LoanVibe Worksheet - Mr & Mrs Robert Average

July 4, 2004
Mr & Mrs Robert Average 1234 Oak Street Torrance, CA 90505 Dear Mr & Mrs Robert Average, Buying a home can present an array of difficult financing choices. Sometimes selecting the right loan is not the only important decision you will have to make. You may also have to decide how much of the home price to finance. For example, a lower down payment provides more leverage in your home purchase (as an investment) while leaving more cash for other investments or emergencies. A larger down payment however, provides more home equity and may result in better rates and the avoidance of Private Mortgage Insurance (PMI). Here is a summary of projected estimates using the same loan with different financing structures (down payments).
Purchase Financing Contrast & Projections
Options	Down Payment	Payment*	Equity†	Ttl Costs††	Ttl Pmts.††
Transaction 1	$60,000	$1,585	$143,595	$101,630	$130,819
Transaction 2	$30,000	$1,811	$117,544	$118,721	$149,871
Transaction 3	$15,000	$2,001	$104,518	$123,535	$166,747
	Payments include PITI and PMI (see section "Loan Descriptions" below for loan rate and term information. †Equity is based on Loan 1: $300,000 / Loan 2: $300,000 / Loan 3: $300,000 sale price and Loan 1: 2.00% / Loan 2: 2.00% / Loan 3: 2.00% annual appreciation rate,* ††Estimates based on 8 year projections,


Let's take a look at a home purchase verses renting. When we consider the tax benefits provided by a mortgage loan, plus the benefit of home appreciation, owning a home can prove to be a substantial advantage.

Ownership versus Renting
	Total Payments	Tax Benefits	Appreciation	Total Cost	Total Savings*
*Current Rent*	$147,013	N/A	N/A	$147,013	N/A
Loan 1	$130,819	$36,715	$52,006	$42,098	$104,915
Loan 2	$149,871	$41,304	$52,006	$56,561	$90,452
Loan 3	$166,747	$43,599	$52,006	$71,142	$75,871

Estimates based on 8 year projections, tax benefits are based on a 37% tax bracket, rent payments of $1,425 based on 2% annual increase *Home appreciation based on Loan 1: $300,000 / Loan 2: $300,000 / Loan 3: $300,000 sale price and Loan 1: 2.00% / Loan 2: 2.00% / Loan 3: 2.00% annual appreciation rate,

The following pages will provide a detailed description of each loan considered as well as performance estimates. If you have any questions please call me at 310-555-1234. Thank you for considering ACME Mortgage. Sincerely, Joe Officer

prepared for:	prepared by:
Mr & Mrs Robert Average 1234 Oak Street Torrance CA 90505 310-555-1234, 310-555-6547 average@loanvibe.com	Joe Officer ACME Mortgage 1234 Main Street Torrance, CA 90503 310-555-1234, 310-555-6525 joe@perfectfinancial.com


Transaction Descriptions	Loan 1	Loan 2	Loan 3

Loan Name:	Standard Fixed	Standard w/ PMI	Standard w/ PMI at 95%
Lender Name:	In House	In House	In House
Type:	30 year FIXED	30 year FIXED	30 year FIXED

Start Rate:	5.500%	5.500%	5.500%
Points:	1.000%	2.000%	1.000%
Adjustable Description: [adjs,caps]	Fixed	Fixed	Fixed

APR:	5.59%	5.74%	5.68%
Loan Amount:	$240,000	$270,000	$285,000
Closing Costs:	$2,400	$7,088	$5,700

Last Payment Month:	360	360	360
Income Required to Qualify:	$4,802	$5,487	$6,062
Qualify Ratios:	19/19%	21/21%	22/22%

Start Payment w/PMI [PITI]:	$1,585	$1,811	$2,000
Property Value:	$300,000	$300,000	$300,000
Property Appreciation:	2%	2%	2%

Loan to Value [LTV]:	LTV: 80%	LTV: 90%	LTV: 95%
Down Payment Required:	$60,000	$30,000	$15,000
Cash Required to Close:	$62,400	$37,088	$20,700

Private Mortgage Insurance [PMI]:	0.00%	0.13%	0.50%
Borrower's Monthly Income:	$8,500	$8,500	$8,500
Borrower's Tax Bracket:	37%	37%	37%

prepared for:	prepared by:
Mr & Mrs Robert Average 1234 Oak Street Torrance CA 90505 310-555-1234, 310-555-6547 average@loanvibe.com	Joe Officer ACME Mortgage 1234 Main Street Torrance, CA 90503 310-555-1234, 310-555-6525 joe@perfectfinancial.com


Worksheet	Loan 1	Loan 2	Loan 3
Evaluation for month: 060
Accum Costs	$66,067	$78,713	$81,305
Accum Costs Compare	lowest	higher by $12,646	higher by $15,238
Accum Payment	$81,762	$93,669	$104,217
Accum Payment Compare	lowest	higher by $11,908	higher by $22,455
Accum Tax Benefits	$23,557	$26,501	$27,974
Evaluation for month: 072
Accum Costs	$78,166	$92,324	$95,672
Accum Costs Compare	lowest	higher by $14,158	higher by $17,506
Accum Payment	$98,114	$112,403	$125,060
Accum Payment Compare	lowest	higher by $14,289	higher by $26,946
Accum Tax Benefits	$28,033	$31,537	$33,290
Evaluation for month: 084
Accum Costs	$90,024	$105,665	$109,754
Accum Costs Compare	lowest	higher by $15,641	higher by $19,730
Accum Payment	$114,466	$131,137	$145,904
Accum Payment Compare	lowest	higher by $16,671	higher by $31,437
Accum Tax Benefits	$32,421	$36,474	$38,500
Evaluation for month: 096
Accum Costs	$101,630	$118,721	$123,535
Accum Costs Compare	lowest	higher by $17,091	higher by $21,906
Accum Payment	$130,819	$149,871	$166,747
Accum Payment Compare	lowest	higher by $19,052	higher by $35,928
Accum Tax Benefits	$36,715	$41,304	$43,599

prepared for:	prepared by:
Mr & Mrs Robert Average 1234 Oak Street Torrance CA 90505 310-555-1234, 310-555-6547 average@loanvibe.com	Joe Officer ACME Mortgage 1234 Main Street Torrance, CA 90503 310-555-1234, 310-555-6525 joe@perfectfinancial.com


Chart
Chart based on Accum Costs