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Zero prepayment assumption |
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Zero prepayment assumptionThe assumption of payment of scheduled principal and interest with no payments.Zero prepayment assumption Similar MatchesFHA prepayment experienceFHA prepayment experienceThe percentage of loans in a pool of mortgages outstanding at the origination anniversary, based on annual statistical historic survival rates for FHA-insured mortgages. PrepaymentsPrepaymentsPayments made in excess of scheduled mortgage principal repayments. Prepayment feePrepayment feeIn the US, a fee charged to a borrower by a lender when a loan or mortgage is repaid ahead of schedule. In the UK, building societies impose a similar charge, typically binding the borrower to at least three years of repayments if such a charge is to be avoided. Prepayment penaltyPrepayment penaltyA fee a borrower pays a lender when the borrower repays a loan before its scheduled time of maturity. Lag response of prepaymentsLag response of prepaymentsA delay of typically about three months between the time the weighted-average coupon of an MBS pool crosses the threshold for refinancing and observation of an acceleration in prepayment speed is observed. Further SuggestionsPrepayment speedPrepayment penalty |
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