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And the WORD for Today is:
Pre-payment Penalty – means that you must pay extra money in order to repay the loan early. If your circumstances changed or you discovered that you could have qualified for a lower interest rate or you needed to move and sell the home you would find it cost prohibitive because this penalty means you have to pay a high cost in order to repay early. The penalty might be equal to 6 months’ mortgage payments or a flat fee of several thousand dollars. This practice is now prohibited in many states and/or on what is described as high-costs loans. Until 2000 most sub-prime loans included this as another source of income for the lender with no benefit to the consumer.
Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.
You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.
(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)
Pre-payment Penalty – means that you must pay extra money in order to repay the loan early. If your circumstances changed or you discovered that you could have qualified for a lower interest rate or you needed to move and sell the home you would find it cost prohibitive because this penalty means you have to pay a high cost in order to repay early. The penalty might be equal to 6 months’ mortgage payments or a flat fee of several thousand dollars. This practice is now prohibited in many states and/or on what is described as high-costs loans. Until 2000 most sub-prime loans included this as another source of income for the lender with no benefit to the consumer.
Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.
You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.
(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)
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