(12C) Refinancing: When refinancing “resets” the clock.

[Eddie W. Shore]

Sometimes when a long term mortgage is refinanced, the original length of term is reset. We will assume payments are made monthly.

Input:

Store the following amounts in the registers:

Clear the TVM variables by pressing [ f ] [x<>y] (CLEAR FIN)
Original number of payments, [ n ]
Annual rate, [ 12÷ ] [ I ]
Loan Amount, [ PV ]

Number of payments that have been made prior to refinance, [STO] [ 0 ] (R0)
New annual rate, [ENTER], 12, [ ÷ ], [STO] [ 1 ] (R1)

Run the program by pressing [R/S]. The original payment is calculated. Press [R/S] again to get the balance. Enter any additional monies (can be $0.00) received due to the refinance. Finally, press [R/S] again, and the new payment is calculated.

Program:

Code:


STEP    CODE    KEY
01    45, 11    RCL n
02    44, 2    STO 2
03    14    PMT
04    14    PMT \\ calculate payment
05    31    R/S
06    45, 0    RCL 0
07    11    n
08    15    FV
09    31    R/S  \\ calculate balance, ask for amount of withdrawn
10    30    -
11    16    CHS
12    13    PV
13    0    0
14    15    FV
15    45, 1    RCL 1
16    12    i
17    45, 2    RCL 2
18    11    n
19    14    PMT
20    43, 33, 00    GTO 00

Example:

A couple purchased a house for $185,000. The mortgage lasts for 30 years (360 months) with a 4.8% interest rate (0.4% periodic rate). 180 payments have passed, and the couple is able to refinance the mortgage (but pay that amount in 30 years) at a rate of 3.84%. $15,000 is also cashed out.

Input:

360 [ n ]
0.4 [ i ]
185000 [PV]
180 [STO] [ 0 ]
0.32 [STO] [ 1 ]

Results:

[R/S] -970.63 (The original payment is $970.63)
[R/S] -124,373.78 (Balance of $124,373.78)
Enter 15000, press [R/S] -652.60 (New payment is $652.60)