Calculated Industries 3442 - Manual (Page 67)

62 — M
ORTGAGE
Q
UALIFIER
P
LUS
®
P X2
(Cont’d)
Additionally, besides the entry of a Start Rate, the calculator allows
the entry of a Start Payment for purposes of performing a “Pick-A-
Payment” type of P-A-P loan. The user can also toggle between the
entered Start Payment and Start Rate (the calculator will calculate
the Start interest rate based on the entered Start Payment and other
entered loan variables).
The benefit of Combo loans over single, fixed-rate loans with mort-
gage insurance is that the buyer can actually save money obtaining
two loans vs. a single, larger loan requiring monthly mortgage insur-
ance. This calculator will find the 1st and 2nd TD loan amounts and
payments, the savings over the single loan with mortgage insurance,
the equivalent interest rates for both the 1st and 2nd static combo
loans and the larger loan with MI, and compute the term reduction of
the 2nd TD if the savings were applied to the 2nd TD. The calculator
will also do a stand alone 1st and 2nd without having to compare to
a fixed loan with MI.
The Combo P-A-Ps/EB P-A-Ps are highly complex; thus, only 1st
TD/2nd TD loan amounts and payments and total loan cost can be
shown. In addition, the calculator will display the adjusted 2nd TD
term if the savings were applied to paying off the 2nd TD loan.
Pick-A-Payment Loan (Zero-Month/30-Term) vs.
Standard Fixed-Rate Loan —
Entering Starting Payment
You’d like to show your client the Investment Savings of a Zero-
month/30-term P-A-P (10-year recast) loan with a Starting Payment
of $1,000.00 over that of a fixed-rate loan. Find the P-A-P loan pay-
ments, the 5-year investment savings (based on a 10% ROI), and
the total cost of the loan (total principal and interest). Also, find the
5-year investment savings based on a lower ROI% of 6.5%.
Note: In a Zero-month P-A-P, the interest starts compounding at the full Note rate
immediately (there is no waiting period). However, the initial payments are still very
low.
You have the following loan parameters:
FIXED-RATE LOAN P-A-P LOAN
Loan Amount 250,000 250,000
Interest 6.00% $1,000 (Start Payment) –
5% (Note%)
Term 30 0 (Start No. of Mo.’s) –
30 years
ROI% -- 10% (default*) and 6.5%
Pmt Cap % -- 7.50% (default**)
(Cont’d)