A developer is offering loans on new properties at 9% for 25 years. However, her current...

 

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A developer is offering loans on new properties at 9% for 25 years. However, her current required rate of return for the project is 9.5%. The property would normally sell for $110,000 without any special financing and 100% LTV loan а. At what price should the builder sell the properties to earn, in effect the required rate of return on the loan? Assume that the builder would have the loan for the entire term of 25 years b. How would the answer change in (a) if the property is expected to be sold after 10 years and the loan repaid A developer is offering loans on new properties at 9% for 25 years. However, her current required rate of return for the project is 9.5%. The property would normally sell for $110,000 without any special financing and 100% LTV loan а. At what price should the builder sell the properties to earn, in effect the required rate of return on the loan? Assume that the builder would have the loan for the entire term of 25 years b. How would the answer change in (a) if the property is expected to be sold after 10 years and the loan repaid

Answer rating: 100% (QA)

Loan repayment is referred to as an action of paying back money that which the borrower takes f... View the full answer