On a $170000 5 year fixed mortgage, what would be the penalty we would have to pay getting out of it after 2 years? Thanks.
2007-08-19 11:21:06 · 9 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
It should be spelled out in your documents. I would expect about 8k.
2007-08-19 11:28:31 · answer #1 · answered by Landlord 7 · 1⤊ 1⤋
Nobody has enough information to answer that question.
The answer would be absolutely nothing, unless you have a prepayment penalty.
Your prepayment penalty will dictate how much you have to pay back. Sometimes its 6 months interest. Other times it will be 1%, 2%, 3% of your principal balance.
Some prepayment penalties are only for a year, some are up to 3 to 5 years.
Some prepayment penalties are *Soft* meaning if you sell the property there is no pre-payment penalty. Others are *Hard* meaning you pay the penalty if you sell it or dont sell it.
Here is the best way to find out if you have a prepayment penalty. Call your Customer Service number and ask for payoff. Say what is my payoff if I pay it off today? They say 100K. you say break that down. They will say 99,000 principal balance 1,000 interest. You say thanks you dont have a prepayment penalty.
Call them, they will tell you, or just look at your note. You have to sign a prepayment penalty.
This is assuming you live in the U.S. If you dont I have no clue.
Good Luck.
2007-08-19 18:32:12 · answer #2 · answered by financing_loans 6 · 1⤊ 1⤋
The only way to "get out of it" is to pay it off! If the house is now worth more than the balance you owe on the mortgage, sell the house and pay it off. If not, you are stuck with it, I'm afraid, unless you can come up with the difference!
If the mortgage is due to go to a variable rate, then you may be able to refinance into a fixed rate loan.
2007-08-19 18:31:20 · answer #3 · answered by Anonymous · 0⤊ 1⤋
The pre-payment penalty is usually 6 months worth of interest payments. We would need the interest rate and term to properly figure the penalty (although the figure would be slightly higher than the actual pre-payment penalty).
Take a look at your promissory note. It will tell you the pre-payment penalty term (the length the pre-payment penalty is on your loan) and how much (usually 6 months of the INTEREST PAYMENTS).
2007-08-19 20:00:52 · answer #4 · answered by Martini Babee 4 · 1⤊ 0⤋
I'm not quite sure what you mean. Does your loan have a prepayment penalty? If it does, you need to look at the copy you should have of your note and mortgage. It would tell you what the percentage is that you would be charged or just call the loan co. They can tell you too.
2007-08-19 18:27:42 · answer #5 · answered by Anonymous · 0⤊ 2⤋
No one will have this answer. It depends on the terms of your contract. Prepayment penalties and recapture fees vary by lender and contract. YOu may not have a pre-payment penalty at all, check your contract.
2007-08-19 21:13:34 · answer #6 · answered by godged 7 · 0⤊ 0⤋
I would think it would depend on your agreement with the bank that you made when you first got the mortgage.
2007-08-20 09:09:56 · answer #7 · answered by Elaine T 2 · 0⤊ 0⤋
Most loans don't have a prepayment penalty. But double check your paperwork just to make sure.
2007-08-19 18:29:30 · answer #8 · answered by Michael C 5 · 0⤊ 2⤋
read your contract. it will say on there. in most cases though there is no penalty if you pay your mortgage off early.
2007-08-19 18:28:47 · answer #9 · answered by george 2 6 · 0⤊ 2⤋