HP 10bII - Cash Flow Examples; Wrap-Around Mortgages

Cash Flow Examples
Wrap-Around Mortgages
A wrap-around mortgage is a combination of refinancing a mortgage and
borrowing against real estate equity. Usually the two unknown quantities
in the wrapped mortgage are the new payment and the rate of return to
the lender. To arrive at a solution, you need to use both the ТУМ and the
cash flow applications.
Example. You have 82 monthly payments of $754 left on your 8%
mortgage, leaving a remaining balance of $47,510.22. You would like to
wrap that mortgage and borrow an additional $35,000 for another
investment. You find a lender who is willing to “wrap” an $82,510.22
mortgage at 9.5% for 15 years. What are your new payments and what
return is the lender getting on this wrap-around mortgage?
The payment calculation is a straightforward TVM payment calculation
using the new amount as the PV.
Set to End mode. Press Б if BEGIN annunciator is displayed.
Keys: Display: Description:
Qe 0.00 Clears all registers.
CO Des 12.00 Sets payments per year.
@OBOOODOOGHNV 82,510.22 Stores loan amount on
which your new
payment is calculated.
@С)®@® 9.50 Stores interest rate.
Or
0.00
Stores
final
balance.
OOO
180.00
Stores
number
of
monthly
payments
you
will
make.
e
-861.59
Calculates
your
new
payment.
8: Additional Examples 113