Manual

U SER ’ S G UIDE — 73
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
1. 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
2. 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
3. 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)