An Investor Is Considering Refinancing a Property

question 32

Multiple Choice

An investor is considering refinancing a property.The current mortgage has an interest rate of 8.75% and a mortgage balance equal to 45% of the property value due to amortization of the loan and some appreciation in value.However,the investor would like to refinance at an amount equal to 75% of the property value.He has found out that the property can be refinanced at a 75% loan-to-value ratio for 9.5% interest over 15 years.What can be said about the incremental cost of refinancing?

• A)It will be higher than 9.5%
• B)It will be less than 9.5%
• C)It will be equal to 9.5%
• D)Can't tell without additional information

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A company incorporated under the laws of one country but doing business in another country, subject to specific regulatory and tax obligations.

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The process of legally declaring a business as a corporation, which is recognized as a separate entity from its owners.