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Original loan amount & rate: $500K, 2.85% Monthly payment: $2,100
TRADITIONAL PREPAYMENT
Sell home & Pay Off amount:
Not a viable alternative based on higher market rates.
$420K, 7.0%
RDP
PREPAYMENT
New loan amount & rate to refinance:
$2,800
New monthly payment:
Decrease outstanding debt and increase home equity by $80K.
THE
BENEFITS
When using ARMs, even lower monthly payment
Business Case Example
CURRENT
TAKARA PROGRAM
Total assets: $30 billion
Portfolio FRM (#,$): 7,500, $5 billion
Avg. rate: 3.5%
Total unlocked value: $600 million
Borrower benefit per loan: $85,000
Bank fee per loan: $7,500
Bank Benefits
- New fees
- Origination flow
- Capital relief
- Improved liquidity
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