Restricted" Qualifying; Unrestricted" Qualifying - Calculated Industries 3415 User Manual

"Restricted" Qualifying

Buyers who make $68,000 annually and have $750 in long-term
monthly debt wish to buy a home offered at $175,000. They can only
afford $5,000 for the down payment. For what maximum loan
amount can they qualify? (Use previously stored 7.5% interest, 30-
year term, Tax/Ins./Mtg. Ins. rates of 1.5%, .25% and 0.6%, respec-
tively, and qualifying ratios of 28%:36%. Re-enter 0.6% mortgage
insurance rate, $50 assn. dues and $5,000 down. Note: If these val-
ues aren't stored, you'll need to re-enter them.)
STEPS
Clear calculator
Recall interest*
Recall term*
Recall annual prop. tax %* ® t
Recall annual prop. ins. %* ® I
Re-enter annual MI rate
Enter homeowner's dues
Enter down payment
Enter annual income
Enter monthly debt
Display qualifying ratios
Find "restricted" qualifying
loan amount
*Note: If you're not continuing from the previous problem, you'll need to re-enter inter-
est, term, and in this case, property tax and insurance.

"Unrestricted" Qualifying

The amount calculated in the previous example is the loan they may
qualify for, based on current income and debt and the standard
28%-36% qualifying ratios. What are the buyer's actual income and
debt ratios? What does the "unrestricted" loan amount calculate to,
and which side is it based on (i.e., buyer's income or debt)? What is
the buyer's maximum allowable debt?
STEPS
Find actual ratios
Find "unrestricted"
loan amount
Find allowable debt
*Note: The "INC" tells you this unrestricted Qualifying Loan Amount is based on the
buyer's Income Ratio — therefore, the restricted Qualifying Loan Amount is based on
the buyer's Debt Ratio. This means that if they pay off their monthly debt to $453/mo.
or lower (as seen in "allowable debt" calculation**), they may qualify for a mortgage
of approx. $170,000 or more and that $175,000 home (putting approx. $4-$5K down).
KEYSTROKES
o o
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• 6 s I
5 0 e
5 ) d
6 8 ) i
7 5 0 D
q
q
— DO NOT CLEAR CALCULATOR —
KEYSTROKES
q
q
q
"run" 137,725.41
"run" 22.76-36.00
UNR 170,870.75 LA INC*
U '
SER S
DISPLAY
0.00
7.50
30.00
1.50
0.25
0.60
50.00
5,000.00
68,000.00
750.00
28.00-36.00
DISPLAY
453.33**
G — 57
UIDE