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Chapt20 - Garrett Barnes Chapt 20 1,3,5,6 1 There is much...

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Garrett Barnes Chapt 20 1,3,5,6 1. There is much more emphasis on the property and income generation of the property versus emphasis on the borrower in residential lending. In non-recourse loans the borrower is not considered in detail, but the property is carefully reviewed. In commercial lending the LTV tends to run lower, generally no more than 75%. Commercial loans are not prepayable except with significant penalties. 3. $1,500,000/1.2/12 = $104,166.67 for payments that support $12,412,669 for a 9%, 25-year amortization. The 5-year balloon does not factor into the calculation nor will the LTV unless the appraised value is less than $16,550,225, in which case the LTV will limit the loan to less than that supportable by the income and debt coverage ratio
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