U
SER’S GUIDE — 65
Finding Income Required and Allowable Monthly Debt
Using the 28%:36% ratios, how much income would a buyer need to
finance a $250,000 home if they put 20% down? What is the maxi-
mum allowable debt? What is the $ down payment and loan
amount? What is the monthly payment? Use 6.75% interest for 30
years. Estimate property tax/insurance rates of 1.5% and 0.25%,
respectively. Clear mortgage insurance rate to zero, as they are put-
ting 20% down.
STEPS KEYSTROKES DISPLAY
Clear calculator o o 0.00
Enter annual Iinterest rate 6 • 7 5 ˆ 6.75
Enter Term in years 3 0 T 30.00
Enter tax rate 1 • 5 s 7 1.50
Enter insurance rate • 2 5 s 8 0.25
Delete mortgage insurance
rate 0 s 9 0.00
Enter sales price 2 5 0 ) P 250,000.00
Enter Down Payment % 2 0 d 20.00
Find Down Payment $ d 50,000.00
Find Loan Amount l 200,000.00
Display Qualifying Ratios q 28.00-36.00
Find income required q “run” 71,219.12
Find maximum allowable
monthly debt q 474.79
Find monthly P&I Payment p 1,297.20
Find monthly PITI Payment p 1,661.78
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