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— 61
Qualifying Loan Amount and Sales Price (Complete Example
Including Down Payment, Tax/Insurance, Monthly Association
Dues)
The same buyers as in the previous example (who make $75,000
annually and have $500 in long-term monthly debt) wish to buy a
lower-priced home and can only put $5,000 down. If you include
estimated annual property taxes and insurance of 1.5% and 0.25%,
respectively, a mortgage insurance rate of 0.6% and monthly home-
owner’s association dues of $50, for what loan amount can they now
qualify? What sales price can they afford? What’s their total payment?
(Again, use the previously stored 7.5% interest, 30-year term, and
qualifying ratios of 28%:36%; if you’ve cleared or changed these
values, please re-enter them.)
STEPS
KEYSTROKES
DISPLAY
Clear calculator
o o
0.00
Enter annual Income
7 5 ) i
75,000.00
Enter monthly Debt
5 0 0 D
500.00
Enter Down Payment
5 ) d
5,000.00
Enter property tax rate
1 • 5 s 7
1.50
Enter property insurance rate
• 2 5 s 8
0.25
Enter mortgage insurance
rate
• 6 s 9
0.60
Enter monthly association
dues
5 0 e
50.00
Recall annual Interest rate*
® ˆ
7.50
Recall Term* in years
® T
30.00
Display Qualifying Ratios
q
28.00-36.00
Find Qualifying Loan Amount
q
“run” 189,119.31
Find Price
P
194,119.31
— DO NOT CLEAR CALCULATOR —
Now find the monthly P&I payment, PITI payment, total payment,
and interest-only payment:
STEPS
KEYSTROKES
DISPLAY
Find monthly P&I Payment
p
“run” 1,322.35
Find monthly PITI Payment
p
1,700.00
Find total monthly Payment
p
1,750.00
Find monthly interest-only
Payment
p
1,182.00
*If you’re not continuing from the previous problem, you’ll need to re-enter interest
and term.
