USER’S GUIDE — 37Finding APR, Total Finance Charges(Including Mortgage Insurance)You are financing a mortgage of $275,000 for 30 years at a nominal,or quoted, rate of 6.25% interest. The cost of getting the loan isquoted as 1.5 points plus $550 in fees. What is the APR includingmortgage insurance, total finance charges, principal amountfinanced, total cost, P&I payment, mortgage insurance, and PIMIpayment? Mortgage insurance is estimated at 0.65% of the loanamount.STEPS KEYSTROKES DISPLAYClear calculator o o 0.00Enter loan amount 2 7 5 ) l 275,000.00Enter interest 6 • 2 5 ˆ 6.25Enter term 3 0 T 30.00Find monthly P&I payment p “run” 1,693.22Enter mortgage ins. % • 6 5 s 9 0.65Find Loan Costs:Recall loan amount ® l 275,000.00Find point cost x 1 • 5 % = 4,125.00Add fees and find total + 5 5 0 = 4,675.00Find APR* s ˆ “run” 7.24Find finance charges (includingmortgage ins.*, points/feesand total interest paid) ˆ 392,860.03Find amount financed(principal minus pts/fees) ˆ 270,325.00Find total finance chargesplus amount financed ˆ 663,185.03P&I payment ˆ 1,693.22Mo. mortgage insurance ˆ 148.96PIMI payment** ˆ 1,842.18*APR includes mortgage insurance, if entered. Total finance charges include mort-gage insurance over the life of the loan, to present a worst-case scenario; however,most people can eliminate MI once a certain LTV is met.**Payment includes estimated monthly mortgage insurance.
