What are some lenders that waive pre-payment penalty fee's?
2006-10-18 05:51:08 · 10 answers · asked by obsidien24 1 in Business & Finance ➔ Renting & Real Estate
The pre-payment penalty is not paid to the new lender, it is paid to the lender on the loan you pay off. It's not something you really have control over at this point.
In general, the only time they will waive the prepayment penalty is if you refinance with them in such a way as they believe is to *their* advantage, and then they don't really waive it - they roll it into a whole new prepayment penalty on the loan.
Now an earlier answerer was close to correct - but deadly wrong - about who puts pre-payment penalties on their loans. All subprime lenders will, although you can "buy them off" by accepting a higher rate or paying more in cost up front. But many A paper lenders are getting to the point where they will sneak them in if they can, as it gets them paid more. They'll quote you a slightly lower rate, so that they appear to be more competitive than they really are, well aware that they are going to make it up with a big windfall from sticking you with a prepayment penalty. One of my favorite questions to tell people to ask is "And what is it without any pre-payment penalty?" This often catches scum-bags off guard, and is a legitimate question.
2006-10-18 07:35:01 · answer #1 · answered by Searchlight Crusade 5 · 0⤊ 0⤋
Ask your lender about the different types of loans available and which come with a pre-payment penalty. In some states it is not legal to charge a pre-payment penalty. If you apply for a consumer loan, you must, by federal regulation, be given a TIL or Truth-in-Lending disclosure. Included in the information on this disclosure is whether or not there is a prepayment penalty.
Many residential mortgages do not carry a pre-payment penalty, however, some lenders offer a better rate if you agree to a pre-payment penalty. Depending on your individual situation (e.g, how long you plan to have the loan) you will want to decide whether it makes more sense to take the lower rate with the penalty or a higher rate without a penalty.
2006-10-18 06:03:12 · answer #2 · answered by mortgagelns 3 · 0⤊ 1⤋
Spot is incorrect...some loans have pre-payment penalties, others do not. Some are "hard pre-pays", (set amount regardless of term) some are "soft prepays", (longer you hold the loan, the less you have to pay over set timeframe) is not the "lender", but the type of loan that you have in the first place that determines the pre-pay.
Many people will take a hard pre-pay to reduce their loan rate.
If you are looking to refinance, and you are trying to get out of your pre-pay, the best way to do it is to contact the company holding your loan and tell them that you are going to re-fi with another company unless they can do it and waive the pre-pay.
The market is currently so competitive that there is a really good chance they will do it.
If you have good credit and are able to buy down a rate, you may qualify for no pre-pay. The rates are usually higher though.
It's best to see a mortgage planner and he/she can tell you exactly which banks are worth pursuing. If you're in CA, I can help you out.
2006-10-18 06:09:50 · answer #3 · answered by pknutson_sws 5 · 0⤊ 0⤋
Most programs you can buy-out the prepayment fee, if there's any to begin with. The more difficult your loan, the more likely you will be offered a prepayment penalty. Ask how much to buy it out.
2006-10-18 09:34:31 · answer #4 · answered by Anonymous · 0⤊ 0⤋
NONE, to answer your question. pre payment penalties are tax deductible to you. The only lender that "MAY" waive is one you now have a mortgage with. These loans are mostly sub-prime loans. Some conforming loans have them as well and they may be what is called a soft pre-pay in the event of a sale they may waive but in a reffi not.
2006-10-18 06:00:53 · answer #5 · answered by golferwhoworks 7 · 0⤊ 2⤋
no lender does this. Only whoever is currently servicing your loan can waive it and they would only do that if it was to their advantage. Depending on your tax braket and your income profile you might be able to write off SOME of the penalty. Consult your cpa.
2006-10-18 07:07:13 · answer #6 · answered by ondreforsure 3 · 0⤊ 0⤋
Just for clarification, a hard prepay is a penalty given for selling or refinancing the property before the term is up, a soft prepay is a penalty given to those who refinance, if you sell you are not penalized.
2006-10-18 07:35:36 · answer #7 · answered by Dali 1 · 0⤊ 0⤋
There are no pre-pay penalties on conventional "Prime" loans, only on "sub-prime" loans, i.e. bruised credit, high loan-to-value, etc.
2006-10-18 10:19:01 · answer #8 · answered by Justin 3 · 0⤊ 0⤋
For residential mortgage loans, nobody charges prepayment fees anymore. For commercial mortgage loans, most do.
2006-10-18 05:53:54 · answer #9 · answered by spot 5 · 0⤊ 3⤋
If you are "prime" as in-- you have good credit or 20% down, none of them will charge that. Its something for 'sub-prime' loans.
2006-10-18 06:05:05 · answer #10 · answered by Anonymous · 0⤊ 3⤋