I want to sell my house and move. I have a prepayment penalty clause in the loan. Are these penalties only applicable to a refinance in the State of California?
2007-03-11 16:17:10 · 5 answers · asked by Stelha 1 in Business & Finance ➔ Renting & Real Estate
It is quite common for a loan to have a pre-payment penalty clause. Most typically it is applied if the loan is paid off within the first two years. It is certainly a big hit (normally 6%) but it might be worth paying in the long run. Only you can know what has factored into your decision to relocate. Possibly you can negotiate with your lender to loan on your next residence and avoid the penalty altogether. Talk to them.
2007-03-11 16:27:31 · answer #1 · answered by carmensellsthehighdesert 3 · 0⤊ 0⤋
No Prepayment Penalties in California are not illegal but probably will be some day. Ok you need to find out what type of Prepayment Penalty you have? Hard or Soft.
Hard Prepay- You cannot refinance or sell your property without taking a penalty incurred by the bank/lender.
Soft Prepay- You can sell the property without taking a penalty but you cannot refinance the property without taking a penalty.
You can find most of this information in your Title Paperwork that you signed or call your bank/lender and ask for a "payoff amount." This will tell you what your overall loan plus penalty's if any.
Any other questions or concerns please email me advise always free.
2007-03-11 17:49:39 · answer #2 · answered by Openthathouse.com 4 · 0⤊ 0⤋
It is legal. The only states that prepayment penalities are illegal that I know of are Iowa, and Alaska. Other states have shorter prepayment penalty requirements. Keep in mind that this amount is a dollar for dollar tax write off for your tax bracket. Your penalty is probably 6%. To figure the penalty just take your non-escrowed monthly mortgage payment and multiplay it by 6. This is the amount you will have to pay and will be able to write off.
2007-03-11 16:50:15 · answer #3 · answered by 1235 4 · 0⤊ 0⤋
prepayments are actually not unlawful. There may be a checklist referred to as a prepayment rider that's a factor of your remaining archives. you will possibly have reviewed this and signed it. yet in lots of circumstances you will possibly might desire to evaluate the earnings between refinancing and arranged...is it going to be properly worth which you will pay 6 months of pursuits... This somewhat relies upon on what your fee is presently and what kind of a value you may get with the recent own loan.
2016-10-18 04:00:09 · answer #4 · answered by ? 4 · 0⤊ 0⤋
Well, it depends..
2016-08-23 20:56:36 · answer #5 · answered by Anonymous · 0⤊ 0⤋