EXPLANATION OF CALCULATOR ‘There are only 3 pieces of information the calculator asks from the user: 1. Users date of birth and, if applicable, users spouses date of birth 2. Users home value 3. What is owed on the home On the back-end/admin the calculator will have the following data, all of which can be changed/updated by admin: 1. list of closing costs (a spreadsheet will need to be used for one of the closing costs as it corresponds to the home value) 2. Principal limit factor table (from excel spreadsheet table) ‘a. This table contains ages that will correspond with the date of birth input by the user b. The age will correspond with a percentage factor that will be based on the home value input by the user c. The percentage factor will change according to the interest rate being used ‘Afield containing the desired profit per transaction 4, Atable containing interest rates, percentage factors and profit percentages based on loan amounts (excel spreadsheet table) 5, Additional profit field based on specific scenarios The calculator will take how old the youngest person will be within 6 months from the current day and using that number it will find the corresponding age on the table. From there, it will identify the lowest available interest rate from the adjustable rate table and from the fixed rate table. For the purpose of generating a 3" result, the calculator will calculate an initial balance based on a total of 60% of the total calculated amount or the amount that will result in $0 closing costs, whichever is less. Using the age and the interest rate, it will pull the percentage factor trom the table. The percentage factor will be used to calculate the gross loan amount from the home value amount input by the user. If the home value input by the user exceeds $726,525 then the calculations will default toa home value of $726,525. This will generate a gross loan amount. From the gross loan amount will be subtracted total closing costs and what is owed on the home. The profit percentage is calculated based the interest rate, the starting balance and the percentage of the gross loan amount thal he starting balance represent. Desired profit ~ If the calculations produce a profit that is less than the desired profit specified, the origination fee should reflect the difference between the total calculated profit and the desired profit amount.‘The origination fee amount cannot exceed the amount produced by the following formula: 2% up to $200,000 in home value, then 1% of the value above $200,000, not to exceed a total of $6,000. The calculation results should show 3 options: 1. The lowest rate option ‘a, Result should be based on the lowest available interest rate, pulled from the products list 2. The lowest cost option 44. Resull shuuld be based on Calculating te producing the highest profit percentage, taking the profit percentage amount, subtracting the desired profit amount and applying the remaining as a credit toward the closing cost total. 3. Fixed rate option a, Result should be based on the lowest available fixed rate form the products list. Jest iaxinnurn draw Uf funds while‘CALCULATOR FORMULA Age = Today's date minus date of birth (if today’s date minus date of birth is < x.5 then answer isx or if today's date minus date of birth is >x.5 then answeris x + 1) Home Value = if home value > $726,525 then home value is $726,525 or if home value is < $726,525, then home value is home value. Interest rate = refer to current lender rate sheet table. (If using fixed rate then fixed rate is used to calculate loan amount. If using adjustable rate then expected rate is used to calculate loan amount. While expected rate is used for calculations for the adjustable rate options the initial interest rate is what will be displayed under ‘interest rate’ for all adjustable rate options on the results and review pages of the calculator.) Closing Costs (fixed rate) = mortgage insurance is 2% of home value + title insurance (refer to title fee table sheet. Take home value and round UP to the nearest thousand) + recording fees + wiring fees + courier fees + settlement fee + reconveyance fee + credit report + flood certification + origination fee (if Using fixed rate then refer to current lender rate sheet table). Borrower credit = rate sheet percentage of calculated principal limit. f customer incentives > total closing costs then customer incentives = total losing costs or if customer incentives < closing costs then customer incentives = customer incentives.) Closing Costs (adjustable rate) = mortgage insurance is 2% of home value + title insurance (refer to title fee table sheet. Take home value and round UP to the nearest thousand) + recording fees + wiring fees + courier fees + settlement ee + reconveyance fee + credit report + tlood certification + Voc Prep Fee (see closing cost table for amounts) + origination fee (.5% of home value) — customer incentives (to calculate customer incentives begin by first: multiplying the loan amount by the corresponding adjustable rate premium percentage found on the lender rate sheet table. Second: add the calculated origination fee and the rate premium dollar amount to arrive at a total dollar amount. Third: ifthe total dollar amount is less than or equal to the desired profit amount then customer incentives equal $0. However if the total dollar amount is greater than the desired profit amount then any amount above the desired profit amount is the total customer incentives not to exceed the total closing cost amount. ifthe total customer incentive amount exceeds the total closing cost amount then the customer incentive amount must default to the total closing cost amount.) Interest Rate Factor Percentage = Take the expected or fixed interest rate percentage from the lender rate sheet which in this explanation will be represented by the letter ‘X’. The interest rate on the HECM Formula table which is just below X will be represented by the letter ‘A’. The interest rate on the HECM Formula that is just above X will be represented by the letter ‘B’. Therefore in order to determine what interest rate is used from the HECM Formula table to calculate loan amounts, the formula would be as follows:IX AthenX=A therefore to arrive at the appropriate interest rate factor percentage X must always = A Using the information above, the formula for calculating the loan figures are as follows: Home Value x Interest Rate Factor Percentage = Loan Amount Loan Amount ~ Closing Costs + Customer incentives = Net Funds AvailableYour date of birth WM) DD YYYY Spouse's date of birth (if applicable) MM DD YYYY Home value (estimate is ok) $ Total owed on your home $ submitYour date of bith 10 15 1950 Spouse's date of birth (if applicable) 10 15 1950 Home value (estimate is ok) $300,000 Total owed on your home $50,000Tos learn more learn more ite LOWEST LOWEST PAYOUT COST FIXED ee i ce Your Mortgage Pay-off $50,000 $50,000 $50,000 aD $88,000 $108,000 $108,000 the first 12 months Funds available Eran start over