Question

Question 1 Discussion with lenders indicates that a loan can be obtained for 75% of a...

Question 1

Discussion with lenders indicates that a loan can be obtained for 75% of a property's market value. Loan terms will probably be 8% interest, 20-year amortization (monthly payments), with the rate renegotiable after 7 years. The property is estimated to be worth $200,000.

A. How much can be borrowed?

B. What will be the annual debt service?

C. What is the expected annual loan constant?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Question 2 A property is expected to generate $300,000 of NOI over the next 12 months....
Question 2 A property is expected to generate $300,000 of NOI over the next 12 months. Discussion with lenders leads to the conclusion that the minimum acceptable debt-coverage ratio will be 1.20 and that loan terms will be 8% per annum, with 20-year amortization (monthly payments). A. What is the maximum supportable annual debt service? Solve 3 ways: - the PV or PMT functions on Google Sheets - your HP 12c (tell me which keys you used) -the Mortgage Constant...
A property has an expected first-year NOI of $1 million. Recent sales of similar properties indicate...
A property has an expected first-year NOI of $1 million. Recent sales of similar properties indicate that a first-year (or going-in) cap rate of 12% is reasonable for valuation purposes. A lender requires a minimum DSCR of 1.25x and will loan up to 75% of appraised value on a first mortgage. Say the mortgage interest rate is 6.75%, payments are monthly, and the amortization period is 20 years. (10 points)  Hint: solve for the debt service. what is the implied loan...
A mortgage is a loan used to purchase a home. It is usually paid back over...
A mortgage is a loan used to purchase a home. It is usually paid back over a period of 15, 20, or 30 years. The interest rate is determined by the term of the loan (the length of time to pay back the loan) and the credit rating of the person borrowing the money. Once a person signs the documents to borrow money for a home, they are presented with an amortization table or schedule for the mortgage that shows...
1)You want to buy a house and wonder what you can afford. Banks look at collateral,...
1)You want to buy a house and wonder what you can afford. Banks look at collateral, creditworthiness and capacity (ability to pay) when making loans. Assume you have sufficient down payment and credit score. Your bank has a requirement of 28% housing expense ratio and your gross annual income is $69,000. Based on those assumptions, how much can you afford to pay in total housing costs each month? 2) You are looking to purchase a new home that is listed...
1-What should an investor pay for an investment property promising a $200,000 return after 10 years...
1-What should an investor pay for an investment property promising a $200,000 return after 10 years if a 7% annual return (compounded annually) on investment is projected? 2-Given the following information on a 30-year fixed-payment fully-amortizing loan, determine the remaining balance that the borrower has at the end of five years. Interest Rate: 4%, Monthly Payment: $3,000 3-An investor has an opportunity to invest in a rental property that will provide net cash returns of $2,000 per month for 10...
1. One advantage of Adjustable Rate Mortgages (ARM) is that a. lenders face lower levels of...
1. One advantage of Adjustable Rate Mortgages (ARM) is that a. lenders face lower levels of interest rate risk than a fixed rate mortgage. b. the outstanding loan balance can be adjusted regularly. c. the default risk of borrowers is lower than under a fixed rate mortgage. d. All of the above. 2. Gilbert takes out a 23-year adjustable rate mortgage loan for $6,000,000 with monthly payments. The first two years of the loan have a “teaser” rate of 2%,...
You just bought a rent house for $200,000, with $40,000 down and the balance in the...
You just bought a rent house for $200,000, with $40,000 down and the balance in the form of a 15-year amortization mortgage at a fixed rate of 4.0% and monthly payments. Your principal, interest, property tax, and insurance, plus all costs of maintaining the property, are covered by your rent. a) How much are your monthly mortgage payments? b) The University grows, and prices appreciate at the rate of 6% per year. What will the value of the house be...
You are shopping for a house and wonder what you can afford. Banks look at collateral,...
You are shopping for a house and wonder what you can afford. Banks look at collateral, creditworthiness and capacity (ability to pay) when making loans. Assume you have sufficient downpayment and credit score. Your bank has a requirement of 28% housing expense ratio and your gross monthly income is $5,450. How much can you afford to pay in principal, interest, taxes an insurance (PITI) each month? Show how you calculated how much you can afford to spend on a home...
Ivy Terrace The third property was Ivy Terrace, a 75-unit garden apartment project under construction near...
Ivy Terrace The third property was Ivy Terrace, a 75-unit garden apartment project under construction near Arlington, Virginia. There was a building moratorium in parts of the county because of inadequate public facilities, preventing much short-term competition. The property was for sale for $11.2 million, but the broker was certain it could be purchased for $11 million. A 10-year, $7 million mortgage at a 4.25% interest rate had been arranged. The loan had a 30-year amortization period. The land was...
15-6. Alumco Industries must install $1 million of new computer equipment in its Ontario plant. It...
15-6. Alumco Industries must install $1 million of new computer equipment in its Ontario plant. It can obtain a bank loan for 100% of the required amount. Alternatively, Alumco believe3ns that it can arrange for a lease financing plan. Assume that these facts apply: (1) The computer equipment falls into asset Class 45 with a declining balance CCA rate of 45%. (2) Estimated maintenance expenses are $50,000 per year. (3) The firm's tax rate is 34%. (4) If the money...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT