Compute the biggest mortgage payment Ann can make given her NOI in 2015 computed above.

Note: , which implies the maximum. This is the debt service coverage test.

(2.a) What is the biggest mortgage payment the bank will allow Ann to make given her expected NOI in 2015?

Using the maximum payment, compute the maximum loan Ann can get.

The interest rate is given in the spreadsheet. Use the PMT computed in (2.a)

(2.b) What is the maximum loan amount corresponding to a DSCR of 1.2?

(2.c) What is the biggest loan Ann can get assuming 90% maximum LTV?

(2.d) Assume for the rest of the question that Ann will Borrow the maximum available loan amount. What is the loan that Ann borrows to buy the property?

(2.e) What will Anns annual debt service payment be?

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