Compute the maximum loan amount using the Debt Coverage Ratio ( DCR ) method and the information
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Question:
Compute the maximum loan amount using the Debt Coverage Ratio (DCR) method and the information given below.
Purchase price
$950,000
Gross rental income
$75,000
Property expenses
$12,000
Amortising loan over
15
Loan interest rate
8.50%
Payment frequency
monthly
Maximum LVR
70.0%
Minimum DCR
1.5
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