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.

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