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marklavender1 · Joined: 13 Sep 2009 Posts: 120 -0.14 Dollars($)

What is the max prepayment penalty on a mortgage

Niicss · Posted: Mon Sep 28, 2009 1:40 am Post subject:

The maximum pre-payment penalty would depend upon the clause as mentioned in your mortgage doc. The mortgage documents would specify as to what type of pre-payment penalty the lender may charge you.

gmakerley · Posted: Mon Sep 28, 2009 8:31 am Post subject:

no such thing as "maximum"...a lender and a borrower can negotiate whatever terms they wish when agreeing on a mortgage loan.

annyb27 · Joined: 07 Jul 2009 Posts: 144 -1.08 Dollars($)

I think prepayment penalty differs as per region(location)

jveenstra · Posted: Thu Oct 01, 2009 2:17 pm Post subject: Prepayment Penalty

Each state has its own maximums for prepayment penalties. Those state laws probably just cover lenders who are regulated/chartered by the state.

The states ask Federally chartered lenders to abide by their regulations, but, a state has no authority over any federal institution.

The federal government just established some prepayment penalty regulations:
1. Can not have any prepayment penalty that lasts longer than two years
2. If refinance with the same lender, no penalty
3. The payment of principal and interest can not change over the first four years of the loan.

These are new regulations and not clear yet what it controls--maybe only primary residences--owner occupied properties, and maybe only hich cost loans.

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