Introductory Module - Real Estate and Mortgage
Slide 1
WELCOME
Module I: IntroductoryPresentation
Designed for use with theQualifier Plus® Training Program
Real Estate or Mortgage Workbooks
Table of Contents
Introductory Module - Real Estate and Mortgage
Slide 2
TABLE OF CONTENTS
Date Math
Overview of Financial Keys
Price, Down and LTV
Calculating Payments
Amortization
Qualifying
This presentation includes step-by-step instructionfor the following introductory chapters:
Introductory Module - Real Estate and Mortgage
Slide 3
DATE MATH
Steps Keys Display
Example:
Assume that today is April 26, 2004 and escrow
closes in 45 days. What is the final closing date?
Using the colon key, youcan solve for common real estatedate problems, including the expirationdate of a listing or escrow closing dates.
Clear Calculator 0.00
Enter Month 4.—
Enter Day 4 — 26 —
Enter Year 4 — 26 — 04
Add 45 Days THU 06-10-04
(Thurs. June 10, 2004)
-- Refer to Workbook Chapter 2
06-10-04THU
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Introductory Module - Real Estate and Mortgage
Slide 4
DATE MATH
Steps Keys Display
Example:
How many days are there between
October 15, 2004 and March 17, 2005?
The date math function alsoallows you to add or subtract datesor number of days to arrive at a futureor past date.
Clear Calculator 0.00
Enter Last Date
3 — 17 — 05
Subtract First Date
10 — 15 — 04
Find # of Days 153.00 (days)
-- Refer to Workbook Chapter 2 Table of Contents
Introductory Module - Real Estate and Mortgage
Slide 5
OVERVIEW OF FINANCIAL KEYS
The Financial Keys Are:
A mortgage payment hasfour basic elements.
If you enter any three of these elements,you can solve for the fourth unknown element.It does not matter in which order you enterthe known information.
Loan Amount Loan Amount, or Amount to be Borrowed
Payment Payment per Period, Typically Monthly
Term Annual Term, Typically 30 Years
Interest Annual Interest per Period
-- Refer to Workbook Chapter 3 Table of Contents
Introductory Module - Real Estate and Mortgage
Slide 6
PRICE, DOWN AND LOAN-TO-VALUE
Steps Keys Display
Example:
Find the loan amount if the sales price is $425,000 and
the down payment is 20%.
Also find the amount of the down payment.
Enter the two known variables(e.g., sales price, down payment), and solve for the third (e.g., loan amount).
The calculator will also compute the dollar amount of the down payment if a percentage is entered.
Clear Calculator 0.00
Enter Sales Price 425,000.00
Enter Down Pmt % 20.00 %
Find Down Pmt $ 85,000.00
Find Loan Amt 340,000.00
-- Refer to Workbook Chapter 4
85,000.00340,000.00
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Introductory Module - Real Estate and Mortgage
Slide 7
PRICE, DOWN AND LOAN-TO-VALUE
Steps Keys Display
Example:
Find the loan-to-value if the buyer is putting
$15,000 down on a $289,000 home.
The Qualifier Plus IIIx andQualifier Plus IIIfx will alsocalculate loan-to-value (LTV).
Clear Calculator 0.00
Enter Sales Price 289,000.00
Enter Down Pmt $ 15,000.00
Find Down Pmt % 5.19 %
Find LTV LTV 94.81 %
Find Loan Amt 274,000.00
-- Refer to Workbook Chapter 4
94.815.19274,000.0
0
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Introductory Module - Real Estate and Mortgage
Slide 8
PRICE, DOWN AND LOAN-TO-VALUE
20.00300,000.0
0
Steps Keys Display
Example:
Find the loan-to-value if the buyer needs to
borrow 80% for a $375,000 home.
LTV can also be entered todetermine down payment amountand percentage.
Clear Calculator 0.00
Enter Sales Price 375,000.00
Enter LTV LTV 80.00 %
Find Down Pmt $ 75,000.00
Find Loan Amt 300,000.00
Find Down Pmt % 20.00 %
-- Refer to Workbook Chapter 4
75,000.00
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Introductory Module - Real Estate and Mortgage
Slide 9
CALCULATING PAYMENTS
Steps Keys Display
Example:
What is the monthly P&I (principal and interest)
payment for a $200,000 loan at 8% interest for a term of
30 years?
The Qualifier Plus IIIx calculatorcan compute any type of loan payment.
Remember, the order you enter the information does not matter. The calculator will solve for the missing variable.
Clear Calculator 0.00
Enter Loan Amt 200,000.00
Enter Term 30.00
Enter Interest 8.00 %
Find Payment P+I 1,467.53
-- Refer to Workbook Chapter 5
1,467.53P+I
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Introductory Module - Real Estate and Mortgage
Slide 10
CALCULATING PAYMENTS
Sales Price $225,000
Down Payment 5%
Loan Amount 95%
Interest 6.25%
Term 30 Years
Property Tax 1.25%
Hazard Insurance $800
PMI 0.50%
Example:
The monthly principal, interest,tax and insurance payment, or PITI, demonstrates what a buyer’s actual payment will be, including property tax, hazard insurance, and mortgage insurance (PMI).
What is the monthly PITI payment?
-- Refer to Workbook Chapter 5 Table of Contents
Introductory Module - Real Estate and Mortgage
Slide 11
1,316.10P+I231,750.00
CALCULATING PAYMENTS
Steps Keys Display
Clear Calculator 0.00
Enter Term 30.00
Enter Interest 6.25 %
Enter Sales Price 225,000.00
Enter Down Pmt % 5.00 %
Enter Tax* 1.25 %
Enter Insurance* 800.00
Enter Mortgage Ins* 0.50 %
Find Loan Amount 213,750.00
Find P&I Payment P+I 1,316.10
Find PITI Payment PITI 1,706.20
Do Not Clear Calculator
* If you are using a Qualifier Plus IIIfx, you will need to press , , and/or to enter tax, insurance and/or mortgage insurance.
-- Refer to Workbook Chapter 5
PITI 1,706.20
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Introductory Module - Real Estate and Mortgage
Slide 12
CALCULATING PAYMENTS
Steps Keys Display
Example:
Add estimated Homeowner’s Association dues of $80 per
month to the above example and find the total payment
(PITI plus monthly dues).
Calculate a the total paymentin the event that the buyer willbe paying Homeowner’s Association dues.
Enter HA Dues 80.00
Find Total Pmt TTL 1,786.20
-- Refer to Workbook Chapter 5
1,786.20TTL
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Introductory Module - Real Estate and Mortgage
Slide 13
CALCULATING PAYMENTS
Steps Keys Display
Example:
What is the monthly payment for a $250,000
loan at 7%, amortized for 30 years?
How fast will a loan be paid offif larger monthly payments are madeto the principal?
Clear Calculator 0.00
Enter Loan Amt 250,000.00
Enter Interest 7.00 %
Enter Term 30.00
Find P&I Payment P&I 1,663.26
Do Not Clear Calculator
-- Refer to Workbook Chapter 5
1,663.26P+I
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Introductory Module - Real Estate and Mortgage
Slide 14
CALCULATING PAYMENTS
Steps Keys Display
But, if the borrower rounded up to make
payments of $1,700 per month, how long would
it take to pay off this loan?
Enter New Pmt 1,700.00
Find New Term 27.95 (years)
Do Not Clear Calculator
Steps Keys Display
What if the borrower paid even more… perhaps
$2,000 per month?
Enter New Pmt 2,000.00
Find New Term 18.72 (years)
-- Refer to Workbook Chapter 5
27.9518.72
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Introductory Module - Real Estate and Mortgage
Slide 15
AMORTIZATION
Example:
What is the monthly payment for a $100,000 loan at 8%,
amortized for 30 years? How much of the first payment is
interest? principal? What is the remaining loan balance?
The function calculatesprincipal and interest allocation and estimated mortgage interest deduction,as well as amortization and term.
-- Refer to Workbook Chapter 6 Table of Contents
Introductory Module - Real Estate and Mortgage
Slide 16
733.76AMRT 29.92REM
AMORTIZATION
Steps Keys Display
Clear Calculator 0.00
Enter Loan Amount
100,000.00
Enter Interest 8.00 %
Enter Term 30.00
Find P&I Payment 733.76
Set Payment Range
AMRT 1-1
Find Total Interest 666.67
Find Total Principal 67.10
Find Total Int & Prin 733.76
Find Remaining Bal 99,932.90
Find Remaining Term 29.92
-- Refer to Workbook Chapter 6
733.76P+I 666.67AMRT 67.10AMRT99,932.90BAL
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Introductory Module - Real Estate and Mortgage
Slide 17
AMORTIZATION
The mortgage interest deduction iscomputed on the sixth press of ,after entering the amortization period.
It is based on an estimated 28% tax bracket, unlessyou’ve customized the bracket using .
Example:
What is the monthly payment for a $100,000
loan at 8% amortized for 30 years? What is
the interest paid after making 12 monthly
payments (1st year)? What is the principal
paid for the 1st year? Total principal and
interest? What is the remaining loan balance
and term? What is the estimated annual
income tax deduction for mortgage interest
(based on 28% tax bracket)?
-- Refer to Workbook Chapter 6 Table of Contents
Introductory Module - Real Estate and Mortgage
Slide 18
29.00REM99,164.64BAL 7,969.81AMRT 835.36AMRT8,805.17AMRT2,231.55DED
AMORTIZATION
Steps Keys Display
Clear Calculator 0.00
Enter Loan Amount 100,000.00
Enter Interest 8.00 %
Enter Term 30.00
Find P&I Payment 733.76
Set Payment Range 1-12
Find Total Interest 7,969.81
Find Total Principal 835.36
Find Total Int & Prin 8,805.17
Find Remaining Bal 99,164.64
Find Remaining Term 29.00
Find Tax Ded (28%) 2,231.55
Do Not Clear Calculator
Amortize for the 1st year or period:
Steps Keys Display
-- Refer to Workbook Chapter 6
733.76P+I
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Introductory Module - Real Estate and Mortgage
Slide 19
28.00REM98,259.94BAL 7,900.48AMRT 904.70AMRT8,805.17AMRT2,212.13DED
AMORTIZATION
Set Range (2nd Year) 13-24
Find Total Interest 7,900.48
Find Total Principal 904.70
Find Total Int & Prin 8,805.17
Find Remaining Bal 98,259.94
Find Remaining Term 28.00
Find Tax Ded (28%) 2,212.13
Amortize for the 2nd year or period:
Steps Keys Display
Set Range (3rd Year) * 25-36 …
Amortize for the 3rd year or period:
Steps Keys Display* Repeated presses of the key will automatically move to the next year, calculating the same sequence for every year for the life of the loan
-- Refer to Workbook Chapter 6 Table of Contents
Introductory Module - Real Estate and Mortgage
Slide 20
QUALIFYING
The Qualifier Plus IIIx and QualifierPlus IIIfx have two qualifying ratio keys.
Press and it displays 28.00-36.00 (default). As a rule, this is the standard conventional conforming ratio.
Press and it displays 29.00-41.00 (default), which represents the more generous ratio typically found on government-backed loans, such as FHA and VA.
Example:
With a combined annual income of $60,000 and monthly debt of $400, the
buyers have $5,000 down and a loan at 5% for 30 years. Taxes run 1.25%,
insurance is 0.5% and PMI is 0.6%. HA dues are $40 monthly. For what loan
amount and price do the buyers appear to qualify? What is the estimated PITI
payment?
-- Refer to Workbook Chapter 7 Table of Contents
Introductory Module - Real Estate and Mortgage
Slide 21
QUALIFYING
Steps Keys DisplayClear Calculator 0.00
Enter Annual Inc 60,000.00
Enter Monthly Debt 400.00
Enter Down Pmt 5,000.00
Enter Interest 5.00 %
Enter Term 30.00
Enter Tax* 1.25 %
Enter Insurance* 0.50 %
Enter Mortgage Ins* 0.60 %
Enter HA Dues 40.00
Display Ratios 28.00-36.00
Find Qual Loan Amt 184,631.02
Find Price w/ Down 189,631.02
Find Total Payment TTL 1,400.00
Do Not Clear Calculator
-- Refer to Workbook Chapter 7
* If you are using a Qualifier Plus IIIfx, you will need to press , , and/or to enter tax, insurance and/or mortgage insurance.
28.00-36.00
184,631.02
MAX189,631.02
1,400.00TTL
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Introductory Module - Real Estate and Mortgage
Slide 22
241,407.25
1,750.00TTL 28.00-36.00
231,407.25
MAX
QUALIFYING
Steps Keys Display
But, what if their income increased
to $75,000 and they also increased their
down payment to 10%?
Enter New Income 75,000.00
Enter New Dn Pmt 10,000.00
Display Ratios 28.00-36.00
Find Qual Amt 231,407.25
Find Price w/ Down 241,407.25
Find Total Payment TTL 1,750.00
Do Not Clear Calculator
-- Refer to Workbook Chapter 7 Table of Contents
Introductory Module - Real Estate and Mortgage
Slide 23
28.00-36.00
237,792.85
MAX 1,750.00TTL 20.0059,448.21297,241.0
6
QUALIFYING
Steps Keys Display
If they put 20% down instead of only
$10,000, and eliminated mortgage
insurance, what could they qualify for?
How much money will be required for the down payment to equal
20%?
Enter New Down Pmt 20.00 %
Delete Mortgage Ins* 0.00
Display Qual 1 Ratios 28.00-36.00
Find Qual Loan Amt 237,792.85
Find Price w/ Down 297,241.06
Display Down Pmt % 20.00 %
Display Down Pmt $ 59,448.21
Find Total Payment TTL 1,750.00
-- Refer to Workbook Chapter 7
* If you are using a Qualifier Plus IIIfx, you will need to press , , and/or to enter tax, insurance and/or mortgage insurance.
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