1. Finance
Lesson Four

2. Learning Objectives Understand the different types of financing.
Understand how loans are used in the market place.

3. 1/5 Variable Rate Loan - Above Prime - Cap on Interest Bank Borrower 56 7 8 9 10 6 7 8 9 10

4. ARM
Adjustable Rate Loan

5. Index - 6 Month T-Bills Margin - 2.75% $ 150,000 @ 5% = $ 805.23
Payment
8% = $1,100.65
Index - 6 Month T-Bills
Margin %
$ 5% = $
25,000
$ 5% = 7.75% = $
- 25,000
$ 5.25% = 8.00%= $
$ 5.5 % = 8.25% = $
$ 5.25% = 8.00% = $
% %= $

6. Graduated Property Mortgage
Example – FHA 245

7. After 2 Years Loan Balance is $72,136 Original Loan was $70,000
Payment should be $614
$614.00
$614.00
$114.00
64.00
3rd Year and for Remaining Term $614
x 12
x 12
$1,368.00
$768.00
$1,368.00
2nd Year Payment $550
$2,136.00
1st Year Payment $500

8. Wraparound Mortgage $ 80,000 Selling Price
50,000 Loan 5% 5 year $268.41
$ 30,000 Loan Balance
,000
10,000 2nd at 8% $
$341.79
$ 80,000
$ 20,000
60,000 at 8% = $440.26

9. Reverse Annuity Mortgage RAM
Property $ 400,000
Pay Out $ ,000 Per Month - $ 36,000 Year
$ ,000 Per Month - $ 36,000
$ 72,000
$ 400,000
,000
$ 328,000 Left Over

10. Shared Appreciation Mortgage SAM
$ 80,000 SP 8% - 30 Yrs
$ 90,000
- 73,982
$ 16, : 2 = $ 8,009.00
$ 73,982 – 8,009 = $ 65,973.00
$ P & I

11. Loan To Value $ 100,000 SP. 20,000 DP. $ 80,000 80% LOAN $80,000 80%
$100,000