FAQ 5 -

How can I minimize my prepayment penalty?

Methods to minimize the impact of prepayment penalties:

Currently, many borrowers are faced with a dilemma: Should they refinance now and pay a significant penalty, or should they wait until the penalty disappears, hope that rates are still attractive and refinance at that point in time? There is a very interesting solution to solve this dilemma. I am pleased to report that we are handling several transactions where we are locking in an interest rate now for a borrower where the closing will not occur until much later. In some cases, the closing can occur 10, 11 or even 12 months from the day that we initiate the process. This can allow a borrower to achieve the best of both worlds:

1) to lock in lowest possible interest rate now, and

2) to minimize the prepayment penalty on their current loan.

Any borrower with either a fixed or a yield maintenance prepayment penalty with 12 to 24 months remaining until maturity can benefit from this forward commitment and early rate lock program. Please give us a call if you would like to discuss in greater detail whether this program would be beneficial to you or your client.


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