User Manual

Mortgages and Amortization 29
BEAR-CH1.DOC BA Real Estate Guidebook Jackie Quiram Revised: 09/28/99 1:16 PM Printed: 09/28/99 1:16 PM
Page 29 of 36
The PITI calculation uses the selling price, the TVM values,
and the values you have entered for the tax rate
(
# Z
) and the insurance rate (
# Q
), or the
actual annual tax and insurance amounts (
# E
).
If you omit the selling price when calculating PITI with tax
and insurance percentages, PITI will be calculated on the
loan amount, which may underestimate PITI.
1. Press
# -
to clear the TVM values.
2. If you have not set the tax and insurance rates for your
area, follow the instructions on page 18 before
proceeding.
3. Enter the sales price (
@
) of the property.
4. Use the TVM keys to enter TERM, I%, and LOAN.
Note: If the borrower’s mortgage requires private
mortgage insurance, that rate (for example, 1/4% to
3/8%) should be added to the annual interest rate.
5. Press
$ &
to display the result (PITI).
1. Press
# -
to clear the TVM values.
2. Add the actual annual tax and insurance amounts, and
enter the total with
# E
to override the
settings for tax rates.
3. Use the TVM keys to enter TERM, I%, and LOAN.
Note: If the borrower’s mortgage requires private
mortgage insurance, that rate (for example, 1/4% to
3/8%) should be added to the annual interest rate.
4. Press
$ &
to display the result (PITI).
Total Payment Including Taxes and Insurance (PITI)
You can compute the total monthly payment including
principal, interest, local property taxes, and insurance
(PITI).
Values Used to
Calculate PITI
Procedure
Using Selling
Price
Procedure
Using Tax and
Insurance
Amounts