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Prepayment speeds can be expressed in SMM (single monthly mortality), CPR (conditional prepayment rate, which is the annually compounded SMM), or PSA (percentage of the Public Securities Association prepayment model). For mortgages at least 30 months old, 100% PSA = 6.0% CPR = 0.51% SMM, equivalent to the full prepayment of 6% of a pool's ...
A prepayment penalty discourages borrowers from paying more or paying off the loan.
Commercial mortgages often contain lockout provisions (typically a period of 1–5 years [2] where there can be no prepayment of the loan) which they can be subject to defeasance, yield maintenance and prepayment penalties to protect bondholders. European CMBS issues typically have less prepayment protection.
Some online banks offer high-yield savings accounts with rates that rival or even exceed no-penalty CDs. Minimum opening deposits. Many no-penalty CDs require minimum deposits of $500 to $1,000.
Prepayment penalties are very common, yield maintenance is one of the most typical forms of prepayment penalty. Moreover, some institutions charge flat fees and percentages that typically range from 1% to 5% of the unpaid principal if the loan is paid in full or partially by more than the scheduled payment by the amortization period.
The exact amount of a prepayment penalty varies from one lender to the next. In general, you can expect the fee to range from 2 percent to 5 percent of your loan.
Since the 2007–2008 financial crisis, lenders have started to focus on a new metric, debt yield, to complement the debt service coverage ratio. Debt yield is defined as the net operating income (NOI) of a property divided by the amount of the mortgage.
Based on the 28% rule, your household should aim for an before-tax monthly income of $7,714 — or an annual gross income of about $92,568 ($7714 x 12) — to comfortably afford a $300,000 mortgage.