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Solution 11273: BA Real Estate™ PITI Calculations When the Price is Less Than the Loan Amount.

How do I calculate for PITI on the BA Real Estate when the buying price is less than the loan amount?

When PITI calculations are performed, various criteria are looked at. In most cases where the buying price is larger than the loan amount, the PITI calculations for %tax and %ins are based on the buying price. However, two situations exist for which this does not hold true:

1) The buying price is the same as the loan amount and the value for the price is not added- the calculator will base the %ins and %tax computation on the loan amount.

2) The loan amount is greater than the buying price- the calculator will again use the loan amount to base its %ins and %tax calculations.

If the buying price should be used to calculate the %ins and %tax, regardless of the loan amount, there is another option. The %ins and %tax can be calculated by:

• Multiplying the decimal values of these numbers by the buying price.
• Sum the two amounts.
• Store this $ amount into "tax&ins$" on the calculator.
Do not enter values for the "%ins" and "%tax" registers.
• Perform the remainder of the PITI calculation as usual.

For example:

LOAN = 150,000
I% = 8
TERM = 20
CPT PMT = -1254.66

%ins = 6.0
%tax = 3.5
Buying price = $100,000

Compute as follows:

• Enter and compute the necessary Time Value of Money values.
• Multiply the %ins by the buying price, .06*100000 [=], and press [STO] 1 to store this amount to the memory.
• Multiply the %tax by the buying price, .035*10000, press [+] [RCL] [1] [=] to sum the two amounts, which comes to 9500. (Store this value into "tax&ins$" by pressing [2nd] [x2]).
• Store 100,000 into the [PRICE] register.
• Press [CPT] [PITI].

The computed PITI is $2,046.33

NOTE: Remember that in this case, the "%ins" and "%tax" are not entered into the corresponding registers on the calculator.

Please see the BA Real Estate guidebooks for additional information.