Question: Compute the maximum loan amount using the Debt Coverage Ratio ( DCR ) method and the information given below. Purchase price $950,000 Gross rental income

Compute the maximum loan amount using the Debt Coverage Ratio (DCR) method and the information given below.

Purchase price

$950,000

Gross rental income

$75,000

Property expenses

$12,000

Amortising loan over

15

Loan interest rate

8.50%

Payment frequency

monthly

Maximum LVR

70.0%

Minimum DCR

1.5

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