Question
The interest rate on a $10 million loan amortized over 30 years with fixed monthly payments is 5%. The loan matures in 10 years with
The interest rate on a $10 million loan amortized over 30 years with fixed monthly payments is 5%. The loan matures in 10 years with any outstanding balance due as a balloon payment at that time. a. Compute the monthly debt service. (8 points) b. If the loans underwritten DSCR and LTV are 125% and 75%, respectively, find underwritten NOI, property value, and initial loan (debt) yield. (12 points) c. Compute the balloon amount at the end of year 10. (10 points) d. If the owner of the property wants to refinance the balloon for 10 more years at the loan maturity using a 6% interest-only loan, what will be the DSCR and LTV on that loan if NOI and the property value remain unchanged? (10 points)
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