REMG-1-PPT Introductory Module Presentation

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WELCOME
Designed for use with the Qualifier Plus
Training Program Real Estate or Mortgage Workbooks
Table of Contents
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TABLE OF CONTENTS
This presentation includes step-by-step
instructionfor the following introductory
chapters

• Date Math
• Overview of Financial Keys
• Price, Down and LTV
• Calculating Payments
• Amortization
• Qualifying

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DATE MATH
Using the colon key, youcan solve for common
real estatedate problems, including the
expirationdate of a listing or escrow closing
dates.
Example Assume that today is April 26, 2004 and
escrow closes in 45 days. What is the final
closing date?
Steps Keys Display
Clear Calculator o o 0.00 Enter Month 4 4.
Enter Day 26 4 26 Enter Year 04 4 26
04 Add 45 Days 45 THU 06-10-04 (Thurs. June
10, 2004)
-- Refer to Workbook Chapter 2
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DATE MATH
The date math function alsoallows you to add or
subtract datesor number of days to arrive at a
futureor past date.
Example How many days are there betweenOctober
15, 2004 and March 17, 2005?
Steps Keys Display
Clear Calculator o o 0.00 Enter Last Date 3
17 05 3 17 05 Subtract First Date ? 10
15 04 10 15 04 Find of Days 153.00
(days)
-- Refer to Workbook Chapter 2
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OVERVIEW OF FINANCIAL KEYS
A mortgage payment hasfour basic elements. If
you enter any three of these elements,you can
solve for the fourth unknown element.It does not
matter in which order you enterthe known
information.
The Financial Keys Are
Loan Amountl Loan Amount, or Amount to be
Borrowed Paymentp Payment per Period, Typically
Monthly TermT Annual Term, Typically 30 Years
Interest? Annual Interest per Period
-- Refer to Workbook Chapter 3
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PRICE, DOWN AND LOAN-TO-VALUE
85,000.00
340,000.00
Enter the two known variables(e.g., sales price,
down payment), and solve for the third (e.g.,
loan amount). The calculator will also compute
the dollar amount of the down payment if a
percentage is entered.
Example Find the loan amount if the sales price
is 425,000 and the down payment is 20. Also
find the amount of the down payment.
Steps Keys Display
Clear Calculator o o 0.00 Enter Sales Price 425
) P 425,000.00 Enter Down Pmt 20 d 20.00 Find
Down Pmt d 85,000.00 Find Loan Amt l 340,000.00
-- Refer to Workbook Chapter 4
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PRICE, DOWN AND LOAN-TO-VALUE
94.81
5.19
274,000.00
The Qualifier Plus IIIx andQualifier Plus IIIfx
will alsocalculate loan-to-value (LTV).
Example Find the loan-to-value if the buyer is
putting 15,000 down on a 289,000 home.
Steps Keys Display
Clear Calculator o o 0.00 Enter Sales Price 289
) P 289,000.00 Enter Down Pmt 15 )
d 15,000.00 Find Down Pmt d 5.19 Find
LTV d LTV 94.81 Find Loan Amt l 274,000.00
-- Refer to Workbook Chapter 4
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PRICE, DOWN AND LOAN-TO-VALUE
20.00
300,000.00
75,000.00
LTV can also be entered todetermine down payment
amountand percentage.
Example Find the loan-to-value if the buyer
needs to borrow 80 for a 375,000 home.
Steps Keys Display
Clear Calculator o o 0.00 Enter Sales Price 375
) P 375,000.00 Enter LTV 80 s d LTV 80.00 Find
Down Pmt d 75,000.00 Find Loan
Amt l 300,000.00 Find Down Pmt d 20.00
-- Refer to Workbook Chapter 4
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CALCULATING PAYMENTS
The Qualifier Plus IIIx calculatorcan compute
any type of loan payment. Remember, the order
you enter the information does not matter. The
calculator will solve for the missing variable.
Example What is the monthly PI (principal and
interest) payment for a 200,000 loan at 8
interest for a term of 30 years?
Steps Keys Display
Clear Calculator o o 0.00 Enter Loan Amt 200 ) l
200,000.00 Enter Term 30 T 30.00 Enter
Interest 8 ? 8.00 Find Payment p PI 1,467.53
-- Refer to Workbook Chapter 5
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CALCULATING PAYMENTS
The monthly principal, interest,tax and
insurance payment, or PITI, demonstrates what a
buyers actual payment will be, including
property tax, hazard insurance, and mortgage
insurance (PMI).
What is the monthly PITI payment?
-- Refer to Workbook Chapter 5
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CALCULATING PAYMENTS
231,750.00
Steps Keys Display
Clear Calculator o o 0.00 Enter Term 30
T 30.00  Enter Interest 6?25 ? 6.25 Enter Sales
Price 225 ) P 225,000.00 Enter Down Pmt 5
d 5.00 Enter Tax 1?25 s t 1.25 Enter
Insurance 800 I 800.00 Enter Mortgage Ins ?5 s
I 0.50 Find Loan Amount l 213,750.00 Find PI
Payment p PI 1,316.10 Find PITI Payment p PITI
1,706.20 Do Not Clear Calculator
If you are using a Qualifier Plus IIIfx, you
will need to press s 7, 8, and/or 9 to enter tax,
insurance and/or mortgage insurance.
-- Refer to Workbook Chapter 5
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CALCULATING PAYMENTS
Calculate a the total paymentin the event that
the buyer willbe paying Homeowners Association
dues.
Example Add estimated Homeowners Association
dues of 80 per month to the above example and
find the total payment(PITI plus monthly dues).
Steps Keys Display
Enter HA Dues 80 e 80.00 Find Total Pmt p p p TTL
1,786.20
-- Refer to Workbook Chapter 5
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CALCULATING PAYMENTS
How fast will a loan be paid offif larger
monthly payments are madeto the principal?
Example What is the monthly payment for a
250,000 loan at 7, amortized for 30 years?
Steps Keys Display
Clear Calculator o o 0.00 Enter Loan Amt 250 )
l 250,000.00 Enter Interest 7 ? 7.00 Enter
Term 30 T 30.00 Find PI Payment p PI 1,663.26
Do Not Clear Calculator
-- Refer to Workbook Chapter 5
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CALCULATING PAYMENTS
27.95
18.72
But, if the borrower rounded up to make payments
of 1,700 per month, how long would it take to
pay off this loan?
Steps Keys Display
Enter New Pmt 1700 p 1,700.00 Find New
Term T 27.95 (years) Do Not Clear Calculator
What if the borrower paid even more perhaps
2,000 per month?
Steps Keys Display
Enter New Pmt 2 ) p 2,000.00 Find New
Term T 18.72 (years)
-- Refer to Workbook Chapter 5
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AMORTIZATION
The a function calculatesprincipal and interest
allocation and estimated mortgage interest
deduction,as well as amortization and term.
ExampleWhat is the monthly payment for a
100,000 loan at 8, amortized for 30 years? How
much of the first payment is interest? principal?
What is the remaining loan balance?
-- Refer to Workbook Chapter 6
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AMORTIZATION
Steps Keys Display
Clear Calculator o o 0.00 Enter Loan Amount
100 ) l 100,000.00 Enter Interest 8 ? 8.00
Enter Term 30 T 30.00 Find PI Payment p 733.76
Set Payment Range 1 s b a AMRT 1-1 Find Total
Interest a 666.67 Find Total Principal a 67.10 Fin
d Total Int Prin a 733.76 Find Remaining
Bal a 99,932.90 Find Remaining Term a 29.92
-- Refer to Workbook Chapter 6
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AMORTIZATION
The mortgage interest deduction iscomputed on
the sixth press of a,after entering the
amortization period. It is based on an estimated
28 tax bracket, unlessyouve customized the
bracket using s .
Example What is the monthly payment for a
100,000 loan at 8 amortized for 30 years? What
is the interest paid after making 12 monthly
payments (1st year)? What is the principal paid
for the 1st year? Total principal and interest?
What is the remaining loan balance and term? What
is the estimated annual income tax deduction for
mortgage interest (based on 28 tax bracket)?
-- Refer to Workbook Chapter 6
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AMORTIZATION
Steps Keys Display
Clear Calculator o o 0.00 Enter Loan Amount 100
) l 100,000.00 Enter Interest 8 ? 8.00 Enter
Term 30 T 30.00 Find PI Payment p 733.76
Amortize for the 1st year or period
Steps Keys Display
Set Payment Range 1 a 1-12 Find Total
Interest a 7,969.81 Find Total Principal a 835.36
Find Total Int Prin a 8,805.17 Find Remaining
Bal a 99,164.64 Find Remaining Term a 29.00 Find
Tax Ded (28) a 2,231.55 Do Not Clear Calculator
-- Refer to Workbook Chapter 6
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AMORTIZATION
Amortize for the 2nd year or period
Steps Keys Display
Set Range (2nd Year) a 13-24 Find Total
Interest a 7,900.48 Find Total Principal a 904.70
Find Total Int Prin a 8,805.17 Find Remaining
Bal a 98,259.94 Find Remaining Term
a 28.00 Find Tax Ded (28) a 2,212.13
Amortize for the 3rd year or period
Repeated presses of the a key will
automatically move to the next year, calculating
the same sequence for every year for the life of
the loan
Steps Keys Display
Set Range (3rd Year) a 25-36
-- Refer to Workbook Chapter 6
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QUALIFYING
The Qualifier Plus IIIx and QualifierPlus IIIfx
have two qualifying ratio keys. Press q and it
displays 28.00-36.00 (default). As a rule, this
is the standard conventional conforming ratio.
Press Q and it displays 29.00-41.00 (default),
which represents the more generous ratio
typically found on government-backed loans, such
as FHA and VA.
Example With a combined annual income of 60,000
and monthly debt of 400, the buyers have 5,000
down and a loan at 5 for 30 years. Taxes run
1.25, insurance is 0.5 and PMI is 0.6. HA dues
are 40 monthly. For what loan amount and price
do the buyers appear to qualify? What is the
estimated PITI payment?
-- Refer to Workbook Chapter 7
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QUALIFYING
28.00-36.00
189,631.02
Steps Keys Display
Clear Calculator o o 0.00 Enter Annual Inc 60 )
i 60,000.00 Enter Monthly Debt 400 D 400.00 Enter
Down Pmt 5 ) d 5,000.00 Enter Interest 5 ? 5.00
Enter Term 30 T 30.00 Enter Tax 1?25 t 1.25
Enter Insurance ?5 I 0.50 Enter Mortgage
Ins ?6 s I 0.60 Enter HA Dues 40
e 40.00 Display Ratios q 28.00-36.00 Find Qual
Loan Amt q 184,631.02 Find Price w/
Down P 189,631.02 Find Total Payment p p p TTL
1,400.00 Do Not Clear Calculator
If you are using a Qualifier Plus IIIfx, you
will need to press s 7, 8, and/or 9 to enter tax,
insurance and/or mortgage insurance.
-- Refer to Workbook Chapter 7
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QUALIFYING
28.00-36.00
241,407.25
But, what if their income increasedto 75,000
and they also increased theirdown payment to
10?
Steps Keys Display
Enter New Income 75 ) i 75,000.00 Enter New Dn
Pmt 10 ) d 10,000.00 Display Ratios q 28.00-36.00
Find Qual Amt q 231,407.25 Find Price w/
Down P 241,407.25 Find Total Payment p p p TTL
1,750.00 Do Not Clear Calculator
-- Refer to Workbook Chapter 7
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QUALIFYING
28.00-36.00
59,448.21
297,241.06
If they put 20 down instead of only10,000, and
eliminated mortgageinsurance, what could they
qualify for?How much money will be required for
the down payment to equal 20?
Steps Keys Display
Enter New Down Pmt 20 d 20.00 Delete Mortgage
Ins 0 s I 0.00 Display Qual 1
Ratios q 28.00-36.00 Find Qual Loan
Amt q 237,792.85 Find Price w/ Down P 297,241.06 D
isplay Down Pmt d 20.00 Display Down Pmt
d 59,448.21 Find Total Payment p p p TTL
1,750.00
If you are using a Qualifier Plus IIIfx, you
will need to press s 7, 8, and/or 9 to enter tax,
insurance and/or mortgage insurance.
-- Refer to Workbook Chapter 7
Table of Contents
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QUESTIONS
Questions?
Thank you for your attendance and participation.
Good Luck!
Table of Contents
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THU
06-10-04