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### What does CC mean in real estate?

 

Have you ever seen the term "CC" (i.e. Asking $165,000 + CC) and wondered, what does that mean? CC simply means closing costs.

 

### What are closing costs?

 

Closing costs are the fees you see on a [HUD-1](https://www.offermarket.us/real-estate-glossary/hud-1) or [ALTA](https://www.offermarket.us/real-estate-glossary) settlement sheet related to the transfer of the property from the seller to the buyer:

 

#### Government Recording and Transfer Charges

 

- Transfer tax
- Recording fees: Deed (buyer pays), Mortgage Release (seller pays)
- City/County tax/stamps: Deed
- State tax/stamps: Deed
- Recordation Tax

 

#### Title Charges

 

- Settlement or closing fee
- Owner's title insurance (may be optional depending on state)
- Lender's title insurance (if applicable)
- [CPL](https://www.offermarket.us/real-estate-glossary/cpl) (if applicable)

### Related terms:

 

- [ISAOA/ATIMA](https://www.offermarket.us/real-estate-glossary/isaoa-atima)
- [Mortgagee Clause](https://www.offermarket.us/real-estate-glossary/mortgagee-clause)
- [Contract Of Sale](https://www.offermarket.us/real-estate-glossary/contract-of-sale)
- [HUD-1](https://www.offermarket.us/real-estate-glossary/hud-1)
- [ALTA](https://www.offermarket.us/real-estate-glossary)

In real estate investing, CC means closing costs. There's more to learn at OfferMarket.

CC - Closing Costs - OfferMarket Real Estate Glossary

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What is CC in real estate?

## What is a ALTA Settlement Statement?

 

ALTA is the American Land Title Association and the ALTA Settlement Statement is a standardized form that itemizes the debits and credits for the buyer and seller in a real estate transaction.

 

### There are four versions of the ALTA Settlement Statement:

1. ALTA Settlement Statement Combined
2. ALTA Settlement Statement Seller
3. ALTA Settlement Statement Borrower/Buyer
4. ALTA Settlement Statement Cash

 

#### See: [all ALTA and HUD-1 settlement statements](https://drive.google.com/drive/folders/1Q1I-B7FVaTGQJO7XFQxw5fs7r9Ai5pAh)

 

The title attorney or real estate attorney conducting the real estate settlement will provide a ALTA to the seller and the buyer. It's important to carefully review the ALTA to make sure there are no errors. This document is then signed by the seller and the buyer at closing.

 

### Related terms:

 

- [HUD-1](https://www.offermarket.us/real-estate-glossary/hud-1)
- [ISAOA/ATIMA](https://www.offermarket.us/real-estate-glossary/isaoa-atima)
- [Mortgagee Clause](https://www.offermarket.us/real-estate-glossary/mortgagee-clause)
- [CC](https://www.offermarket.us/real-estate-glossary/cc)

ALTA stands for the American Land Title Association. In real estate closings, the ALTA is a settlement statement which is used instead of the HUD-1 in certain cases.

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ALTA Settlement Statement - OfferMarket

What is ALTA in real estate?

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## What is a Prepayment Penalty?

 

If you are a rental property investor shopping for a [DSCR loan](https://www.offermarket.us/blog/dscr-loan), you have probably come across the concept of a prepayment penalty. A pre payment penalty is a fee charged to the borrower for paying off the loan during a specified period of time. 

 

## Why do lenders charge a prepayment penalty?

 

Private lenders charge a pre-payment penalty to avoid a scenario where a loan is originated and then quickly paid off through a refinance or sale. In exchange for a competitive interest rate, the lender is looking to secure a longer duration of interest payments. 

 

Let's take a moment to review common pre-payment penalty options and share insights to help you choose the best option for your next financing. 

 

## 5-4-3-2-1 Prepayment Penalty

 

A **5-4-3-2-1 prepayment penalty**, otherwise known as a 5 year stepdown prepayment penalty, charges a 5% fee on the outstanding principal loan balance if the loan is paid off in year 1, a 4% fee in year 2, a 3% fee in year 3, a 2% fee in year 4, and a 1% fee in year 5. If the loan is paid off in year 6, there will be no prepayment penalty. 

 

The 5-4-3-2-1 prepayment penalty option carries a slightly lower interest rate than other pre payment penalty options, typically by 0.15% compared to the 3-2-1 prepayment penalty option, and is particularly popular among buy and hold rental investors during times of low interest rates.

 

## 3-2-1 Prepayment Penalty

 

A **3-2-1 prepayment penalty**, otherwise known as a 3 year stepdown prepayment penalty, charges a 3% fee on the outstanding principal loan balance if the loan is paid off in year 1, a 2% fee in year 2, and a 1% fee in year 3. If the loan is paid off in year 4, there will be no prepayment penalty. 

 

The 3-2-1 prepayment penalty option carries a slightly higher interest rate than the 5-4-3-2-1 option, typically 0.15%, and is particularly popular during times of elevated interest rates, because the borrower will be able to cost effectively refi after only a few years. The 3-2-1 pre payment penalty is the most popular option among clients of OfferMarket Capital. 

 

## 3-0-0 Prepayment Penalty

 

A **3-0-0 prepayment penalty**, charges a 3% fee on the outstanding principal loan balance if the loan is paid off in year 1, and no prepayment penalty thereafter. The 3-0-0 prepayment penalty option carries a higher interest rate than the 5-4-3-2-1 option, typically 0.4%, and is worth considering if you want to have a cost effective option to sell or refinance after the first year. 

 

## 1-0-0 Prepayment Penalty

 

A **1-0-0 prepayment penalty**, charges a low 1% fee on the outstanding principal loan balance if the loan is paid off in year 1, and no prepayment penalty thereafter. The 1-0-0 prepayment penalty option carries the highest interest rate compared to the 5-4-3-2-1 option, typically 0.65%. Like the 3-0-0 option, this is only worth considering if you expect to sell or refinance the property soon after the loan is originated. Many private lenders will require loan committee approval to offer this option, since the borrower may be trying to use this option instead of a short term bridge loan which typically carries a considerably higher interest rate. 

 

## Extra payments on DSCR Loan

 

Many borrowers do not realize that partial prepayment of principal during the prepayment penalty period are subjected to a penalty fee. So, if you have a 5-4-3-2-1 prepayment penalty clause, and you make a $1,000 additional payment towards your principal loan balance during year 1, you will be charged a 5% fee of $50. 

 

## Prepayment Penalty for Fix and Flip Loan

 

While pre payment penalties are a standard term for DSCR loans, they are not common for short term fix and flip loans. 

 

## Instant DSCR Loan Quote and Pre-Approval

 

Our friendly and knowledgeable relationship managers are always happy to review loan requests and help you select the best pre payment penalty option for your real estate investing goals. For instant DSCR loan quotes and pre-approval, visit [OfferMarket Capital](https://www.offermarket.us/loans).

A prepayment penalty is a fee charged by a lender when the loan is repaid within a designated period of time. Prepayment penalties are common for DSCR loans from private lenders.