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Does early payoff penalties apply when you sell a home?

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oshaugnessy Joined: 26 Aug 2008 Posts: 2 1.61 Dollars($)	Posted: Tue Aug 26, 2008 6:26 am    Post subject: Does early payoff penalties apply when you sell a home? Like 0 Dislike 0 I have an owner financed mortgage of $20,000.00 at 10% for 23 years with a pre-payment penalty clause. If I sell my home, does this constitute early payment of the loan? I am in the State of Florida. The owner's attorney is telling me the loan payoff amount is $ 66,795.00, but I thought it was not the same if you sell the home vs. paying off a loan early to get out of the loan. I just want to sell my home.
laphillips Community Expert Joined: 10 May 2008 Posts: 134 Location: Yucaipa, CA 33.92 Dollars($)	Posted: Tue Aug 26, 2008 9:50 am    Post subject: Does early payoff penalties apply when you sell a home? Like 0 Dislike 0 Hello oshaugnessy, Since laws & regulations vary by state & locale your best bet here is probably to reread your loan documents pertaining to the prepayment clause. Generally prepayment of your loan would include a sale since the goal is to pay off the balance ending the loan obligation. If you still have questions it sounds like it might be beneficial to consult another attorney (one other than the seller's) for clarification. Even if you pay for the consultation (you might be able to get a free consultation) there's a lot of money involved here. _________________ Lynnette Phillips Loan Officer/Realtor, Foreclosure Consultant Home Pride Mortgage My Blog: http://activerain.com/helpingufindaway My website: http://lynnettephillips.com **This is not intended as legal advice. I am not an attorney.**
oshaugnessy Joined: 26 Aug 2008 Posts: 2 1.61 Dollars($)	Posted: Tue Aug 26, 2008 10:51 am    Post subject: Prepayment Penalty Like 0 Dislike 0 Thank you for your quick response. At this time the mortgage simply states "no prepayment allowed". I have contacted a different attorney - and I am also trying to renegotiate the prepayment penalty clause with the owner 'sans her attorney'. Thanks again.
helping_user Joined: 31 Mar 2006 Posts: 806 Location: Hawaii 158.49 Dollars($)	Posted: Wed Aug 27, 2008 1:33 am    Post subject: RE: home sale and prepayment Like 0 Dislike 0 Welcome Donna. A prepayment is all about paying off the loan early, be it through the home sale or with your own funds. But when the contract states "no prepayment allowed", then I don't think it allows you to sell the home now. But if you do so, it will be a violation of the contract and hence the owner can ask you for a penalty. Let's the hope the attorney is able to negotiate with the owner. All the best
gmakerley Community Mentor Joined: 09 Nov 2007 Posts: 12330 Location: bloomfield, ct 50.03 Dollars($)	Posted: Thu Aug 28, 2008 6:22 am    Post subject: Like 0 Dislike 0 how does the payoff go from a balance of $20K to an overall total of $66K? that seems most unreasonable. _________________ George M. Akerley Independent Contractor - Mortgage Consultant Word of Excellence Editing/Writing/Proofreading 860-221-5044
brian1 Community Expert Joined: 14 Jun 2008 Posts: 448 Location: Northern California 15.61 Dollars($)	Posted: Thu Aug 28, 2008 5:16 pm    Post subject: Like 0 Dislike 0 Not just unreasonable but illegal _________________ Licensed Broker 50 states http://www.aimwithfocus.com Live Chat available Need quick advise email or PM Glad to help Pre-approvals www.applyonlinesecure.com

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