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.
