Real Estate Finance, Ch 12 problems Scenario 3: 70% Debt Financing (LTV = 70%) Required: 1. Complete the tables below for the 80% LTV mortage scenario. 2. Calculate the incremental cost of borrowing for the 80% vs 70% loans. Tax Considerations: Bldng Value Asking Price NOI year 1 Growth-NOI Loan-to-Value Loan Interest Loan term Payments per year Appreciation rate Holding Period Selling costs $2,000,000 $190,000 3.00% 70.00% 10.00% 25 years 12 3.00% $1,600,000 Depreciation 27.5 yrs Tax rate* 25.00%* 5 years 0.00% of sale price *To be applied to all items of income, capital gains and recapture of depreciation