Realtor/Investor Prepayment Penalty

[Paul Waddell II]

Hi, I am a super newbie here studying for my real estate license.

I have an odd question about realtors who also own rental properties. Can a realtor put commission checks from other deals towards the mortgage on their rental property to pay it off more quickly? I know some loans charge a prepayment penalty for paying off loans early because it messes with the amortization schedule.

If the goal is cash flow, wouldn’t you want to be paid off ASAP?

Thank You!!!

[Will Gaston]

@Paul Waddell II in my experience pre-payment penalties are more for commercial loans. 

I'm not sure a ton of conventional/residential loans have them but if they do it is likely that they have a stepped down basis (i.e. paying it off after 1 year would be a higher penalty than paying it off after 5 years.)