A property has NOI of 1,000,000 and would trade at a cap rate of 5%. You can borrow at a 60% LTV, 5% interest rate and 25-year amortization schedule. What is the value of the property? What is your debt service coverage?
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A property has NOI of 1,000,000 and would trade at a cap rate of 5%. You can borrow at a 60% LTV, 5% interest rate and 25-year amortization schedule.
- What is the value of the property?
- What is your debt service coverage?
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- A borrower is purchasing a property for $180,000 and can choose between two possible loan alternatives. The first is a 90% loan for 25 years at 9% interest and 1 point and the second is a 95% loan for 25 years at 9.25% interest and 1 point. Assuming the loan will be held to maturity, what is the incremental cost of borrowing the extra money? O 12.01% O 14.34% 13.50% O 13.66%A property has a maturing loan and needs to be refinanced. It is appraised at $25 million based on a cap rate of 6%. Your lender has put two constraints on your next loan. It must have debt service coverage of 1.5x and LTV of 50%. Interest rates are 5% and the lender offers you a 10-year loan with a 20- year amortization schedule. Which constraint limits your loan? How much can you borrow?A property has a FMV of $7,500,000. If the property owner can only secure a loan with an LTV of 70%, a loan amortization of 30 years, and an interest rate of 8.125%, then a) What is the monthly payment for this loan? and b) What is the outstanding balance on the loan after eight years?
- A borrower can obtain an 80% loan with an 8% interest rate and monthly payments. The loan is to be fully amortized over 25 years. Alternatively, he could obtain a 90% loan at an 8.5% rate with the same loan term. The borrower plans to own the property for the entire loan term. solve with finanical calucltor What is the incremental cost of borrowing the additional funds? How would your answer change if 2 points were charged on the 90% loan? Would your answer to part (b) change if the borrower planned to own the property for only 5 years?Considering the following information, what is the NPV if the borrower refinances the loan? Expected holding period: 3 years; current loan balance: $400,000; current loan interest: 5.875%; remaining term on current mortgage: 15 years; new loan interest: 3.625%; new loan term: 15 years; cost of refinancing: $6,000. Assume that the opportunity cost is 10%. Should the borrower refinanceA borrower is purchasing a property for $200,000 and can choose between two possible loan alternatives. Loan A is a 90% loan for 25 years at 8% interest and 2 points and Loan B is a 95% loan for 25 years at 8.75% interest and 1 point. Assume the loans will be held to maturity, what is the incremental cost of borrowing the extra money? Assume that the loans will be repaid in 5 years. What is the incremental cost of borrowing the extra money? Rework parts (a) and (b) assuming the lender is charging 3 points on Loan A and 2 point on Loan B. What is the incremental cost of borrowing?
- A borrower is purchasing a property for $180,000 and can choose between two possible loan alternatives. The first is a 90% loan for 25 years at 9% interest and the second is a 95% loan for 25 years at 9.25% interest. Assuming the loan will be held to maturity, what is the incremental cost of borrowing the extra money? 18.75% OO 14.34% 13.50% 12.01%A borrower can obtain an 85 percent loan with an 6 percent interest rate and monthly payments. The loan is to be fully amortized over 25 years. Alternatively, he could obtain a 95 percent loan at an 6.5 percent rate with the same loan term. The borrower plans to own the property for the entire loan term. Required: a. What is the incremental cost of borrowing the additional funds? (Hint: The dollar amount of the loan does not affect the answer.) b. What is the incremental cost of borrowing the additional funds if 2 points were charged on the 95 percent loan? c. What is the incremental cost of borrowing the additional funds if the borrower planned to own the property for only five years?A borrower can obtain an 80 percent loan with an 9 percent interest rate and monthly payments. The loan is to be fully amortized over 25 years. Alternatively, he could obtain a 95 percent loan at an 9.5 percent rate with the same loan term. The borrower plans to own the property for the entire loan term. Required: a. What is the incremental cost of borrowing the additional funds? (Hint: The dollar amount of the loan does not affect the answer.) b. What is the incremental cost of borrowing the additional funds if 2 points were charged on the 95 percent loan? c. What is the incremental cost of borrowing the additional funds if the borrower planned to own the property for only five years? Complete this question by entering your answers in the tabs below. Required A Required B Required C What is the incremental cost of borrowing the additional funds if the borrower planned to own the years? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Incremental…
- A borrower can obtain an 80 percent loan with an 8 percent interest rate and monthly payments. The loan is to be fully amortized over 25 years. Alternatively, he could obtain a 90 percent loan at an 8.5 percent rate with the same loan term. The borrower plans to own the property for the entire loan term. a. What is the incremental cost of borrowing the additional funds? (Hint: The dollar amount of the loan does not affect the answer.) b. What is the incremental cost of borrowing the additional funds if 2 points were charged on the 90 percent loan? c. What is the incremental cost of borrowing the additional funds if the borrower planned to own the property for only five years?A borrower can obtain an 80 percent loan with an 8 percent interest rate and monthly payments. The loan is to be fully amortized over 25 years. Alternatively, he could obtain a 90 percent loan at an 8.5 percent rate with the same loan term. The borrower plans to own the property for the entire loan term. a. What is the incremental cost of borrowing the additional funds? (Hint: The dollar amount of the loan does not affect the answer.) b. How would your answer change if two points were charged on the 90 percent loan? c. Would your answer to part (b) change if the borrower planned to own the property for only five years?A borrower is purchasing a property for $1,800,000 and can choose between two possible loan alternatives. The first is a 75% loan for 25 years at 9% interest and 1 point and the second is an 80% loan for 25 years at 9.25% interest and 1 point. Assume the loan term will be 5 years. What is the incremental cost of borrowing the extra money?