![]() |
Mortgage Prepayment Penalties - Just Say NoOne of the most common terms found in a new home loan is a prepayment penalty. This type of penalty says that if the borrower pays off the loan early, commonly during the first five years of the loan, then the borrower will be responsible for paying an additional amount of money, typically about six months interest on 80% of the mortgage balance. Sub-prime market loans will typically carry prepayment penalties more than standard mortgage loans. You may plan on keeping the house for the entire duration of the prepayment penalty, and be tempted not to worry about it much. But sometimes life circumstances change, so it's wise to avoid any type of prepayment penalty if you can. A typical prepayment penalty might equal five months worth of monthly loan payments, so it's worth checking on. Of course, you should always ask (before you sign) if a new loan has a prepayment penalty. In fact, ask the lending officer to point out to you in the document where a prepayment penalty is discussed. Most items in a loan are subject to negotiation. If you haven't signed loan papers yet, and you find that your loan has a prepayment penalty, you might offer to pay an additional closing point or so to see if it can be removed. The key at this stage is that if you agree to the prepayment penalty, you should try to find ways to reduce either the amount, the term, or both as much as possible. If you already have a loan, you are bound by the terms of the document, unless you can negotiate them. There are perfectly legitimate reasons why you may want to pay off a note early - most often, due either to refinancing or selling the house. You may be able to contact your lender to see if they will waive the prepayment penalty if they are able to provide refinancing. If interest rates have dropped a lot, and you can't get out of the prepayment penalty, it may be worth rolling that amount into a new loan. And of course, try to get the new loan without a prepayment penalty. About The Author Jakob Jelling is the founder of http://www.cashbazar.com. Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.
Mortgage Interest Rates Today, December 6, 2023 | Rates Down Ahead of Next Week's Fed Meeting Business Insider 'Buy Now, Refinance Later' Mortgage Deals Luring New Homebuyers | Florida Realtors Can You Get A Mortgage Without A Job? A Complete Guide Zing! Blog by Quicken Loans Current Mortgage Rates Money What is a cash out refinance? How to get money from your mortgage Business Insider India How soon can you refinance a mortgage? CNN Underscored Today's FHA refinance rates Business Insider India Mortgage Loan Originators: What Do They Do? Zing! Blog by Quicken Loans Current VA refinance rates today Business Insider India Mortgage refinance demand spikes as rates fall Greater Baton Rouge Business Report Mortgage refinancing: What is it, and how does it work? CNN Underscored How much does it cost to refinance a mortgage? CNN Underscored Top Auto Loan Refinancing Lenders NerdWallet Current FHA interest rates Business Insider India Refinance Appraisal: How It Works And What To Expect Bankrate.com Mortgage Interest Rates Today, December 3, 2023 | Rates Remain Low After Dropping Last Week Business Insider Is Now a Good Time for a Mortgage Refinance? NerdWallet Mortgage Rate Forecast for 2024 USA TODAY Refinance mortgage applications hit two-month high Mortgage Professional Current Student Loan Interest Rates in December 2023 Business Insider Mortgage Interest Rates Today, December 7, 2023 | Rates Low So Far This Month Business Insider India VA loan refinance: What is it and how does it work? Yahoo Finance Mortgage rates are falling at fastest pace since the 2008 crash Business Insider Current national mortgage and refinance rates, November 27, 2023 | Majority of rates rise Bankrate.com MBA: Mortgage Applications Increased in Weekly Survey Calculated Risk Mortgage refinance: What is it and how does it work? Yahoo Finance 15-Year Mortgage Refinance Rates: Compare Current Rates Business Insider Home Loans For Single Moms | 2023 Programs And Assistance The Mortgage Reports When Should You Refinance Your Mortgage? Bankrate.com Mortgage Interest Rates Today, December 2, 2023 | Rates Are Down, and They Should Drop More in 2024 Business Insider The Great Pandemic Mortgage Refinance Boom - Liberty Street Economics Liberty Street Economics - What Credit Score Do I Need To Refinance? Bankrate.com The best mortgage lenders for refinancing in December 2023 CNN Underscored How To Choose The Right Kind Of Refinance For You Bankrate.com Will Mortgage Rates Go Down in 2024? What Homebuyers Should Expect Business Insider 7 Ways To Refinance A Mortgage With Bad Credit Bankrate.com Mortgage Interest Rates Today, December 1, 2023 | Rates Fall Further, Boosting Affordability Business Insider Exclusive: S.F.'s Stonestown mall owner closes on refinancing $180M mortgage San Francisco Chronicle Cash-out refinance: How does it work? CNN Underscored Compare today's mortgage and refinance rates, November 24, 2023 - Majority of rates increase Bankrate.com Mortgage Interest Rates Today, November 30, 2023 | Rates Dip Even Further as Markets Eye Fed Cuts Business Insider How Long Does It Take To Refinance A House? Zing! Blog by Quicken Loans What Is A Second Mortgage And How Does It Work? Bankrate.com How Soon Can I Refinance My Mortgage? | Mortgages and Advice | U.S. News U.S News & World Report Money Seven Hills Realty Trust Closes $29.0 Million Bridge Loan to Refinance a Hospitality Property in Anaheim, California Business Wire 2 Reasons Why a Free Mortgage Refinance Could Be Right for You The Motley Fool
|