Some homes take longer to sell than others, adding anxiety to sellers who absolutely have to get a transaction closed within a specific period of time. And, when it rains, it pours. For example, I recently got a call from a former college classmate who had taken a new job in a different state. After his home sat on the market for months, he finally struck a deal with a potential buyer. For weeks the deal appeared to be headed to closing, and the seller, feeling confident with the buyer's borrowing power, had even made a down payment on another home. The seller became upset, however, when the buyer walked away from the deal because the buyer would not agree to a "soft prepay" loan provision offered by a national lender. A "soft prepayment penalty" or "soft prepay" loan is a requirement some lenders now are demanding to help curtail borrowers from quickly refinancing their loans as soon as interest rates drop. The "soft" limitation allows the borrower to prepay the loan with...
by Brad Inman | on Mar 21, 2017
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