Suppose 10-year treasury bond yields in the bond market are


Question: Suppose 10-year Treasury bond yields in the bond market are 7.00% CEY (or BEY), and the mortgage market requires a contract yield risk premium of 175 basis points (CEY). If a property has a net operating income (NOI) of $400,000, and the underwriting criteria require a debt coverage ratio (DCR) of at least 125%, then what is the maximum loan that can be offered assuming a 30-year amortization rate and monthly payments on the mortgage?

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Finance Basics: Suppose 10-year treasury bond yields in the bond market are
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