Refinance mortgage-what is one implication of this

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Reference no: EM133306335

Ten years ago, an office building received a 4 percent interest-only loan with a debt cover ratio of 1.5. Since that time, the income on the property has risen by ten percent.

It now needs to refinance its mortgage with a 6 percent rate and a 40-year amortization.

Keeping the 1.5 DCR, how does the size of the loan the office building receives change?

What is one implication of this?

Reference no: EM133306335

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