prepayment penalty

[AD98501]

What is the name of your state?WASHINGTON
IS THERE A LIMIT OR STATE LAW FOR THE MAX A LENDER CAN CHARGE FOR PREPAYMENT PENALTY?

[Samm1970]

Yes. Each state has their own rules.

[AD98501]

Do You Know Limit In Washington State?

[Samm1970]

An amount equal to the payment of 6 months advance interest, at the interest rate provided under the note, on the amount prepaid which is in excess of twenty percent (20%) of the original principle balance.

Example: Loan = $100,000, rate = 6%. Amount in excess of 20% is $80,000. So the amonut of the prepayment penalty is $2,400.00 ($80,000 X 6% / 12 X 6 = $2,400.00.

I think this would be the calculation.

[AD98501]

Thanks For The Response. Let Me Fill You In On My Issue.
I Sighned A Loan At 360k. My Broker Told Me It Is Prepay Penalty Only If Refi Not If I Sold. (of Course Nowhere On The Paperwork Did It Say That) Only 5% Penalty If Prepaid Within 36 Months. My Loan Is An Interest Only Payment At 5.75% So A Year Later I Still Owe 360k But Now With An 18k Prepay Penalty. I Spoke With My Old Broker That Did This Loan And He Said He Remembers Our Discussion And Now He Finds Out With The Lender That In Order To Have The No Prepay On A Sell We Needed To Pay A Small Fee In The Beginning Of The Loan Called A 'soft Prepay'. Of Course He No Longer Works For The Mortgage Company And Has Offered To "let His Father In Law List My House And Pay Me Back All His Commission When My Home Sells". What Recourse Do I Have? And With Whom?