Answers - Real Estate

If you are about to get your first mortgage, you should not enter the market blindly.

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

Here are 4 key mortgage terms to help you get started:

1. LTV

Your Loan-to-

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

alue (LTV) ratio is the amount you are borrowing divided by the lesser of the apprais

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

d value or purchase price. For example, if you were buying a home selling for $100,00

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

that is also worth $100,000, and you are borrowing $80,000, then your LTV is 80%. Qu

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

lifying for high LTV loans is harder to do, and they usually feature higher interest

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

rates and penalties to compensate lenders for their enhanced risk.

2. DTI

Yo

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

r Debt-to-Income (DTI) ratio is tabulated by dividing your monthly debt by your gross

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

monthly income. The target line for this is usually 50%; however, there are lenders w

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

o will consider you with a DTI up to 60%. Remember, though, this is based on “gross i

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

come” and does not include things like your groceries, gas, electricity, etc. So, eve

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

n a 50% DTI could be tight financially.

3. Escrow

Including your taxes and i

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

surance in your monthly mortgage payment is known as “escrowing.” Lenders take one tw

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

lfth of your annual tax and insurance bill, add it on top of your monthly payment, an

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

then when they are due, they pay them for you.

4. PMI

Private Mortgage Insu

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

ance (PMI) can be a very expensive thing for borrowers. This fee is essentially an in

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

surance premium that you pay for your lender to cover the loss they would incur if yo

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

fail to make your payments. This fee is usually imposed on all conventional loans th

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

t exceed 80% LTV.

Representing only a fraction of all there is to know, these 4 term

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

should at least keep you from being helpless in the hands of your prospective lender

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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Answers - 4 Mortgage Terms You Must Know

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