Question

A loan commitment of $4.43 million with an up-front fee of 60 basis points and a back-end fee of 35 basis points. The take-down on the loan is 40 percent. Calculate the total fees you will pay on this loan commitment.

Answer 1

Answer:

Total fees paid = $2,700,085

Explanation:

Given:

Loan Amount = $4,430,000

Up-Front basis fee = 60 points

Back-end fee = 35 points

Take down = 40 %

Computation:

Up-Front basis fee = $4,430,000 x 0.0060

Up-Front basis fee = $26,580

Back-end fee = $4,430,000 x 0.0035

Back-end fee = $15,505

Take down amount = $4,430,000 x 40%

Take down amount = $1,772,000

So

Total fees paid = [$4,430,000 - $1,772,000] + $26,580  + $15,505

Total fees paid = $2,700,085