I have a client that wants to sell his 2br 2bath condo it was purchased for 220k. He wants to net 20k in the deal the loan has a prepayment penalty if paid before June of 2006. What would be my best course of action for this deal? Help!!!
Message from Robert Clark Real Estate Investor and Mortgage Lender.
Well that all depends on when he bought it and what type of Prepayment penalty it is. Meaning hard or soft. If the prepay was a hrad one then it would be for 6 months of interest, which they couldn’t sell or refi. If it was soft one or modified then they could sell but not refi. Usually it is either for 1-5 years not more than that.
Depending on the sellers situation…maybe they need to sell asap and take the hit. As for ideas on how to get around this I can’t advise you or your client on which way to go with it. It is either pay or wait until the time comes due. Also maybe the lender will cut then some slack if it closer to the date of expiration on it.
RC
Thanks, that was some very helpful info to get me going in the right direction.
;D