The internal rate of return on a mortgage loan calculated from the lender's perspective is more commonly referred to as the: Multiple Choice O discount point. O effective borrowing cost.
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- Credit scoring is a process used to Multiple Choice determine what interest rate to charge a borrower, based on risk considerations. determine the amortization period for a term loan, based on risk considerations. calculate a borrower's return on equity. calculate a borrower's leverage position.Note: 1 discount point = 1% of loan amount a)Calculate the effective borrowing cost to the borrower. b) Compute Lender's Yield. c) Based on the effective borrowing cost, which loan would you choose? Explain your answer using your calculations from a) and b).Interest prepaid by the buyer, which may be used to reduce the stated interest rate the lender charges, are known as ▼ margins. points. payment caps. variable investments.
- Which is not a metric used by lenders to measure the overall suitability of a loan: 1) Loan to value ratio 2) Debt service coverage 3) Debt yield. 4) Effective rent per square foot choose 1The discount rate used in a net present value analysis is the ________. A. rate of interest earned on a savings account B. rate of inflation C. rate of interest charged for debt financing of an investment D. required rate of return or the hurdle rateWhat is the Relationship between the Incremental Cost and the Loan-to-Value Ratio?
- If you were comparing the costs of loans from different lenders, could you use their APRs to determine the loan with the lowest effective interest rate?To account for a down payment, adjust the _____ of the loan by subtracting it from the loan amount. O present value (pv) future value (fv) rate O typeLoan Amount Is $430,000 Loan is a 7/30 Balloon Loan Annual Interest is 3.75%, with monthly payments What Is the monthly payment for the loan? Enter as a positive number
- are designed to indicate the potential default risk that lenders are undertaking when they grant a loan. Repayment capacity ratios O Financial efficiency ratios Profitability ratios Solvency ratios Liquidity ratiosExplain the difference between debt to income (DTI) ratio and loan to value ratio (LTV). In addition, mention in which scenario the mortgage is likely to be insured, (a) High or low DTI ( b). High or low LTV.(c) Does every loan, which consists of an initial outlay followed by a sequence of re- ceipts, have a yield? Explain your answer.