Are there prepayment penalties?

So, my borrowers are asking me to set them up with 2 to 5 year interest-only loans with little to no prepayment penalty.

To do other wise COULD result in a very big penalty for you and a nasty law suite.Yes, you are screw. 

Seasoning is required except for these instances: 1) Got a FixnFlip loan now you want to keep the property2) Paid cash for home, now accessing equity3) PVT/HML that do short term loans, just want to get paid back fast.DSCR lenders on the other hand ( rental property loans) they can have up to 5 years with prepayment penalties.

This is often 2-5 yearsYour plan may not allow transfer of any funds that are not fully vestedYour plan may only allow certain types of funds to transfer such as:After-tax contributions, plus earnings.Rollover amounts, plus earnings.Company match contributions, plus earnings.Before-tax contributions, plus earnings (if you are disabled or have reached age 59½)The Ugly:Make sure your company does not have penalties if you withdraw.

The costs of a CMBS and pre-pay penalties can be a whopper and CMBS very hard to assume the loan by a buyer.  

On a similar note, if your plan is to subdivide, make sure to understand what the prepayment penalties are.

What does it say about fees or penalties incurred?

Depending upon the amount down, your experience, your credit score, the property, prepayment penalty, etc, you're probably in the high 7%s to the mid-8%s.

But it was the guest that cancelled and not me so no penalty....:)