If the interest rate on an existing loan owned by Landmark is at a rate lower than the accepted market rate, how do I achieve my desired return?
A. As an example, if a loan were written at a 6% annual percentage rate and the loan purchaser required 9.5% annual percentage rate as a yield, the company could sell the loan to the purchaser at a discount as follows; Property Sales Price: $22,000.00 Down-payment $ 2,000.00 Terms of Note: Principal Balance: $20,000.00 Rate: 6% Term: 120 Months Payment Amt: $222.04 Amount the loan purchaser pays the company for the $20,000.00 note: $17,159.52 (A discount of $2,840.48 from the $20,000 principal) With the same amount of Monthly cash flow to the Loan purchaser: $222.04 And the same Term for The cash flows to the loan purchaser: 120 Months This equates to a Discount Rate with a 9.5% Yield – Please refer to Yield definition in the Glossary Section of this document. Individual pricing of notes will be available, and will be based on existing note terms and their relationship to market sales.
