How do you know when your prepayment term is over?

Question

If you purchase a home with 1 year prepayment penalty, do you count 1 year from the time of closing date or from the time when you make the first payment?

Answer 1

It's one year from the closing date. Call your mortgage lender and tell them you want to know the exact date your pre-payment penalty will be off. Every lender should have that information handy and ready to answer your question.

Answer 2

When you closed, part of the closing costs was prepaid interest, allowing you to "skip" the first month's payment. So I would guess that it should be from closing date. If I was really going to cut it that close, I would call and ask them to be sure.