Private money 30 year fixed, prepayment penalty?

[Angelique F.]

Hi,

Im considering taking a 30 year fixed private money loan and wondered, do all or most private lenders penalize you for paying off the 30 year loan early?  I may want to refinance after one or two years because the Rental is producing enough income that I could get a traditional loan.

Thank you!

[Katherine Blazer]

The ones I work with are on a 3-2-1 schedule so 3% the first year, 2% the 2nd, and 1% the 3rd. Then it falls off. It's actually a really good program because it doesn't require any seasoning at all and only requires 6months of reserves for the one property, not your whole portfolio.