 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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