Exam 16: Commercial Mortgage Types and Decisions

Commercial real estate loan application packages typically contain cash flow estimates that look at the expected cash flow from rental operations for the subject property.Specifically,lenders provide the borrower with a discounted cash flow analysis commonly referred to as a(n):

Given the following information,calculate the loan-to-value ratio of this commercial loan.Estimated net operating income in the first year: $150,000,Debt service in the first year: $100,000,Loan amount: $1,000,000,Purchase price: $1,300,000

In order to better understand a borrower's probability of default,lenders have a number of tools at their disposal.The ratio that measures the percentage of the price (or value)of a property that is encumbered by the first mortgage is referred to as the: