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Compute maximum loan amount using the debt coverage ratio

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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 $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

Reference no: EM132623621

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