## Friday, April 6, 2018

### HP 12C and HP Prime: Combo Loans

HP 12C and HP Prime: Combo Loans

Introduction

Home buyers with good credit are sometimes offered a combo loan, also known as a “Piggyback” loan, as a financing option in purchasing the house.  When more than the amount of a purchase of a home is above 80% of the purchase price, private mortgage insurance (PMI) is required.  In order to save money, combo loans split the price into multiple loans.  Common types include:

80:20:  Two loans, one for 80% of the price (large), 20% of the price (small)

80:15:5:  Two loans, one for 80% of the price (large), 15% of the price (small), with 5% of the price as a down payment

80:10:10:  Two loans, one for 80% of the price (large), 10% of the price (small), with 10% of the price as a down payment

Each loans have separate terms (number of years and interest rate).  Monthly end-of-period payments are assumed.

HP Prime Program COMBOLOAN

The program COMBOLOAN calculates the payments for both separate loans and combined loans.  This particular loan covers of three types:  80:20, 80:15:5, and 80:10:10.

EXPORT COMBOLOAN()
BEGIN
// EWS 2018-04-05
// Piggyback Loan
LOCAL a,lst,k;
LOCAL t1,t2,i1,i2;
LOCAL d,p1,p2,p;
// terms, order allows to
// use eqn −5*k+25
lst:={"80:20","80:15:5","80:10:10"};
// input
INPUT({a,t1,i1,t2,i2,{k,lst}},
"Payment: Combo Loan",
{"Loan: ","Term1:","Rate1:",
"Term2:","Rate2:","Type :"},
{"","years","","years","",""});
// calculation
p1:=Finance.TvmPMT(t1*12,i1,a*0.8,0,12);
p2:=Finance.TvmPMT(t2*12,i2,a*(−0.05*k+0.25),0,12);
p:=p1+p2;
// down payment
d:=−a*0.05*(k-1);
// payment: down, total,
// large, small
RETURN {d,p,p1,p2};
END;

Output:  {down payment, total payment, large payment, small payment}

Examples:

Loan Amount:  \$200,000.00
80% Loan: Term:  30 years, Rate: 4.5%
Small Loan: Term: 15 years, Rate 5%

Example 1:  Type 80:20

Result:  {0, -1,127.01, -810.70, -316.32}

Example 2:  Type 80:15:5

Result: {-10,000.00, -1047.93, -810.70, -237.24}

Example 3:  Type 80:10:10

Result:  {-20,000.00, -968.86, -810.70, -158.16}

HP 12C Platinum Program: 80:10:10 Combo Loan

Inputs:

Store Loan Amount in R1
Large Loan (80%):  Number of Years in R2, Annual Interest Rate in R3
Small Loan (10%):  Number of Years in R4, Annual Interest Rate in R5

Output:

Large Loan Payment, Small Loan Payment, Combined Payment (R6)

 STEP CODE KEY NOTES 001 42, 34 Clear FIN 002 45, 1 RCL 1 003 8 8 004 0 0 005 25 % 006 13 PV 007 45, 3 RCL 3 008 43, 12 [ g ] [ i ] (12÷) Store monthly interest rate 009 45, 2 RCL 2 010 43, 11 [ g ] [ n ] (12x) Store monthly payments 011 14 PMT Calculate payment of 80% loan 012 44, 6 STO 6 013 31 R/S 014 45, 1 RCL 1 015 1 1 016 0 0 017 25 % 018 13 ENTER 019 45, 5 RCL 5 020 43, 12 [ g ] [ i ] (12÷) 021 45, 4 RCL 4 022 43, 11 [ g ] [ n ] (12x) 023 14 PMT Calculate payment on the 10% loan 024 31 R/S 025 45, 6 RCL 6 026 40 + 027 44, 6 STO 6 028 43, 33, 000 GTO 000 On the regular HP 12C, the line is GTO 00

Example:

Terms: 80:10:10

Loan Amount:  \$200,000.00
80% Loan: Term:  30 years, Rate: 4.5%
10% Loan: Term: 15 years, Rate 5%

Results:
-810.70  (payment of 80% loan)
-158.16  (payment of 10% loan)
-968.86  (payment of combined loan)

Sources

Calculated Industries Real Estate Master IIIX: Resident Real Estate Finance Calculator Pocket Reference Guide  Calculated Industries, LLC.: Carson City, NV 2010

Mortgage-Info.com  “Piggy Back Mortgage Calculator” Mortgage Info.com 2011 http://www.mortgage-info.com/mortgage-calculators/piggybackmortgagecalculator.aspx  Accessed April 4, 2018.

Eddie

All original content copyright, © 2011-2018.  Edward Shore.   Unauthorized use and/or unauthorized distribution for commercial purposes without express and written permission from the author is strictly prohibited.  This blog entry may be distributed for noncommercial purposes, provided that full credit is given to the author.  Please contact the author if you have questions.

#### 1 comment:

1. Nice resources!Thanks for sharing such a great valuable info.Keep posting!!
mortgage calculator

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