introductory module - real estate and mortgage slide 1 welcome module i: introductory presentation...

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


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:


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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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.


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


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



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.


Enter Sales Price 425,000.00

Enter Down Pmt % 20.00 %

Find Down Pmt $ 85,000.00

Find Loan Amt 340,000.00


85,000.00340,000.00

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Slide 7


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).



Enter Down Pmt $ 15,000.00

Find Down Pmt % 5.19 %

Find LTV LTV 94.81 %



94.815.19274,000.0

0

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Slide 8


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.



Enter LTV LTV 80.00 %

Find Down Pmt $ 75,000.00


Find Down Pmt % 20.00 %


75,000.00

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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.


Enter Loan Amt 200,000.00

Enter Term 30.00

Enter Interest 8.00 %

Find Payment P+I 1,467.53


1,467.53P+I

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Slide 10


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?



Slide 11

1,316.10P+I231,750.00


Steps Keys Display


Enter Term 30.00



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.


PITI 1,706.20

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Slide 12


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


1,786.20TTL

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Slide 13


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?


Enter Loan Amt 250,000.00


Enter Term 30.00

Find P&I Payment P&I 1,663.26



1,663.26P+I

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Slide 14


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)


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)


27.9518.72

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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.



Slide 16

733.76AMRT 29.92REM

AMORTIZATION

Steps Keys Display


Enter Loan Amount

100,000.00


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


733.76P+I 666.67AMRT 67.10AMRT99,932.90BAL

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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)?



Slide 18

29.00REM99,164.64BAL 7,969.81AMRT 835.36AMRT8,805.17AMRT2,231.55DED

AMORTIZATION

Steps Keys Display


Enter Loan Amount 100,000.00


Enter Term 30.00

Find P&I Payment 733.76

Set Payment Range 1-12

Find Total Interest 7,969.81


Find Total Int & Prin 8,805.17



Find Tax Ded (28%) 2,231.55


Amortize for the 1st year or period:

Steps Keys Display


733.76P+I

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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 Int & Prin 8,805.17



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



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?



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 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




28.00-36.00

184,631.02

MAX189,631.02

1,400.00TTL

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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






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


Display Down Pmt % 20.00 %

Display Down Pmt $ 59,448.21




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Slide 24

QUESTIONS

Questions?

Thank you for your attendance and participation. Good Luck!

Table of Contents

introductory module - real estate and mortgage slide 1 welcome module i: introductory presentation...

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