Ann wants to buy a building. The annual NOI for the building will be $165,000. She wants to get a 20 year interest only fixed rate mortgage at an annual rate of 7.35% with annual compounding and annual payments to buy the building. The lender has a minimum Debt Service Coverage Ratio (DSCR) of 1.25. The lender also has a maximum LTV requirement of 70%. The asking price is $3,000,000. What is the largest mortgage the lender will give Ann based on both the DSCR and LTV requirements? A. $1,795,918.37 4 OB. $2,100,000.00 OC. $2,532,047.61 OD. $132,000.00
Ann wants to buy a building. The annual NOI for the building will be $165,000. She wants to get a 20 year interest only fixed rate mortgage at an annual rate of 7.35% with annual compounding and annual payments to buy the building. The lender has a minimum Debt Service Coverage Ratio (DSCR) of 1.25. The lender also has a maximum LTV requirement of 70%. The asking price is $3,000,000. What is the largest mortgage the lender will give Ann based on both the DSCR and LTV requirements? A. $1,795,918.37 4 OB. $2,100,000.00 OC. $2,532,047.61 OD. $132,000.00
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 15P
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![QUESTION 5
Ann wants to buy a building. The annual NOI for the building will be $165,000.
She wants to get a 20 year interest only fixed rate mortgage at an annual rate
of 7.35% with annual compounding and annual payments to buy the building.
The lender has a minimum Debt Service Coverage Ratio (DSCR) of 1.25. The
lender also has a maximum LTV requirement of 70%. The asking price is
$3,000,000.
What is the largest mortgage the lender will give Ann based on both the DSCR
and LTV requirements?
A. $1,795,918.37
OB. $2,100,000.00
OC. $2,532,047.61
OD. $132,000.00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fecfe598f-5115-495a-994e-2672f72d790b%2Ffc1a9d22-2868-436e-a194-ae61809570d1%2Fywmwd4e_processed.jpeg&w=3840&q=75)
Transcribed Image Text:QUESTION 5
Ann wants to buy a building. The annual NOI for the building will be $165,000.
She wants to get a 20 year interest only fixed rate mortgage at an annual rate
of 7.35% with annual compounding and annual payments to buy the building.
The lender has a minimum Debt Service Coverage Ratio (DSCR) of 1.25. The
lender also has a maximum LTV requirement of 70%. The asking price is
$3,000,000.
What is the largest mortgage the lender will give Ann based on both the DSCR
and LTV requirements?
A. $1,795,918.37
OB. $2,100,000.00
OC. $2,532,047.61
OD. $132,000.00
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