000 at 8.75% amortized over 30 years but due and payable after 10 years. What is the balloon payment (remaining balance) after 10 years?

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter the loan amount 1 2 5 ) l 125,000.00 Enter interest 8 • 7 5 ˆ 8.75 Enter term 3 0 T 30.00 Find monthly payment p “run” 983.38 Find balloon/remaining

balance after 10 years 1 0 s a “run” 111,277.99

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Mortgage Interest Tax Savings —

21% or 30% Tax Bracket

What is the mortgage interest tax savings for the first year (if loan starts in January*) on a $310,000, 30-year loan at 7.25% interest? Base it on 21% tax bracket (default). Then, recalculate based on a 30% tax bracket.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter the loan amount 3 1 0 ) l 310,000.00 Enter interest 7 • 2 5 ˆ 7.25 Enter term 3 0 T 30.00 Find monthly payment p “run” 2,114.75 Enter Yr. 1 1 a “run” 1-12 Find total interest in Yr. 1 a 22,376.60 Find total principal in Yr. 1 a 3,000.36 Find prin./interest in Yr. 1 a 25,376.96 Find remaining balance a 306,999.64 Find remaining term a 29.00 Find mortgage interest tax

savings in Yr. 1 based on 21% tax bracket a 4,699.09

(etc.—keep pressing

if you want to automatically find next

year’s amortization values and mortgage interest tax savings.)

Enter 30% tax bracket 3 0 s p 30.00 Enter Yr. 1 1 a “run” 1-12 Find total interest in Yr. 1 a 22,376.60 Find total principal in Yr. 1 a 3,000.36 Find prin./interest in Yr. 1 a 25,376.96 Find remaining balance a 306,999.64 Find remaining term a 29.00 Find mortgage interest

tax savings in Yr. 1 a 6,712.98

Return calculator to 21%

tax bracket 2 1 s p 21.00

*Note: If loan does not start in January, use the Month Offset feature (e.g., if loan starts in July, enter

7 s )

and begin problem).

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Future Value

Given any four components to a problem that includes a future value, you can calculate the fifth.

Appreciation

You purchased a home for $350,000 and want to know what it will be worth in 3 years, figuring an inflation or appreciation rate of 6%.

(Set periods to one per year.)

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Set to 1 pmt/yr 1 s ÷ 1.00 Enter present value 3 5 0 ) l 350,000.00 Enter term in years 3 T 3.00 Enter appreciation rate 6 ˆ 6.00 Find future value s l “run” 416,855.60 Return to 12 pmts/yr 1 2 s ÷ 12.00

Basic Savings Account Problem (Future Value of an Initial Deposit or Lump Sum)

What is the future value of an initial deposit of $15,000 after 5 years, if interest is compounded monthly and the interest rate is 3%?

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Recall payments/year* ® ÷ 12.00 Enter savings deposit into

Loan Amt (present value) 1 5 ) l 15,000.00 Enter interest rate 3 ˆ 3.00 Enter term in years 5 T 5.00 Find future value s l 17,424.25

*Calculator must be set to default of 12 periods per year, for compounding monthly. If it isn’t, enter

1 2 s ÷

Investment Future Value

The new investment future value function works the same as the future value function, except that the interest is compounded at the beginning of the period rather than the end. This is typical of most annuities.

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Retirement Annuity

What is the future value of an intial deposit of $87,000 after 15 years, if an additional $250 is deposited monthly, the interest rate is 5%, compounded at the beginning of each month?

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter present value 8 7 ) l 87,000.00 Enter payment 2 5 0 p * 250.00 Enter term 1 5 T 15.00 Enter interest rate 5 I 5.00 Find the Investment FV s + 250,992.90

Note: If calculating annual lump-sum payments, you must set your payment per year to one (e.g.

1 s ÷

). T o change back to compound monthly, press

1 2 s ÷ .

Begin/End Interest Mode

The new begin/end preference setting allows you to set the interest to compound at the beginning or end (default) of the period. See Preference Settings.

Below is an example of using beginning mode in conjunction with the future value function to get the same results as the investment future value function in the previous retirement annuity calculation.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Go to begin/end preference s = (press = 7 more times) End Set to beginning mode + bE9 Set to 1 pmt/yr 1 s ÷ 1.00 Enter present value 8 7 ) l 87,000.00 Enter payment 1 5 ) s _ p * -15,000.00 Enter term 1 5 T 15.00 Enter interest rate 5 I 5.00 Find the Investment FV s l 520,729.13 Return to 12 pmt/yr 1 2 s / 12.00 Go to begin/end preference s = (press = 7 more times) bE9 Set to end mode + End

*When using the future value function, you must enter payments as a negative value. When using the new investment future value function, payments are entered as a positive value.

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Trust Deeds and Discounted Notes

Your calculator easily handles trust deed purchase price and yield problems. Two things to remember are: (1) when entering or solving for “yield” or “rate of return,” use the ˆ key, and (2) when entering or solving for “purchase price” or “present value,” use the l key.

Purchase Price of a Note —

Fully Amortized

The mortgage you are thinking about buying has the following terms and conditions: 15 years remaining, $100 per month incoming payments, and you want a 25% yield or return on your investment. In this case you are paying for the income stream — the incoming payments — and not the future value.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter desired yield 2 5 ˆ 25.00 Enter term 1 5 T 15.00 Enter payment amount 1 0 0 p 100.00 Find purchase price l “run” 4,682.68

— DO NOT CLEAR CALCULATOR —

What if you want a 20% yield? Leave all of the above data and reenter the 20% interest over the old rate, then re-calculate the loan amount.

STEPS KEYSTROKES DISPLAY

Enter your new desired

rate of return 2 0 ˆ 20.00

Find purchase price l “run” 5,693.80

Finding the Yield on a Discounted Note

An individual wants to sell you a note under the following terms: 60 months remaining in the term, a face amount when due of $7,500, 10% interest-only payments of $62.50 (incoming). He says he will sell this note to you for $6,500 if you buy today. If you buy it, what will be the yield on your investment?

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter future value of

note when due 7 5 0 0 s l 7,500.00 Enter purchase price 6 5 0 0 l 6,500.00 Enter remaining term 6 0 π T 60.00 Enter payment amount 6 2 • 5 0 p 62.50

Find your yield ˆ “run” 13.70

— DO NOT CLEAR CALCULATOR —

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What should you pay for this trust deed if you want an 18% yield on your investment?

STEPS KEYSTROKES DISPLAY

Enter your desired yield 1 8 ˆ 18.00 Find purchase price l “run” 5,530.99

Finding the Value and Discount of a Trust Deed

Determine the value and discount required for a $75,000 mortgage, payable at $937.50 per month, bearing interest at 11 percent per year, due in seven years.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Store loan amt in Memory 7 5 ) l µ M 75,000.00 Enter monthly payment 9 3 7 • 5 p M 937.50 Enter annual term 7 T M 7.00 Enter annual interest rate 1 1 ˆ M 11.00 Calculate remaining balance

s l M 43,576.27

— DO NOT CLEAR CALCULATOR —

What should you pay for this trust deed if you want a 17% yield on your investment?

STEPS KEYSTROKES DISPLAY

Enter desired yield 1 7 ˆ M 17.00 Calculate value of mortgage

l M 59,243.35

Subtract from Memory s µ M 59,243.35 Calculate discount

(recall Memory) ® µ M 15,756.65

Clear Memory* ® ® 15,756.65

*Pressing

® ®

or turning the calculator Owill clear the value stored in Memory.

52 — M

ORTGAGEQUALIFIERPLUS®P

BUYER QUALIFYING

The Qualifying keys on your calculator let you instantly pre-qualify prospective buyers. Mortgage lending pros will find these keys useful for doing instant loan pre-qualifications on the phone or in front of clients. Real estate agents/brokers can quickly pre-qualify clients so they can show them homes in their affordable price range.

The calculator gives you three types of qualifying answers: (1) Loan Amount Available given buyer’s income and debt, (2) Income Required given loan amount (or price/down payment) and (3) Actual Ratios given both income/debt and property data. Here are some notes on qualifying using your calculator:

1. The q and Q keys are multi-function “smart” keys. In other

words, they deliver a variety of answers based on what is input, and what is not. The calculator will figure out which qualifying solutions should be displayed, based on the qualifying variables you’ve input.

2. You can use both Qualifying keys q and Q to calculate var-

ious standard loan qualifying comparisons or scenarios (e.g., conventional vs. FHA loans). Use s q and s Q to calculate Interest-Only loan qualifying scenarios. Simply store different income and debt qualifying ratios. For example, the q key defaults to 28% Income and 36% Debt, for conventional loan qualifying. The Q key defaults to 33% Income and 40% Debt. However, you may store

any ratios you want

into

these keys, or change these ratios at any time.

3. A calculated Qualifying Loan Amount is automatically stored in

the Loan Amount l register, replacing any existing Loan Amount value. This lets you instantly proceed to monthly payment calculations, etc.

4. When calculating Qualifying Loan Amount (based on entered buyer’s

data, term, interest and stored qualifying ratios), successive presses of the q or Q keys give the following results:

• the first press of q or Q will display your stored ratios;

• the second press in succession will display the “restrictive,” maximum qualifying loan amount (used in loan approval);

• the third press in succession will show the buyer’s actual income and debt ratios;

• the fourth press will display the higher, “unrestricted” qualifying loan amount;*

(Cont’d)

SER’SGUIDE

— 53

(Cont’d)

• the last press will display the allowable monthly debt.

(Note: You can set your Qualifying Ratios to display first or last via the Preference Settings.

5. When calculating Annual Income Required (based on entered loan amount or sales price, term, interest and stored qualifying ratios), the first press of q or Q will display your stored ratios, the second press in succession will display the Annual Income Required, and the third press in succession will show the Allowable Monthly Debt.

6. When calculating buyer’s Actual Ratios based on entered borrower data (i.e., income and debt) and property data (i.e., loan amount, sales price), the first press of q or Q will display the stored qualifying ratios, and the second press will calculate the buyer’s actual ratios (Insurance can be based on Loan Amount if changed in the Preference Settings).

7. You can use the s D or A on Desktop (

Expense)

, s 7

(

Tax)

, s 8 (

Ins)

, and s 9 (

Mtg Ins)

keys as optional variables affecting buyer qualifying (and PITI payments). Tax and Insurance rates are calculated from the Sales Price (Insurance can be based on Loan Amount). Mortgage Insurance is calculated from the Loan Amount.

QUALIFYING EXAMPLES

Most of the examples in this section will be based on the default Income and Debt Ratios of 28% and 36%, respectively, which are stored in the q key.

Recalling Income/Debt Qualifying Ratios

Recall stored 28%-36% and 33%-40% ratios:

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Recall qualifying ratios 1 ® q 28.00-36.00 Recall qualifying ratios 2 ® Q 33.00-40.00

54 — M

ORTGAGEQUALIFIERPLUS®P

Storing New Income/Debt Qualifying Ratios

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

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Set qualifying ratios 3 0 : 3 8 q 30.00-38.00 Return ratios to 28:36* 2 8 : 3 6 q 28.00-36.00

*Your ratios will be permanently stored, or will remain even after your calculator is turned off. You must enter new ratios to restore your calculator to the default ratios of 28:36 and 33:40.

Finding Qualifying Loan Amount and Sales Price (Simple Example Excluding Tax/Insurance)

Given an interest rate of 7.5%, a term of 30 years, and the stored 28%:36% qualifying ratios, for what size loan and what sales price can a buyer qualify for if he or she makes $75,000 annually and has $500 in long-term monthly debt? The buyer plans to put $35,000 down. Also, what is the monthly (P&I) payment?

(Based on no Tax

and Insurance.)

STEPS KEYSTROKES DISPLAY

Clear registers s x “All Cleared” 0.00 Enter term in years 3 0 T 30.00 Enter annual interest 7 • 5 ˆ 7.50 Enter annual income 7 5 ) i 75,000.00 Enter monthly debt 5 0 0 D 500.00 Enter down payment 3 5 ) d 35,000.00 Display qualifying ratios q 28.00-36.00 Find qual. loan amount q “run” 250,280.85 Find price P 285,280.85 Find monthly P&I payment p 1,750.00

— DO NOT CLEAR CALCULATOR —

Re-qualify this buyer assuming $200 per month in additional debt.

STEPS KEYSTROKES DISPLAY

Enter new monthly debt 7 0 0 D 700.00 Display qualifying ratios q 28.00-36.00 Find new qual. loan amount

q “run” 221,677.32

Find new price P 256,677.32 Find new monthly P&I

payment p 1,550.00

Note: Press sbefore pressing qin these examples for Interest-Only qualifying.

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Qualifying Loan Amount and Sales Price (Complete Example Including Down Payment, Tax/Insurance, Monthly Association Dues)

The same buyers as in the previous example (who make $75,000 annually and have $500 in long-term monthly debt) wish to buy a lower-priced home and can only put $5,000 down. If you include estimated annual property taxes and insurance of 1.5% and 0.25%, respectively, a mortgage insurance rate of 0.6% and monthly homeowner’s association dues of $50, for what loan amount can they now qualify? What sales price can they afford? What’s their total payment?

(Again, using previously stored 7.5% interest, 30-year term and qualifying ratios of 28%:36%; if you’ve cleared or changed these values, please re-enter them.)

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter annual income 7 5 ) i 75,000.00 Enter monthly debt 5 0 0 D 500.00 Enter down payment 5 ) d 5,000.00 Set annual prop. tax rate 1 • 5 s 7 1.50 Set annual prop. ins. rate • 2 5 s 8 0.25 Set annual mortg. ins. rate • 6 s 9 0.60 Enter homeowner’s dues* 5 0 s D 50.00 Recall interest ® ˆ 7.50 Recall term ® T 30.00 Display qualifying ratios q 28.00-36.00 Find qualifying loan amount

q “run” 189,119.31

Find price P 194,119.31

— DO NOT CLEAR CALCULATOR —

Now find the monthly P&I payment, PITI payment, total payment, and interest-only payment:

STEPS KEYSTROKES DISPLAY

Find P&I payment p “run” 1,322.35 Find PITI payment p 1,700.00 Find total payment p 1,750.00 Find interest-only payment p 1,182.00

Note: Press sbefore pressing qin these examples for Interest-Only qualifying.

For Desktop Model (#43442) Users:

*Enter

5 0 A

on the Desktop model.

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ORTGAGEQUALIFIERPLUS®P

“Restricted” Qualifying

Buyers who make $68,000 annually and have $750 in long-term monthly debt wish to buy a home offered at $175,000. They again can only afford $5,000 for the down payment. For what maximum loan amount can they qualify?

Use previously stored 7.5% interest, 30-year term, Tax/Ins./MI rates of 1.5%, .25% and 0.6%, respectively, and qualifying ratios of 28%:36%. Re-enter 0.6% mortgage insurance rate, $50 assn. dues and $5,000 down. If you’ve cleared or changed these values, please re-enter them.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Recall interest* ® ˆ 7.50 Recall term* ® T 30.00 Recall annual prop. tax % ® 7 1.50 Recall annual prop. ins. % ® 8 0.25 Re-enter annual MI rate • 6 s 9 0.60 Enter homeowner’s dues* 5 0 s D 50.00 Enter down payment 5 ) d 5,000.00 Enter annual 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 “run” 137,725.41

— DO NOT CLEAR CALCULATOR —

Note: Press sbefore pressing qin these examples for Interest-Only qualifying.

For Desktop Model (#43442) Users:

*Enter

5 0 A

on the Desktop model.

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“Unrestricted” Qualifying

The amount calculated in the previous example is the loan they may qualify for, based on current income and debt. What are the buyer’s actual income and debt ratios? What does the “unrestricted” loan amount calculate to, and which side is it based on (i.e., buyer’s income or debt)? What is the buyer’s maximum allowable debt?

STEPS KEYSTROKES DISPLAY

Find actual ratios q “run” 22.76-36.00 Find “unrestricted”

loan amount q 170,870.75 LA INC*

Find allowable debt q 453.33

*The “INC” tells you this unrestricted Qualifying Loan Amount is based on the buyer’s Income Ratio — therefore, the restrictive Qualifying Loan Amount is based on the buyer’s Debt Ratio. This means that if they pay off their monthly debt (to $453/mo. or lower) they may qualify for a mortgage loan of approx. $170,000 or more and afford that $175,000 home (if they put approx. $4-$5K down).

58 — M

ORTGAGEQUALIFIERPLUS®P

Qualifying Comparison (Comparing 2 Different Loans or Ratios at Once)

Given a buyer’s annual income of $45,000, $500 in long-term monthly debt, estimated monthly homeowner’s association dues of $50, an interest rate of 7.25% and term of 30 years, what loan amounts can they qualify for based on both 28%:36% and 33%:40% ratios? Also, find the corresponding total monthly payment for each. Estimate property tax/insurance rates of 1.25% and .3%, respectively, and a mortgage insurance rate of .45%.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter annual income 4 5 ) i 45,000.00 Enter monthly debt 5 0 0 D 500.00 Enter monthly assn. dues* 5 0 s D 50.00 Enter interest 7 • 2 5 ˆ 7.25 Enter term 3 0 T 30.00 Enter property tax rate 1 • 2 5 s 7 1.25 Enter property ins. rate • 3 s 8 0.30 Enter mortgage ins. rate • 4 5 s 9 0.45 Display Qual 1 stored ratios

q 28.00-36.00

Find Qual 1 qualifying loan q “run” 94,245.94 Find Qual 1 P&I payment p 642.92 Find PITI payment p 800.00 Find total payment p 850.00 Find interest-only payment p 569.40

— DO NOT CLEAR CALCULATOR —

STEPS KEYSTROKES DISPLAY

Display Qual 2 stored ratios

Q 33.00-40.00

Find Qual 2 qualifying loan Q “run” 111,917.05 Find Qual 2 P&I payment p 763.47 Find PITI payment p 950.00 Find total payment p 1,000.00 Find interest-only payment p 676.17

Note: Press sbefore pressing qor Qin these examples for Interest-Only qualifying.

For Desktop Model (#43442) Users:

*Enter

5 0 A

on the Desktop model.

SER’SGUIDE

— 59

Finding Income Required and Allowable Monthly Debt

Using the 28%:36% ratios, how much income would a buyer need to finance a $250,000 home if they put 20% down? What is the maximum allowable debt? What is the dollar down payment and loan amount? What is the monthly payment? Use 6.75% interest for 30 years. Estimate property tax/insurance rates of 1.5% and 0.25%, respectively. Clear mortgage insurance rate to zero, as they are putting 20% down.

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter annual interest 6 • 7 5 ˆ 6.75 Enter term in years 3 0 T 30.00 Enter tax rate 1 • 5 s 7 1.50 Enter insurance rate • 2 5 s 8 0.25 Delete mortgage ins. rate 0 s 9 0.00 Enter sales price 2 5 0 ) P 250,000.00 Enter down payment % 2 0 d 20.00 Find dollar down payment d 50,000.00 Find loan amount l 200,000.00 Display qualifying ratios q 28.00-36.00 Find income required q “run” 71,219.12 Find maximum allowable

monthly debt q “run” 474.79 Find P&I payment p 1,297.20 Find PITI payment p 1,661.78

60 — M

ORTGAGEQUALIFIERPLUS®P

Solving for Actual Qualifying Ratios

A buyer who makes $120,000 annually and has $550 in long-term monthly debt wants to borrow $275,000 to purchase a home. He has $68,750 for the down payment and the property tax/insurance rates are estimated at 1.4% and 0.2%, respectively; monthly homeowner’s association dues at $65. Use 6.5% interest for 30 years. What are his actual ratios? What is the price of the home he can afford? What is the monthly payment?

STEPS KEYSTROKES DISPLAY

Clear calculator o o 0.00 Enter interest 6 • 5 ˆ 6.50 Enter term 3 0 T 30.00 Enter loan amount 2 7 5 ) l 275,000.00 Enter down payment 6 8 7 5 0 d 68,750.00 Enter annual income 1 2 0 ) i 120,000.00 Enter monthly debt 5 5 0 D 550.00 Enter property tax rate 1 • 4 s 7 1.40 Enter property ins. rate • 2 s 8 0.20 Clear mtg. ins. rate* 0 s 9 0.00 Enter monthly assn. dues** 6 5 s D 65.00 Display stored ratios q 28.00-36.00 Calculate actual ratios q “run” 22.62-28.12 Find sales price P 343,750.00 Find the P&I payment p 1,738.19 Find the PITI payment p 2,196.52 Find the total payment p 2,261.52

*Should be set to zero in this case, as the down payment is 20%; to check down payment percentage, press dagain and it will read 20.00%.

For Desktop Model (#43442) Users:

**Enter

6 5 A

on the Desktop model.

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PICK-A-PAYMENT AND COMBO LOANS

The following examples show you how to calculate P-A-P/EB P-A-P or Combo (1st/2nd Trust Deed) loans, in order to demonstrate the savings benefits to your clients. These loans can result in significant savings over traditional fixed-rate loans (with or without MI), during the first five years.

P-A-P loans start out with an extremely low, below-market interest rate, typically for 1, 3, 12, or 36 months, or a Zero-month P-A-P*, a popular option, where there is no waiting period. After this Start period, the rate adjusts to the fully indexed rate. The Start # of Months specifies how many months the payments will be applied to principal & interest, or fully amortized, at the low Start rate. Once the Start Period is over, the loan reverts to the Note rate and payments are no longer fully amortized, or the payments are only applied to interest (otherwise known as negative amortization).

*With the Zero-month P-A-P, interest starts compounding at the full Note rate immediately (there is no waiting period) and the loan immediately accrues deferred interest. However, the initial payment is still much lower than a fixed-rate loan, and therefore this loan also results in notable Investment Savings.

In a P-A-P, the payments during the initial years can be extremely low. The payment increase is limited to the designated Payment Cap percentage limit over the selected Recast Period. After the Recast Period, the loan is recalculated based on the remaining balance, Note%, and remaining P-A-P term.

With a P-A-P, the Start Period is like having a fixed loan at a very low rate because the payments during this period are fully amortized. This type of loan results in significant savings in monthly payments over a regular fixed loan during the first five years** of the loan. One can compare various investment scenarios by entering a desired ROI% (e.g., a 7% or 10% rate of return).

**While it is most common to find the P-A-P/EB P-A-P savings for the first five years, the calculator also allows you to find the savings for less than five years. For example, to find savings for the first three years, enter

3 ∏

3 e

and continue

with the regular P-A-P/EB P-A-P calculations.

The calculator also includes Recast Preference Settings for P-A-P loans, which allow you to select the Recast Period (1-15 years) for each type of P-A-P (for 0, 1, 3, 12, or other Start Months, e.g., a 5-month Start). A36 Start Month has a recast period range of 3-15 years. These modifications allow greater flexibility of how the cash flows are calculated by allowing the user to select the recasting period for a specific loan, as well as reducing the keystroke sequence for calculating a P-A-P loan based upon a specified payment.

(Cont’d)

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ORTGAGEQUALIFIERPLUS®P

(Cont’d)

Additionally, besides the entry of a Start Rate, the calculator allows the entry of a Start Payment for purposes of performing a “Pick-APayment” type of P-A-P loan. The user can also toggle between the entered Start Payment and Start Rate (the calculator will calculate the Start interest rate based on the entered Start Payment and other entered loan variables).

The benefit of Combo loans over single, fixed-rate loans with mortgage insurance is that the buyer can actually save money obtaining two loans vs. a single, larger loan requiring monthly mortgage insurance. This calculator will find the 1st and 2nd TD loan amounts and payments, the savings over the single loan with mortgage insurance, the equivalent interest rates for both the 1st and 2nd static combo loans and the larger loan with MI, and compute the term reduction of the 2nd TD if the savings were applied to the 2nd TD. The calculator will also do a stand alone 1st and 2nd without having to compare to a fixed loan with MI.

The Combo P-A-Ps/EB P-A-Ps are highly complex; thus, only 1st TD/2nd TD loan amounts and payments and total loan cost can be shown. In addition, the calculator will display the adjusted 2nd TD term if the savings were applied to paying off the 2nd TD loan.

Pick-A-Payment Loan (Zero-Month/30-Term) vs. Standard Fixed-Rate Loan —

Entering Starting Payment

You’d like to show your client the Investment Savings of a Zeromonth/30-term P-A-P (10-year recast) loan with a Starting Payment of $1,000.00 over that of a fixed-rate loan. Find the P-A-P loan payments, the 5-year investment savings (based on a 10% ROI), and the total cost of the loan (total principal and interest). Also, find the 5-year investment savings based on a lower ROI% of 6.5%.

Note: In a Zero-month P-A-P, the interest starts compounding at the full Note rate immediately (there is no waiting period). However, the initial payments are still very low.

You have the following loan parameters:

FIXED-RATE LOAN P-A-P LOAN

Loan Amount 250,000 250,000 Interest 6.00% $1,000

(Start Payment)

–

(Note%)

Term 30 0

(Start No. of Mo.’s)

–

30 years

ROI% -- 10%

(default*)

and 6.5%

Pmt Cap % -- 7.50%

(default**)

(Cont’d)

SER’SGUIDE

— 63

(Cont’d)

*ROI: You can set a new ROI at any time by entering a new value, e.g., 8% ROI, enter

8 s %

. Just remember this value is stored permanently, or you must enter

a new value or perform a Clear All

s x

to reset. To recall the stored value, press

® s %

ROI Comparison Shortcut: Or, once you’ve set up a P-A-Pproblem and calculated investment savings based on an initial entered (or stored) ROI%, you may quickly find the savings based on a new ROI% – and skip all other P-A-P calculations – by entering the new ROI% (e.g.,

7 %

), and pressing the ∏key (see Step #6).

**Payment Cap: You can set a new Payment Cap at any time by simply entering a new value, e.g., 6% Payment Cap, enter

6 s 6

. This is also stored permanently.

To recall the stored value, press

® s 6

STEPS KEYSTROKES DISPLAY

Enter Fixed-Rate Loan Values:

Clear calculator o o 0.00 Enter loan amount 2 5 0 ) l 250,000.00 Enter interest rate 6 ˆ 6.00 Enter term 3 0 T 30.00

Solve for Fixed-Rate Loan Payment and Total Cost:

Find monthly P&I payment

p 1,498.88

Amortize the loan a 1-360

Find total interest a 289,595.47 Find total principal a 250,000.00 Find total principal/interest

a 539,595.47

Enter P-A-P Loan Values:

Enter Start Rate term

(in months) 0 ß 0.00

Enter P-A-P term

(in years) 3 0 s ß 30.00 Enter Start Payment 1 0 0 0 S 1,000.00 Find Start % S 2.59 Enter P-A-P actual rate

(Note%) 5 s S 5.00 Enter ROI% 1 0 s % 10.00 Enter Payment Cap% 7 • 5 s 6 7.50

(Cont’d)

64 — M

ORTGAGEQUALIFIERPLUS®P

(Cont’d)

STEPS KEYSTROKES DISPLAY

Find the First Five P-A-P Payments:

* Find 1st year payment ∏ 1,000.00 Find 2nd year payment ∏ 1,075.00 Find 3rd year payment ∏ 1,155.63 Find 4th year payment ∏ 1,242.30 Find 5th year payment ∏ 1,335.47

Find 5-Year P-A-P Savings (with no ROI% applied), 5-Year ROI%

Savings (based on entered ROI%), and Total Cost:

Display savings/ROI%

range ∏ 1-5**

Display savings (no ROI%)

∏ 20,231.89*** Display stored ROI% ∏ 10.00 Find ROI savings ∏ 27,395.71*** Display range for

P-A-P calculations ∏ 1-30

Display total principal and

interest ∏ 494,825.13*** Display total interest ∏ 244,825.13 Display balance at end

of range ∏ 0.00

Enter a lower ROI% of 6.5% (versus above 10%) and Recalculate

the 5-Year Investment Savings:

Enter 6.5% ROI% 6 • 5 % ∏ 6.50 Find ROI Savings ∏ 24,596.54***

*To change the display of P-A-P payments to show all payments, please refer to the Preference Settings. To change the recast period of your P-A-P loan, please refer to the Preference Settings (default recast for Zero-month P-A-P is 10 years).

**To Change 5-Year Savings Range: You may calculate the P-A-P/EB P-A-P savings and ROI% investment savings for less than the first five years (the default setting) by simply entering the year and then pressing the ∏or ekey. For example, to find the savings for the first three years, enter

3 ∏

3 e

and continue pressing

the ∏or ekeys, as above. ***Note that, in this example, the total cost of the P-A-P loan is lower than the fixed-

rate loan (approx. $44.7K less), and the initial savings is high, at over $20K. The ROI% savings is even higher — at a desired ROI% of 10%, the return is over $27K. At 6.5% the return is over $24K.

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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

You’d like to show your client the savings of a Zero-month/30-term P-A-P loan with a starting interest rate of 3.95% over that of a fixed-rate loan. Find the P-A-P loan payments for a 10-year recast, the 5-year P-A-P savings and ROI% investment savings, and the total cost of the loan. Lower the ROI from 10% to 7% and the Payment Cap% from 7.5% to 5%. Also, in this problem, find the interest-only payment, the 30- and 15-year loan payments (based on the P-A-P Note%). Additionally, find the deferred interest (resulting from negative amortization).

You have the following loan parameters:

FIXED-RATE LOAN P-A-P LOAN

Loan Amount 300,000 300,000 Interest/Start Payment

7.5% 3.95%

(Start%)

7.50%

(Note%)

Term 30 0

(Start No. of Mo.’s)

30 years

ROI% -- 7% Pmt Cap % -- 5%

STEPS KEYSTROKES DISPLAY

Enter Fixed-Rate Loan Values:

Clear All s x “All Cleared” 0.00 Enter loan amount 3 0 0 ) l 300,000.00 Enter interest rate 7 • 5 ˆ 7.50 Enter term 3 0 T 30.00

Solve for Fixed-Rate Loan Payment and Total Cost:

Find monthly P&I payment

p 2,097.64

Amortize the loan a 1-360

Find total interest a 455,151.67 Find total principal a 300,000.00 Find total principal/interest

a 755,151.67*

Enter P-A-P Loan Values:

Enter Start Rate term

(in months) 0 ß 0.00

Enter P-A-P term

(in years) 3 0 s ß 30.00 Enter Start interest % 3 • 9 5 S 3.95 Calculate Start Payment

S 1,423.61

Enter P-A-P actual rate

(Note%) 7 • 5 s S 7.50 Enter ROI% 7 s % 7.00 Enter Payment Cap% 5 s 6 5.00

(Cont’d)

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ORTGAGEQUALIFIERPLUS®P

(Cont’d)

STEPS KEYSTROKES DISPLAY

Find the First Five P-A-P Payments:

Find 1st year payment ∏ 1,423.61 Find 2nd year payment ∏ 1,494.79 Find 3rd year payment ∏ 1,569.53 Find 4th year payment ∏ 1,648.01 Find 5th year payment ∏ 1,730.41

Find 5-year P-A-P Savings (with no ROI% applied), 5-year ROI%

Savings (based on entered ROI%), and Total Cost:

Display savings/ROI%

range ∏ 1-5 Find savings (no ROI%) ∏ 31,462.37* Display stored ROI% ∏ 7.00 Find ROI savings ∏ 38,305.19* Display range for

P-A-P calculations ∏ 1-30 Find total prin./interest ∏ 842,120.24* Find total interest ∏ 542,120.24 Find balance at end

of range ∏ 0.00

Find Start Payment for Year 1, Interest-Only Payment, 30-Year and

15-Year Payments (all based on P-A-PNote%) and P-A-P Deferred Interest:

Display start payment s ∏ 1,423.61 Find interest-only

payment ∏ 1,875.00 Find 30-yr loan payment ∏ 2,097.64 Find 15-yr loan payment ∏ 2,781.04 Find deferred interest ∏ 451.39

Find the Total Investment Return over 30 years:

** Clear calculator o o 0.00 Enter 5-year ROI as

present value 3 8 3 0 5 • 1 9 l 38,305.19

Enter ROI% as

interest rate 7 ˆ 7.00

Enter the rem. term

after 5 years 2 5 T 25.00

Find the value of the

investment s l 219,313.23

(Cont’d)

SER’SGUIDE

— 67

(Cont’d)

Total payments of traditional fixed-rate loan: 755,151.67 Total payments of P-A-P loan: 842,120.24 Total return with investment: 219,313.23

*Note that, in this case, the total cost of the P-A-P loan is higher than the fixed-rate loan; however, the initial savings is significant, at over $30K. At an entered ROI% of 7%, the return is over $38K.

**Additionally, while the P-A-Ppayments exceed the traditional fixed-rate loan by $86,968, the investment return on the P-A-P cash flow is $219,313.23.

IMPORTANT: Be sure to change the P-A-P Recast setting via the Preference Settings if you’re calculating a P-A-P loan with a different recast period (other than the default of 10 years) for the Zero-month P-A-P loan. See Preference Settings.

In addition, to change the display of P-A-P payments (i.e., to display all payments instead of only displaying the first five payments), see the Preference Settings.

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ORTGAGEQUALIFIERPLUS®P

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

FIXED-RATE LOAN EB P-A-P LOAN

Loan Amount 300,000 300,000 Interest/Start Payment

7.5% $1,500

(Start Payment)

7.50%

(Note%)

Term 30 0

(Start No. of Mo.’s)

30 years

ROI% -- 7% Pmt Cap % -- 5%

Using most of the same values from the previous example, compare the fixed-rate loan to an Equity Builder P-A-P loan. The start payment for the regular P-A-P loan is $1,500, and the resulting initial EB P-A-P payment is $750. Also, in this problem, find the interest-only payment, and the 30- and 15-year loan payments (based on the EB PA-P Note%), as well as the EB P-A-P deferred interest (resulting from negative amortization).

STEPS KEYSTROKES DISPLAY

Enter Fixed-Rate Loan Values:

Clear Calculator o o 0.00 Enter loan amount 3 0 0 ) l 300,000.00 Enter interest rate 7 • 5 ˆ 7.50 Enter term 3 0 T 30.00

Solve for Fixed-Rate Loan Payment and Total Cost:

Find monthly P&I payment

p 2,097.64

Amortize the loan a 1-360

Find total interest a 455,151.67 Find total principal a 300,000.00 Find total principal/interest

a 755,151.67*

Enter EB P-A-P Loan Values:

Enter Start Rate term

(in months) 0 ß 0.00

Enter P-A-P term

(in years) 3 0 s ß 30.00 Enter Start Payment 1 5 0 0 S 1,500.00 Calculate Start interest %

S 4.39

Enter P-A-P actual rate

(Note%) 7 • 5 s S 7.50 Enter ROI% 7 s % 7.00 Enter Payment Cap% 5 s 6 5.00

(Cont’d)

SER’SGUIDE

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(Cont’d)

STEPS KEYSTROKES DISPLAY

Find the First Five EB P-A-P Payments:

Find 1st year payment e 750.00 Find 2nd year payment e 787.50 Find 3rd year payment e 826.88 Find 4th year payment e 868.22 Find 5th year payment e 911.63

Find 5-year EB P-A-P Savings (with no ROI% applied), 5-year

ROI% Savings (based on entered ROI%), and Total Cost:

Display savings/ROI%

range e 1-5 Find savings (no ROI%) e 18,108.80* Display stored ROI% e 7.00 Find ROI savings e 22,479.57* Display range for

EB P-A-P calculations e 1-23 Find total principal/interest

e 688,901.46* Find total interest e 388,901.46 Display balance at end

of range e 0.00

Find Start Payment for Year 1, Interest-Only Payment, 30-Year and

15-Year Payments (based on EB P-A-PNote%), and EB P-A-P Deferred Interest:

Display start payment s e 750.00 Find interest-only payment

e 865.38

Find 30-yr payment e 1,048.82 Find 15-yr payment e 1,390.52 Find deferred interest e 115.38

*Note that, in this example, the total cost of the EB P-A-P loan is lower than the fixedrate loan, and the initial savings is still significant, at over $18K.

EB P-A-P calculations may take several seconds.

IMPORTANT: Be sure to change the P-A-P Recast setting via the Preference Settings if you’re calculating a P-A-P loan with a recast period different than the default of 10 years for a Zeromonth P-A-P zero loan. See Preference Settings.

In addition, to change the display of P-A-P payments (i.e., to display all payments instead of just displaying the first five payments), see the Preference Settings.

70 — M

ORTGAGEQUALIFIERPLUS®P

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)

You’d like to show your client the savings of a 3-month/30-term P-A-P loan over that of a fixed-rate loan. Find the savings and amortize for the first three years only. Also, find the P-A-P payments for years 1-3.

Note: Change the existing ROI% and Payment Cap%.

FIXED-RATE LOAN P-A-P LOAN

Loan Amount 300,000 300,000 Interest/Start Rate

7.00% 2.95%

(Start %)

(Note%)

Term 30 3

(Start No. of Mo.’s)

30 years

ROI% -- 6.5% Pmt Cap % -- 7%

STEPS KEYSTROKES DISPLAY

Enter Fixed-Rate Loan Values:

Clear All s x “All Cleared” 0.00 Enter loan amount 3 0 0 ) l 300,000.00 Enter interest rate 7 ˆ 7.00 Enter term 3 0 T 30.00

Solve for Fixed-Rate Loan Payment and Total Cost:

Find monthly P&I payment

p 1,995.91

Amortize the loan 1 : 3 a 1-36

Find total interest a 62,033.56 Find total principal a 9,819.11 Find total principal/interest

a 71,852.67

Find remaining balance a 290,180.89 Find remaining term a 27.00

Enter P-A-P Loan Values:

Enter Start Rate 2 • 9 5 S 2.95 Enter P-A-P actual rate

(Note%) 5 s S 5.00

Enter Start Rate term

(in months) 3 ß 3.00

Enter P-A-P term

(in years) 3 0 s ß 30.00 Enter ROI% 6 • 5 s % 6.50 Enter Payment Cap% 7 s 6 7.00

(Cont’d)

SER’SGUIDE

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(Cont’d)

STEPS KEYSTROKES DISPLAY

Calculate P-A-P Savings & ROI for the First 3 Years*:

Display range for savings and

ROI calculations 3 ∏ 1-3 Find 3-year savings ∏ 23,369.28 Re-display ROI% ∏ “run” 6.50 Find 3-year ROI ∏ 25,882.55

Amortize the P-A-P for the First 3 Years Only:

Display amortization range for

first three years ∏ 1-3 Display total prin./interest

∏ 48,483.39

Display total interest ∏ 43,082.95 Display balance at end

of three years ∏ 294,599.56

Find the P-A-P Payments for Years 1-3:

Find 1st year payment ∏ 1,256.74 Find 2nd year payment ∏ 1,344.71 Find 3rd year payment ∏ 1,438.84

Calculate P-A-P Savings & ROI for the First 5 Years and Amortize the P-A-P for years 1-8*:

Display range for savings &

ROI calculations 8 ∏ 1-5 Find 5-year savings ∏ 33,028.48 Re-display ROI% ∏ “run” 6.50 Find 5-year ROI ∏ 39,795.55 Display amortization range for entered

eight year range ∏ 1-8 Display total prin./interest

∏ 146,792.63

Display total interest ∏ 113,635.68 Display balance at end

of eight years ∏ 266,843.05

*Your calculator finds P-A-PSavings & ROI for the first five years only. To find the P-A-P Savings and ROI for the first three years, enter

3 ∏

3 e

, which will calculate the P-A-P or EB P-A-P loans for years 1-3. However, amortization may be calculated for any term. For example,

8 ∏

8 e

will still calculate the P-A-P

Savings & ROI for years 1-5 only, but will amortize the loan for years 1-8. If you need to find the ROI for a value greater than 5 years (e.g., 8 years), simply use

the Future Value function. Enter the 5-year value into l, remaining term (3 years) into T, and the ROI% into ˆ. Then, solve for Future Value (ROI for 8 years) by pressing

s l

72 — M

ORTGAGEQUALIFIERPLUS®P

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

Find the Combo Loan blended interest rate, combined payment, and 1st and 2nd loan amounts and payments, if you have the following parameters:

FIXED-RATE COMBO LOAN (1st TD – 2nd TD)

Loan Amount 100,000 Interest 8% – 10% Term 30 year – 10 year LTV 80%:10%

(Default)

STEPS KEYSTROKES DISPLAY

Enter Combo Loan Values:

Clear All s x 0.00 Enter loan amount 1 0 0 ) l 100,000.00 Enter 1st TD Interest:Term

8 : 3 0 ! 8.00-30.00

Enter 2nd TD Interest:Term

1 0 : 1 0 s ! 10.00-10.00

Recall 1st:2nd LTV ® s d 80.00-10.00

Find Combo Loan Values:

Find 1st:2nd combined

interest rate** s 5 8.11

Find total combined (1st/2nd)

payment 5 799.07

Find 1st TD loan amount

5 88,888.89

Find 2nd TD loan amount

5 11,111.11

Find 1st P&I payment 5 652.24 Find 2nd P&I payment 5 146.83 Display LTV 5 80.00-10.00*

*A different LTV can be entered prior to calculating a combo loan (e.g.,

8 0 : 1 5

s 5

) without replacing the stored LTV. This allows for a comparison of different

Loan-to-Value ratios. Note: To calculate Interest-Only 2nd Trust Deed Combo Loans on model 3442, press

the 4key instead of the 5key in Step 2 of the above example.

For Desktop Model (#43442) Users:

**Press the Bkey for Desktop Model. Note: Press

before pressing Bto calculate Interest-Only 2nd Trust Deed

Combo Loans.

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Combo Loan vs. Fixed-Rate Loan with MI

You’d like to show your client the savings of a fixed-rate Combo Loan over that of a standard, fixed-rate loan with MI. You have the following parameters:

FIXED-RATE FIXED-RATE COMBO LOAN LOAN w/MI (1st TD – 2nd TD)

Price 100,000 100,000 Interest 7% 7% – 9% Term 30 30 year – 30 year MI 0.5% -- LTV 90% 80% – 10%

(Default)

STEPS KEYSTROKES DISPLAY

Enter Fixed-Rate Loan Values and Find Total Payment:

Clear calculator o o 0.00 Enter price 1 0 0 ) P 100,000.00 Enter down payment 1 0 d 10.00 Enter interest 7 ˆ 7.00 Enter term 3 0 T 30.00 Enter MI (mortgage

insurance) value • 5 s 9 0.50 Clear Tax register 0 s 7 0.00 Clear Insurance register 0 s 8 0.00 Solve for P&I payment p 598.77 Solve for PITI payment

(with MI) p 636.27

Enter Fixed-Rate Combo Loan Values:

Enter 1st TD Interest:Term

7 : 3 0 ! 7.00-30.00

Enter 2nd TD Interest:Term

9 : 3 0 s ! 9.00-30.00

Recall 1st:2nd LTV ® s d 80.00-10.00

Find Blended Interest Rate, Fixed-Loan MI Rate, Combo Loan

(1st/2nd TD) Payment, Monthly Savings, Adjusted Term of 2nd TD (if savings applied), and 1st/2nd Loan Amounts and Payments:

Find 1st:2nd blended

interest rate ** s 5 7.23 Find equivalent fixed-rate loan

interest rate 5 7.61 Find total combined (1st/2nd)

payment 5 612.70

(Cont’d)

74 — M

ORTGAGEQUALIFIERPLUS®P

(Cont’d)

STEPS KEYSTROKES DISPLAY

Find equivalent fixed-rate loan

payment 5 636.27

Find monthly savings over single

fixed-rate loan w/MI 5 23.57

Find adjusted 2nd term (if savings

applied to 2nd loan) 5 14.23

Find 1st TD loan amount

5 80,000.00

Find 2nd TD loan amount

5 10,000.00

Find 1st TD monthly pmt

5 532.24

Find 2nd TD mo. payment

5 80.46

Display LTV 5 80.00-10.00*

*A different LTV can be entered prior to calculating a combo loan (e.g.,

8 0 : 1 5

s 5

) without replacing the stored LTV. This allows for a comparison of different

Loan-to-Value ratios. Note: To calculate Interest-Only 2nd Trust Deed Combo Loans on model 3442, press

the 4key instead of the 5key in Step 3 of the above example.

For Desktop Model (#43442) Users:

**Press the Bkey for Desktop Model. Press sbefore pressing Bto calculate Interest-Only 2nd Trust Deed Combo

Loans.

Combo Loan —

Storing a New LTV

You’d like to show your client the savings of a fixed-rate Combo Loan over that of a standard, fixed-rate loan with MI. The LTV for the 1st/2nd TD is 90/10. See the following parameters:

FIXED-RATE FIXED-RATE COMBO LOAN LOAN w/MI (1st TD – 2nd TD)

Price 100,000 100,000 Interest 7% 7% – 9% Term 30 30 year – 30 year MI 0.5% -- LTV 90% 80% – 10%

(Cont’d)

SER’SGUIDE

— 75

(Cont’d)

STEPS KEYSTROKES DISPLAY

Enter Fixed-Rate Loan Values and Find Total Payment:

Clear calculator o o 0.00 Enter price 1 0 0 ) P 100,000.00 Enter down payment 1 0 d 10.00 Enter interest 7 ˆ 7.00 Enter term 3 0 T 30.00 Enter MI (mortgage

insurance) value • 5 s 9 0.50 Clear Tax register 0 s 7 0.00 Clear Insurance register 0 s 8 0.00 Solve for P&I payment p 598.77 Solve for PITI payment

(with MI) p 636.27

Enter Fixed-Rate Combo Loan Values:

Enter 1st TD Interest:Term

7 : 3 0 ! 7.00-30.00

Enter 2nd TD Interest:Term

9 : 3 0 s ! 9.00-30.00

Enter new 1st:2nd LTV 8 0 : 1 0 s d 80.00-10.00

Calculate the Loan Comparison:

Find 1st:2nd blended

interest rate* s 5 7.23 Find equivalent fixed-rate loan

interest rate 5 7.61 Find total combined (1st/2nd)

payment 5 612.70 Find equivalent fixed-rate loan

payment 5 636.27 Find monthly savings over single

fixed-rate loan w/MI 5 23.57 Find adjusted 2nd term (if savings

applied to 2nd loan) 5 14.23 Find 1st TD loan amount

5 80,000.00

Find 2nd TD loan amount

5 10,000.00

Find 1st TD monthly pmt

5 532.24

Find 2nd TD mo. payment

5 80.46

Re-display LTV 5 80.00-10.00

Note: To calculate Interest-Only 2nd Trust Deed Combo Loans on model 3442, press the 4key instead of the 5key in Step 3 of the above example.

For Desktop Model (#43442) Users:

**Press the Bkey for Desktop Model. Press sbefore pressing Bto calculate Interest-Only 2nd Trust Deed Combo Loans.

76 — M

ORTGAGEQUALIFIERPLUS®P

Pick-A-Payment (3-Month/30-Term) Combo Loan vs. Fixed-Rate Loan w/MI

You’d like to show your client the savings of a P-A-P Combo Loan over that of a fixed-rate loan with MI. Find the P-A-P Combo (1st TD/2nd TD) loan amounts, payments and total cost, if you have the following parameters:

FIXED-RATE P-A-P COMBO LOAN w/MI (1st TD – 2nd TD)

Loan Amount 90,000 90,000 Interest 8.50% 1st: 4.95% – 8.00%

2nd: 11.50%

Term 30 1st: 3 mo – 30 yr 2nd: 30 yr MI 0.62% -- LTV 95% 80% – 15%

STEPS KEYSTROKES DISPLAY

Enter Fixed-Rate Loan Values:

Clear calculator o o 0.00 Enter loan amount 9 0 ) l 90,000.00 Enter interest 8 • 5 ˆ 8.50 Enter term 3 0 T 30.00 Enter MI value • 6 2 s 9 0.62

Solve for Fixed-Rate Loan Payment and Total Cost:

Solve for P&I payment p 692.02 Solve for PITI payment

(incl. MI) p 738.52

Amortize the loan a 1-360

Find total interest a 159,127.97* Find total principal a 90,000.00 Find total principal/interest

a 249,127.97

Enter P-A-P Combo Loan Values:

Enter 1st TD-P-A-P

Start Rate 4 • 9 5 S 4.95 Enter P-A-P actual rate 8 s S 8.00 Enter P-A-P Start Rate

term (in months) 3 ß 3.00 Enter P-A-P term

(in years) 3 0 s ß 30.00 Enter 2nd TD Interest:Term

1 1 • 5 : 3 0 s !

11.50-30.00

Enter 1st:2nd LTV values

8 0 : 1 5 s d 80.00-15.00

(Cont’d)

SER’SGUIDE

— 77

(Cont’d)

STEPS KEYSTROKES DISPLAY

Find 1st TD Payments:

Find 1st year payment N 404.54 Find 2nd year payment N 434.88 Find 3rd year payment N 467.50 Find 4th year payment N 502.56 Find 5th year payment N 540.25

Find 1st TD Loan Amount:

N 75,789.47

Find 1st TD Total Cost:

Find 1st TD total

principal and interest N 208,642.62 Find 1st TD total interest N 132,853.15* Find 1st TD rem. balance

N 0.00

Find 2nd TD Loan Amount:

N 14,210.53

Find 2nd TD Payment:

N 140.73

Find 2nd TD Total Cost:

Find 2nd TD total

principal and interest* N 19,387.76 Find 2nd TD total interest

N 5,177.23*

Find 2nd TD rem. balance

N 0.00

Find 2nd TD adjusted term

(if savings of 1st TD applied

to 2nd TD) N 6.94

*Notice the total interest paid for the P-A-P Combo loan ($138,030.38) is $21K less than the fixed-rate loan interest ($159,127.97).

78 — M

ORTGAGEQUALIFIERPLUS®P

Equity Builder Pick-A-Payment (3-Month/30-Term) Combo Loan vs. Fixed-Rate Loan w/MI

Now show your client the savings of a EB P-A-P Combo Loan over that of a fixed-rate loan with MI. Find the EB P-A-P Combo (1st TD/2nd TD) loan amounts, payments and total cost, if you have the following parameters:

FIXED-RATE EB P-A-P COMBO LOAN LOAN w/MI (1st TD – 2nd TD)

Loan Amount 90,000 90,000 Interest 8.50% 1st: 4.95% – 8.00%

2nd: 11.50%

Term 30 1st: 3 mo – 30 yr 2nd: 30 yr MI 0.62% -- LTV 95% 80% – 15%

STEPS KEYSTROKES DISPLAY

Enter Fixed-Rate Loan Values and Solve for Total Payment:

(SKIP IF ALREADY ENTERED):

Clear calculator o o 0.00 Enter loan amount 9 0 ) l 90,000.00 Enter fixed loan interest 8 • 5 ˆ 8.50 Enter fixed loan term 3 0 T 30.00 Enter MI (mortgage

insurance) value • 6 2 s 9 0.62

Solve for Fixed-Rate Loan Payment and Total Cost:

Solve for P&I payment p 692.02 Solve for PITI payment

(incl. MI) p 738.52

Amortize the loan a 1-360

Find total interest a 159,127.97* Find total principal a 90,000.00 Find total principal/interest

a 249,127.97

Enter EB P-A-P Combo Loan Values

(SKIP IF ALREADY ENTERED):

Enter 1st TD-P-A-P

Start Rate 4 • 9 5 S 4.95

Enter P-A-P actual rate

8 s S 8.00

Enter P-A-P Start Rate

term (in months) 3 ß 3.00

Enter P-A-P term

(in years) 3 0 s ß 30.00

(Cont’d)

SER’SGUIDE

— 79

(Cont’d)

STEPS KEYSTROKES DISPLAY

Enter 2nd TD Interest:Term

1 1 • 5 : 3 0 s !

11.50-30.00

Enter 1st:2nd LTV values

8 0 : 1 5 s d 80.00-15.00

Find 1st TD Payments:

Find 1st year payment s N 202.27 Find 2nd year payment N 217.44 Find 3rd year payment N 233.75 Find 4th year payment N 251.28 Find 5th year payment N 270.13

Find 1st TD Loan Amount:

N 75,789.47

Find 1st TD Total Cost:

Find total principal/interest

N 171,517.97

Find total interest N 95,728.50* Find remaining balance N 0.00

Find 2nd TD Loan Amount:

N 14,210.53

Find 2nd TD Payment:

N 140.73

Find 2nd TD Total Cost:

Find 2nd TD total

principal and interest N 21,558.70 Find total interest N 7,348.17* Find remaining balance N 0.00 Find 2nd TD adjusted term

(if savings of 1st TD

applied to 2nd TD) N 9.62

*Notice the EB P-A-P Combo loan’s total interest ($103,076.67) is approximately $56k less than the fixed-rate loan’s total interest of $159,127.97.

80 — M

ORTGAGEQUALIFIERPLUS®P

Default Settings

Performing a total Reset (see next page) will return the calculator to the following default settings:

• Two Fixed Decimal Places

• 12 Periods per Year = Reset to 12 Upon O

• Property Ins. = Based on Price

• Property Tax/Ins. = Values Cleared Upon O

• Mortgage Ins. = Values Cleared Upon o o

• Amortization Range = Specified Year (Ent-Ent)

• Qualifying Ratios Displayed 1st

• Beginning/End Mode = End

• P-A-P Payment Cutoff = 5 Years

• 0 M Recast 10

• 1 M Recast 10

• 3 M Recast 5

• 12 M Recast 5

• 36 M Recast 5

• ALT Recast 5

• Month Offset to January (1)

• Tax Bracket = 21%

• Qual 1 Ratios = 28%-36%

• Qual 2 Ratios = 33%-40%

• P-A-P ROI% = 10%

• P-A-P/EB P-A-P Savings = Years 1-5

• ROI% Investment Savings = Years 1-5

• P-A-P Pmt Cap% = 7.5%

• P-A-P Teaser Term = 0 Month

• Combo Loan 1st:2nd LTV = 80.00%-10.00%

Error Codes

With an incorrect entry or answer beyond the range of the calculator, the display will show one of the following error messages. To clear an error, simply press any key.

OFLO — Number Too Large to Display DIV Error — Attempted to Divide by Zero TVM Error — Time-Value-of-Money Error ENT Error — Invalid Entry PPY Error — Payments Per Year Error QL Error — Qualifying Error NTE Error — P-A-P Note Error

APPENDIX

SER’SGUIDE

— 81

Auto Shut-Off

Your calculator is designed to shut itself off after about 8-12 minutes of non-use.

Batteries

•

Mortgage Qualifier Plus

(#3442)

Two LR-44 batteries.

•

Mortgage Qualifier Plus

Desktop

(#43442)

One 3-Volt Lithium CR-2032 battery.

Replacing the Battery(ies)

Should your calculator display become very dim or erratic, replace the battery(ies).

Note: Please use caution when disposing of your old battery, as it contains hazardous chemicals.

Replacement batteries are available at most discount or electronics stores. You may also call Calculated Industries at 1-775-885-4975.

Battery Replacement Instructions

•

Mortgage Qualifier Plus

(#3442) To replace the batteries, slide open the battery door (at top backside of unit) and replace with new batteries. Make sure the batteries are facing positive side up.

•

Mortgage Qualifier Plus

Desktop

(#43442) To replace the battery, use a small Phillips’ head screwdriver and unscrew the two (2) screws on the base of the unit. Carefully remove the lower back housing. Remove the battery from the clip and replace it with a new battery, with the positive side up. Then replace the backplate and reattach the screws.

82 — M

ORTGAGEQUALIFIERPLUS®P

Reset

Manual Reset

If your calculator’s display should ever freeze or “lock up,” press Reset — a small hole located to the left of the O key — to perform a total reset. (It is recommended you use a straightened paper clip, as the hole is extremely small).

Keystroke Reset—Returning the Calculator to its Original Factory Settings

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.

Repair and Return

Warranty, Repair and Return Information! Return Guidelines:

1. Please read the

Warranty

in this User’s Guide to determine if your Calculated Industries calculator, measuring device or electronic tool remains under warranty before calling or returning any device for evaluation or repairs.

2. If your calculator won’t turn on, try pressing the “Reset Button” first. If it still won’t turn on, check the batteries as outlined in the User’s Guide.

3. If there is a black spot on the LCD screen, THIS IS NOT A WARRANTY DEFECT. The unit can be repaired. Call for a repair quote before returning your unit.

4. If you need more assistance, please go to our website at

www.calculated.com and click on Product Support, then Repair FAQs.

5. If you believe you need to return your calculator, please speak to a Calculated Industries representative for additional information!

Call Toll Free: 1-800-854-8075

SER’SGUIDE

— 83

Warranty

Warranty Repair Service – U.S.A.

Calculated Industries (“CI”) warrants this product against defects in materials and workmanship for a period of one (1) year from the date of original consumer purchase in the U.S. If a defect exists during the warranty period, CI at its option will either repair (using new or remanufactured parts) or replace (with a new or remanufactured calculator) the product at no charge.

THE WARRANTY WILL NOT APPLY TO THE PRODUCT IF IT HAS BEEN DAMAGED BY MISUSE, ALTERATION, ACCIDENT, IMPROPER HANDLING OR OPERATION, OR IF UNAUTHORIZED REPAIRS ARE ATTEMPTED OR MADE. SOME EXAMPLES OF DAMAGES NOT COVERED BY WARRANTY INCLUDE, BUT ARE NOT LIMITED TO, BATTERY LEAKAGE, BENDING, OR VISIBLE CRACKING OF THE LCD, WHICH ARE PRESUMED TO BE DAMAGES RESULTING FROM MISUSE OR ABUSE.

To obtain warranty service in the U.S., ship the product postage paid to Calculated Industries (address listed on the last page). Please provide an explanation of the service requirement, your name, address, day phone number and dated proof of purchase (typically a sales receipt). If the product is over 90 days old, include payment of $7.95 for return shipping and handling within the contiguous 48 states. (Outside the contiguous 48 states, please call CI for return shipping costs.)

A repaired or replacement product assumes the remaining warranty of the original product or 90 days, whichever is longer.

Non-Warranty Repair Service – U.S.A.

Non-warranty repair covers service beyond the warranty period or service requested due to damage resulting from misuse or abuse.

Contact Calculated Industries (phone number listed on the last page), to obtain current product repair information and charges. Repairs are guaranteed for 90 days.

Repair Service – Outside the U.S.A.

To obtain warranty or non-warranty repair service for goods purchased outside the U.S., contact the dealer through which you initially purchased the product. If you cannot reasonably have the product repaired in your area, you may contact CI to obtain current product repair information and charges, including freight and duties.

Disclaimer

CI MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE PRODUCT’S QUALITY, PERFORMANCE, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE. AS A RESULT, THIS PRODUCT, INCLUDING BUT NOT LIMITED TO, KEYSTROKE PROCEDURES, MATHEMATICAL ACCURACY AND PREPROGRAMMED MATERIAL, IS SOLD “AS IS,” AND YOU THE PURCHASER ASSUME THE ENTIRE RISK AS TO ITS QUALITY AND PERFORMANCE.

IN NO EVENT WILL CI BE LIABLE FOR DIRECT, INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIALDAMAGES RESULTING FROM ANY DEFECT IN THE PRODUCT OR ITS DOCUMENTATION.

The warranty, disclaimer, and remedies set forth above are exclusive and replace all others, oral or written, expressed or implied. No CI dealer, agent, or employee is authorized to make any modification, extension, or addition to this warranty.

Some states do not allow the exclusion or limitation of implied warranties or liability for incidental or consequential damages, so the above limitation or exclusion may not apply to you. This warranty gives you specific rights, and you may also have other rights, which vary from state to state.

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ORTGAGEQUALIFIERPLUS®P

Legal Notes

This equipment has been certified to comply with the limits for a Class B computing

device, pursuant to Subpart J of Part 15 of FCC rules.

Software copyrighted and licensed to Calculated Industries, Inc., by

Real Estate Master Technologies, LLC, 2006.

User’s Guide copyrighted by Calculated Industries, Inc., 2006.

QUALIFIER PLUS® and CALCULATED INDUSTRIES® are

registered trademarks of Calculated Industries, Inc.

Looking For New Ideas

Calculated Industries, a leading manufacturer of special-function calculators and digital measuring instruments, is always looking for new product ideas in these areas.

If you have an idea, or a suggestion for improving this product or User’s Guide, please submit your comments online at www.calculated.com under “Contact Us,” “Product Idea Submittal Agreement.” Thank you.

4840 Hytech Drive

Carson City, NV 89706 U.S.A.

1-800-854-8075 Fax: 1-775-885-4949

E-mail: info@calculated.com

www.calculated.com

Designed in the United States of America

Printed in China

5/06

UG3442E-A

Calculated Industries 3442 User Manual

Specifications and Main Features

Frequently Asked Questions

User Manual