financing

Question 1

What is the primary focus of Module 4 in Development Financing?

Answer 1

The critical resource of Financing in Property Development

Question 2

What is generally needed to finance a development project?

Answer 2

A large portion of capital

Question 3

What is the concept of Financing in development?

Answer 3

You need this much money to do this thing based on these details

Question 4

What are Capital Costs?

Answer 4

The costs needed to bring a project to a commercially operable status, including:
* Purchase of the Land
* Permits and Legal Costs
* Construction Costs
* Financing Costs
* Capital Assets

Question 5

What does LTV stand for in financing?

Answer 5

Loan-to-Value percentage

Question 6

What factors influence different lending terms offered by lenders?

Answer 6

Developments risk profile and percentage of personal investment

Question 7

What are the basic terms common to Personal Mortgages and Development Financing?

Answer 7

Amortization, Annual Percentage Rate, Interest Rate, Down Payment, Principal, Equity, Mortgage Insurance, Closing Costs, Loan to Value Percentage

Question 8

What does Amortization refer to in mortgage payments?

Answer 8

The reduction of the loan balance with each mortgage payment

Question 9

What is the Amortization Period?

Answer 9

The time over which the mortgage is to be completely repaid

Question 10

What is a Mortgage Term?

Answer 10

The length of time committed to a mortgage rate, lender, and conditions

Question 11

What does the Annual Percentage Rate (APR) represent?

Answer 11

The true cost of your loan, including interest rate plus fees and other costs

Question 12

What is the difference between Interest Rate and APR?

Answer 12

Interest Rate is the cost to borrow money; APR includes additional fees

Question 13

What is a Down Payment?

Answer 13

The amount of money put towards the total purchase price, deducted from it

Question 14

What is Principal in the context of a mortgage?

Answer 14

The amount you borrowed

Question 15

What is Equity in real estate?

Answer 15

The difference between what you owe on your mortgage and the market value of the property

Question 16

What does a 65% LTV mortgage indicate?

Answer 16

The lender will advance as much as 65% of the appraised value of the property

Question 17

What is Mortgage Insurance?

Answer 17

Insurance mandatory for buyers with less than a 20% down payment, protecting lenders against loss

Question 18

What are Closing Costs?

Answer 18

Legal and administrative costs needed to be paid when closing a deal

Question 19

What is a real estate appraisal?

Answer 19

The process of developing an opinion of value for real property, usually market value

Question 20

What is the Gross Debt Service Ratio (GDS)?

Answer 20

The ratio that should not exceed 39% of your gross household monthly income for housing costs

Question 21

What is the Total Debt Service Ratio (TDS)?

Answer 21

The ratio that should not exceed 44% of your gross monthly income including total debt load

Question 22

What is a High-Ratio Mortgage?

Answer 22

Any mortgage with less than a 20% down payment requiring mortgage default insurance

Question 23

What is a Conventional Mortgage?

Answer 23

A mortgage without any high-ratio or lender insurance premium, with down payments of 20% or more

Question 24

What types of loans are included in Development Affordability?

Answer 24

• Land Acquisition Loans
• Site Development Loans
• Building Construction Loans

Question 25

What is meant by 'Skin-in-the-game' in development financing?

Answer 25

The amount of personal capital you have to invest in a project

Question 26

What is a key factor in the approval of loans such as construction loans?

Answer 26

The amount of Personal Capital or 'Skin-in-the-game' you have to invest ## Footnote This indicates the borrower's financial commitment to the project, which can significantly influence loan approval.

Question 27

What percentage of land value may be required from a borrower for a Site Development or Land Acquisition Loan?

Answer 27

Up to 50% ## Footnote This percentage may vary depending on the lender, particularly for private lenders.

Question 28

What additional documents are required for Building Construction Loans?

Answer 28

* The mortgage application * Drawings and Plans * Budgets (Itemized) * Construction Timelines * An Overall Construction Plan ## Footnote These documents help lenders assess the feasibility and planning of the construction project.

Question 29

What is the purpose of a development feasibility analysis?

Answer 29

To include all necessary information for loan approval and project viability ## Footnote This analysis is crucial for understanding whether a development project is financially sound and viable.

Question 30

What is the focus of the course mentioned in the text?

Answer 30

Developing a feasibility analysis for development financing ## Footnote The course aims to equip learners with the skills to analyze and create feasibility studies for financing projects.

Question 31

What is the first assignment related to Development Financing?

Answer 31

Complete Module 4 – Development Financing - Assignment 1 ## Footnote This includes reading the assignment thoroughly and uploading it as per the instructions.

Question 32

Fill in the blank: The mortgage application may include _______.

Answer 32

[personal net worth statements] ## Footnote Personal net worth statements help lenders evaluate the borrower's financial stability.

Question 33

True or False: Construction loans only require financial documentation.

Answer 33

False ## Footnote In addition to financial documents, construction loans require various planning and project management documents.