@George Bell The DSCR loans I researched did not allow prepayment of the loan, there was a massive penalty that would have offset the benefits.

We have offered they can terminate their lease at no penalty charge because frankly they complain a lot and are unhappy with the residence.

Your 401k administrator will help you set this up and usually you have to make monthly payments. 4) If you default on your 401k loan, the entire balance is distributed to you, then you have to pay taxes and a 10% premature withdrawal penalty.

As far as the specified penalty it states that if any provision of the lease is violated, in this case early termination, the security deposit is forfeited.

I didn’t paid the 10% penalty fee. 

The parties can pay off the note for principal balance, late fees, penalties, back interest and legal fees any time before the actual foreclosure.  

In our contract with them, it stated that we are bound to work with them for the next few months (if we break the contract there are penalties or smth like this).

It's not terrible that you allowed him to break the lease with no penalty, but you should be firm in the termination.

Lock-in Period or Terms:Lock-in periods for DSCR loans typically are a 5-year stepdown prepayment penalty, this is a good balance between flexibility and cost, but they offer flexible term lengths.

If the tenant was to leave they have two month penalty as part of the early termination, but it is hard to find a tenant after October until March as people move during the spring and summer time.