we want to refinance our house in Massachusets but the lender we have now says we have to pay an early termination fee. Is there such law in my state that says we have to.
2006-08-09 10:44:15 · 3 answers · asked by edtrrs 1 in Business & Finance ➔ Renting & Real Estate
It's called a pre-payment penalty (PPP) and yes you could have one on your loan. Your lender should have informed you of that when you originally took the loan. You should read your documents from your mortgage to see if one is stated anywhere therein.
How long ago did you take on your current mortgage, PPP's are usually for 2-3 years. so it may be worthwhile to hold off for a couple months to avoid it.
Where in MA are you? Bring the paperwork to my office and we can go over it for free.
2006-08-09 10:58:30 · answer #1 · answered by ReggieWjr1 4 · 0⤊ 0⤋
It's not a legal issue it's a problem with the bank you are using. Many do have pre-payment penalties but you have to make sure you find a company that doesn't.
For home equitiy loans, for example, many banks tack on an early termination fee as a way to discourage you jumping around.
How much is that fee? If you are going to stay in the house for 10 years, the fee may be nothing. But I would go to another finance company (Countrywide, Wells Fargo, etc.) since they don't typically have repayment fees on first mortgages. Perhaps the exception would be if you have credit problems.
2006-08-09 10:49:42 · answer #2 · answered by QandAGuy 3 · 0⤊ 0⤋
Read your original loan statement.
Some lenders do have a penalty clause. Most do not.
Countrywide is one that does.
2006-08-09 10:48:26 · answer #3 · answered by ed 7 · 0⤊ 0⤋