Finding The Net Cost Of Housing - Texas Instruments BA Real Estate User Manual

Finding the Net Cost of Housing

Solution
60 Buyer Qualification
A couple is considering an $84,000 mortgage to purchase
a $105,000 home. What would their net cost of housing be
if they were in the 28% tax bracket? Use a standard
30-year note and 8% interest for your example. Assume
property tax and insurance rates are 1.5 and .35
respectively.
Press # , until the BGN indicator disappears.
Steps
Clear TVM values.
Enter sales price.
Enter tax percent.
Enter insurance
percent.
Enter term in years.
Enter interest rate.
Enter loan amount.
Compute monthly
payment.
Recall loan amount.
Multiply by interest
rate to find
approximate annual
interest amount.
Add annual tax
amount.
Multiply by
income-tax rate.
Calculate annual
savings.
Divide by 12 to find
monthly savings and
store the result.
Compute PITI.
Subtract monthly tax
savings.
Calculate monthly
cost of housing.
Keystrokes
# -
105 q @
1.5 # Z
.35 # Q
30 0
8 1
84 q 2
$ 3
] 2
O ] 1 A j
T g
] @ O ]
# Z A a
] g j
O 28 A
j
B 12 j T g
$ &
X ] g t
j
Display
0.00
PRC= 105,000.00
TX%= 1.50
IS% = 0.35
TRM= 30.00
I% = 8.00
LN = 84,000.00
PMT= 616.36
LN = 84,000.00
MEM= 6,720.00
8,295.00
0.28
2,322.60
MEM= 193.55
PITI= 778.24
193.55
584.69