User Manual

Buyer Qualification 61
Net Cost of Housing Based on
Tax and Insurance Percents
1. Clear TVM values (if not already cleared).
# -
2. Enter sales price. $105,000
@
3. Enter tax percent (if not already entered). 1.5
# Z
4. Enter insurance percent (if not already
entered).
.35
# Q
5. Enter term of loan (in years). 30
0
6. Enter interest rate. 8
1
7. Enter loan amount. $84,000
2
8. Compute payment.
$ 3
$.616.36
9. Recall loan amount.
] 2
$84,000.00
10. Multiply by annual interest rate
(as a percentage) to find
approximate annual interest.
O ] 1 A j
$6,720.00
T g
11. Add annual tax
amount.
] @ O ] # Z A j
$1,575.00
12. Calculate total tax-deductible items.
a ] g j
$8,295.00
13. Multiply by homeowner’s income-tax rate.
O
28
A
14. Calculate annual tax savings.*
j
$2,322.60
15. Divide by 12 to find monthly tax
savings, and store the result in memory.
B
12
j
$193.55
T g
16. Compute PITI.
$ &
$.778.24
17. Subtract monthly tax savings.
X ] g t
$.193.55
18. Calculate monthly net cost of housing.
j
$.584.69
* Assumes the homeowner is not using the standard deduction.