Finance
What is 'loan constant' (mortgage constant) and how is it used in Delaware real estate?
AThe fixed interest rate on a mortgage
BThe ratio of annual debt service to the total loan amount, representing the annual percentage of the loan paid in debt service✓ Correct
CThe constant monthly payment amount on a fixed-rate mortgage
DA standard factor for calculating loan payments used by lenders
Explanation
The loan (mortgage) constant = Annual Debt Service ÷ Loan Amount. It represents the annual cash required per dollar of debt. Used to compare financing costs and analyze investment returns when combined with the cap rate.
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