Examples of prepay in a Sentence
Special orders must be prepaid.
Recent Examples of prepay from the Web
Houstonians who rushed to prepay their 2018 property taxes in hope of receiving a soon-to-expire deduction will still be subject to new rules under the federal tax code overhaul set to take effect next month, per Internal Revenue Service guidelines.
At the Cherry Hill tax office, the big question was how much to prepay.
Residents would have to be alerted to the option and given instructions about how to prepay over the holidays.
The Republican bill is silent, however, on prepaying 2018 state and local property taxes.
Since the final federal tax bill appeared on Friday, many people have had questions about prepaying taxes, a wide-ranging strategy that encompasses various efforts to save money by paying some taxes early.
Many taxpayers and their advisers have been considering prepaying 2018 state taxes that won’t be deductible in order to get a deduction in 2017.
Not all counties are allowing their citizens to prepay property taxes.
And the architects of the Republican bill barred taxpayers from prepaying in 2017 any state or local income taxes that will face next year.
These example sentences are selected automatically from various online news sources to reflect current usage of the word 'prepay.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
First Known Use of prepay
Financial Definition of PREPAY
What It Is
Prepayment occurs when a borrower pays off a loan earlier than expected.
How It Works
For example, let's say that John Doe borrows $300,000 to buy a house in Phoenix. The loan is a 30-year mortgage at 5% interest. John lives in the house for five years and makes his payments on time every month. However, in year six, he gets a job offer in Philadelphia and decides to move there. Accordingly, he sells his house. At the closing, the buyer gives John $500,000 for his house. John uses $250,000 to pay off the remaining balance on the loan instead of making 25 more years of payments. John has prepaid the loan.
Why It Matters
When a borrower prepays a loan, the borrower saves a lot of interest. But that means the lender also misses out on all that interest. Accordingly, prepayment can sometimes come with a penalty, and this is disclosed in the loan documents.
People who invest in pass-through securities are also frequently concerned about prepayment. That's because those securities that receive payments from an intermediary that collects payments from a pool of assets. The most famous of these is mortgage-backed securities (MBS), which represent an interest in a pool of mortgage loans.
When people move, as we’ve seen, they sell their houses, payoff their mortgages with the proceeds, and buy new houses with new mortgages. When interest rates fall, many homeowners refinance their mortgages, meaning they obtain new, lower-rate mortgages and pay off their higher-rate mortgages with the proceeds. This means the lenders and the MBS investors miss out on interest income due to prepayment.
PREPAY Defined for English Language Learners
PREPAY Defined for Kids
Seen and Heard
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