prepayment penalty
Real Estate Minute: Prepayment Penalty Valid?
Real Estate Minute with Ilyce Glink
Prepayment Penalty Valid?
Original Air Date: August 162006
Structuring Real Estate Investment Properties
A real estate investors have created an LLC to separate their personal and business properties. They are having trouble financing due to an increase debt to income ratio. If a large part of your income is from your real estate business or you have enough buildings to affect your income, many residential lenders will have difficulty giving you financing. You should try to find a commercial lender or a residential lender that has extensive experience with people that own many rental properties to help you out in your future deals.
Construction-To-Permanent Loan Ends With Higher Rate
A lender is quoting a higher rate than other lenders for a construction-to-permanent loan. The loan has a prepayment penalty, so the borrowers can’t go with antoher lender. Ilyce recommends going with the original loan to avoid fees and then refinancing as quickly as possible.
Avoid Prepayment Penalty On Mortgage Loans
A mortgage broker is helping a friend refinance a loan that has a prepayment penalty. Unfortunately the mortgage broker may not have much luck. A home cannot be refinanced or sold within the prepayment penalty period without paying a huge fee. Borrowers should avoid loans with prepayment penalties.
Financing New Home After Retirement
There are several options for financing a new home after retirement. If you are looking to finance a new home after retirement, try not to withdraw from accounts where you will be forced to pay a large tax. If you can afford it, the best way to finance a new home after retirement, is to take out a mortgage, rather than withdrawing from retirement accounts.
Canceling A Loan Without Penalty
A closing date is moved several times and the borrower wonders if they can cancel the loan. Your purchase is governed by the terms of your purchase agreement. You must abide by the terms of that agreement or you risk being sued by the seller or losing your escrow deposit, or both.
Selling Your Home With Mortgage Prepayment Penalty
When you sell your home you may face a mortgage prepayment penalty if you still have a mortgage loan. In addition you may have to pay taxes on the profit from the sale. To determine the best way to structure a real estate sale when you have a mortgage loan with a prepayment penalty you should contact a real estate attorney and accountant.
Benefits Of Retirement Accounts Over 529 Plan
Retirement accounts have many benefits that 529 plans don’t have/ If you start closing traditional IRAs (which are pre-tax dollars) and moving them to a 529 plan, you’ll have to pay taxes and the penalty on the cash. You won’t pay taxes on the contributions to your Roth IRA, but you will pay taxes and penalties on any earnings if you switch the funds to a 529 plan. On the other hand, you can withdraw contributions and earnings from your Roth IRA tax and penalty free if you use it to pay for college tuition, medical bills, or a down payment on a first home.
Are Prepayment Penalties Worth Refinancing?
If you have a loan with a prepayment penalty, it may be more costly to refinance to a lower rate than to keep your current loan. If you want to refinance, ask your lender if you are eligible for a streamline refinance or a modified mortgage program. Otherwise, shop around with different lenders to find a refinance that will be worth it.
Mortgage Pay Off Amount Too High
At the end of the calendar year you may receive a statement from your mortgage lender that shows your remaining pay off amount. What if you took out an FHA mortgage and the pay off amount is now too high? You should call your mortgage lender to get clarification on the mortgage pay off amount.
