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Your firm sets the maximum mortgage amount using the debt coverage ratio, which is defined as NOI divided by debt service. The maximum debt coverage
Your firm sets the maximum mortgage amount using the debt coverage ratio, which is defined as NOI divided by debt service. The maximum debt coverage ratio for this property is set at 1.6. Using this rule, your boss authorizes you to issue a fully-amortizing, 7-year FRM with a 6.5% interest rate.
2. Using this information, what is the annual debt service, the monthly mortgage payment, the total loan amount, and the LTV that youre willing to lend to your client?
PURCHASE PRICE 5500000
NOI Year 1 393800
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