Bob Hummer, ABR, CDPE, CDRS, CRS, SFR, SRESColdwell Banker Residential Brokerage bob@military-realestate.com |

**Conventional Payment**

By entering a mortgage amount, interest, and term, a mortgage payment is easily determined. If the taxes
and insurance are known, the full payment, principal, interest, taxes and insurance is determined. Private mortgage insurance will be added if the loan-to-value is in excess of 80%.

**FHA Payment**

By entering a mortgage amount, interest, and term, a mortgage payment is easily determined will include the MIP. If the taxes
and insurance are known, the full payment, principal, interest, taxes and insurance is determined.

**VA Payment**

By entering a mortgage amount, interest, and term, a mortgage payment is easily determined. If the taxes
and insurance are known, the full payment, principal, interest, taxes and insurance is determined.

This shows a buyer the advantages of tax savings, appreciation, and principal reduction to lower the cost of owning a home.

It is suggested that both the buyer and agent agree upon a conservative, realistic estimated appreciation. Tax savings are based on the buyer's marginal tax bracket given to the agent.

Since maintenance would be handled by the landlord if the buyer were renting, an estimate of what might be reasonable maintenance is used.

This calculates the maximum mortgage amount based on qualifying ratios for a particular type of loan. Other factors not considered in this form also determine whether a person qualifies for a loan such as credit score, references, length of credit, ability to repay, and the property's ability to secure the loan.

This calculates the interest and time savings by applying additional principal contributions each payment.

By making regular additional principal contributions on a fixed rate mortgage, interest will be saved and the term shortened. This calculation assumes that the same increased monthly payment will be made from the beginning of the mortgage until it is paid in full.

This will compare an adjustable rate mortgage against a fixed rate mortgage to determine when the savings from the ARM will be exhausted in an effort to help the buyer determine the mortgage that will provide the least cost of housing. It assumes that the rate will adjust the maximum amount at each possible period.

Due to the higher interest rate, the home may have a higher monthly payment even though the price of the home was less.

Housing affordability is based on price and interest rates.

This compares the future value of the amount of money necessary for the down payment on a home using three possible alternatives: a certificate of deposit, a stock investment, and purchasing the home. The comparison involves different amounts of risk that are not measured in the example.

This shows the correlation in interest to price. It demonstrates that a .5% change in the rate is approximately equal to a 5% change in price.

Choosing between two loans with different interest rates can be difficult when there are other factors such as a different amount of points. This calculation develops a yield based on rate, points, and holding period to indicate which loan will have lower cost of housing.

The Annual Mortgage Insurance Premium on a FHA loan adds a considerable expense to a mortgage payment. It is cancelled when the loan-to-value reaches 78% of the original sales price. The date can be accelerated by making additional principal contributions to the loan. This app will serve as a tool to determine the required additional principal payments.

The Assumption Comparison helps a buyer to determine the advantages of assuming a FHA or VA mortgage with a lower interest rate compared to originating a new mortgage at a higher, market rate. The savings on the assumption can be in lower principal and interest payments, equity growing faster and lower closing costs. The choice is purchasing the property with a new conventional loan or assuming the existing mortgage with possibly a second mortgage. This comparison assumes that the purchaser will put an equal amount down to assume the existing mortgage and get a second mortgage for the difference.