Pre-Payment Structures

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Need help understanding prepayment penalties?

On Rand CRE, Will Coleman and Mike Taravella discuss two types of prepayment penalties for agency debt.

Yield Maintenance and Step Down

Yield Maintenance requires that all of the interest which would be paid out through the life of the loan be paid to the investor who owns the loan through a security.

A Step Down is a fee based on a percentage of the loan. The percentage varies depending on the term of the loan.

Have any questions about prepayment penalties?
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