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If the above loan starts in July, find the “after-tax” payment.
STEPS
KEYSTROKES
DISPLAY
Set Mo. 1 Offset to July
7 s )
7.00
Find annual tax savings
s p p
1,887.16
Find monthly tax savings
p
314.53
Find “after-tax” payment
p
931.95
Return Mo. Offset to Jan.
1 s )
1.00
Return tax bracket to 21%
2 1 s p
21.00
Rent vs. Buy
If your client is currently renting a home for $1,250/month, what is
the comparable home sales price and loan amount that he or she
could afford? What is the estimated annual and monthly income tax
savings, if they were to finance this mortgage? The current rate is
7.5% on a 30-term fixed-rate mortgage, and your client can afford to
put 10% down. You estimate local taxes at 1.25% and property
insurance at 0.35%. Your client is in the 28% tax bracket.
STEPS
KEYSTROKES
DISPLAY
Clear calculator
o o
0.00
Enter interest rate
7 • 5 ˆ
7.50
Enter term
3 0 T
30.00
Enter down payment
1 0 d
10.00
Enter tax bracket
2 8 s p
28.00
Enter property tax rate
1 • 2 5 s 7
1.25
Enter insurance rate
• 3 5 s 8
0.35
Enter current monthly rent to find
comparable home price
1 2 5 0 s P
216,781.98
Find comparable
loan amount
P
195,103.78
Find PITI payment
P
1,653.24
Find annual tax savings
P
4,838.84
Find mo. tax savings
P
403.24
Re-display tax bracket
P
28.00
Re-display monthly rent
P
1,250.00
Return tax bracket to 21%
2 1 s p
21.00