I have a friend who is getting into a prepayment penalty on a 3 year prepayment penalty and he says the penalty is $500. Does this sound possible?
2006-12-31 05:31:09 · 8 answers · asked by when and how 4 in Business & Finance ➔ Personal Finance
Anything is possible. Which is why you should read a loan agreement closely before you sign.
2006-12-31 05:34:42 · answer #1 · answered by anywherebuttexas 6 · 3⤊ 1⤋
A prepayment penalty can be whatever the lender decides it is. The one you described sounds like the Termination Fee if you close out a Home Equity LIne of Credit in 3 years, the lender will hit you with a $500 termination fee. The state of Maryland has it's own spelled out prepayment penalty, http://www.choicefinance.net/maryland-closing-costs.htm#prepayment
2006-12-31 07:00:21 · answer #2 · answered by Anonymous · 0⤊ 0⤋
A prepayment penalty is whatever the lender specifies in the contract. There is no standard such as "6 months interest."
Many years ago, prepayment penalties were substantial, but competition for loans is now greater, and the institutions who had those high penalties had to back off.
2006-12-31 05:36:24 · answer #3 · answered by David545 5 · 1⤊ 0⤋
The specific prepayment penalty is located somewhere in the documentation he received a thte time of the loan or investment.
2006-12-31 07:58:00 · answer #4 · answered by Inquisitive125 3 · 0⤊ 0⤋
Sounds quite lenient to me. A friend of mine had to pay thousands, that's why you don't get a loan with a prepayment penalty.
2006-12-31 06:46:54 · answer #5 · answered by parsonsel 6 · 0⤊ 0⤋
Absolutely; my prepayment penalty when I sold my house was $350.
2007-01-01 04:36:19 · answer #6 · answered by Anonymous · 0⤊ 0⤋
There are 4 achievable techniques to get out of a prepayment penalty: a million) do not settle for it contained in the first position 2) Wait till it expires 3) some lenders will roll it over to a sparkling mortgage in case you refinance with them. some brokers understand a thanks to be extra persuasive in this element. 4) Win a courtroom case hostile to the lender. i have worked with those who had received a waiver of a prepayment penalty as area of a settlement with their previous lender. regrettably, it truly is usually a remedy it truly is worse than the ailment, even if you win.
2016-12-01 09:05:32 · answer #7 · answered by kuebler 4 · 0⤊ 0⤋
if it isyour home's mortgage, they cannot penalize ypou for paying it off early. (note: a home equity loan is not a mortgage)
2006-12-31 08:13:14 · answer #8 · answered by Ubiquity 2 · 0⤊ 0⤋