Debt Constant Magic
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95 Reviews
Participants explore the debt constant, assessing interest rates, amortization, and payment frequency to determine maximum term debt an income property can support per lender standards.
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| Self-Study | Add to Cart |
Certificate
0.5 Credit
Cost
1 hr.
Duration
n/a
Prep Time
1
Quiz
Overview
In this short self-study course, participants review the debt constant and the role of interest rates, amortization periods, and payment frequencies in setting the debt constant for a specific financing. They review its use and application in identifying the maximum amount of term debt an income producing property can support, given a lender's underwriting standards.
Who Should Take This Course
Analysts and lenders interested in understanding the use and application of the debt constant in establishing maximum term financing for an income producing property based on existing rather than stabilized property cash flow.
Prerequisites
General familiarity with an operating statement for an income producing property and the application of underwriting standards in establishing term financing for an income producing property.
Objectives
By the end of the course, participants will be able to:
- Explain the characteristics and features of the debt constant and the factors that determine its value.
- Apply the debt constant to identify the maximum amount of term financing that can be supported by an income producing property's cash flow, given the interest rate, amortization period, and payment frequency of the financing.
- Assess the importance of using historical property records and documents to determine existing and likely future property cash flow rather than routinely accepting "what if" estimates embedded in an appraisal report.
Materials(access provided with registration)
- Credit Refresher on Debt Constant Magic
- Online Quick Hit Review Quiz
- Webinar Poll Solutions
- Exercise Solutions
