Prepayment Restrictions

[angelamontford]

What is the name of your state? Florida

Are there any restrictions on applying prepayment penalties to a mortgage loan by a mortgage lender. Specifially is their a limit on the time frame for which you can impose the penalty, such as with three years, life of loan, etc... High Cost loans have some restrictions, but does this apply to all lons?

[Samm1970]

Yes. Because of the anti-predatory lending legislation most if not all states have restrictions on prepayment penalties, the amount and the duration. Most "A paper" loans do not have prepayment penalties. If you need something special due to bad credit, short time employed, no income, no asset verification that sort of thing, you'll typically have prepayment penalties. If your credit is good & you have a good down payment (5% or more) you should not be paying a prepayment penalty in most cases.