Tag: Profit Strategies

How To Convince A Potential Borrower To Refinance With Your Bank

Swap Hedge ARC Idea

The Challenge

 

Let’s say you want to refinance a loan for a borrower that is at another bank and the loan has a prepayment penalty on it. The borrower has two options: 1) Refinance today and pay the penalty, or 2) Let the loan mature and then refinance at the then prevailing rate. We have tried all different methods and the way best to frame this problem is to present the solution in the following manner:

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