Is there a penalty if one pays off the loan before the end of the term?

Asked by Trulia Chicago, Chicago, IL Thu Feb 28, 2013

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Riccardo War…, Agent, Bolingbrook, IL
Fri Mar 1, 2013
Generally, there aren't many loans that have a pre payment penalty anymore. Very Rare. If loan is sold to Fannie or Freddie (in Illinois anyway), there cannot be a PPP on a conforming residential loan.

Sean Cochran
Quality Mortgage Lending
630-470-6830 office
630-330-2229 cell
1 vote
Sam Sharp, Mortgage Broker Or Lender, Chicago, IL
Thu Feb 28, 2013
This will depend on the loan - check your closing package from your most recently closed transaction and look for a pre payment rider - you should also call the current service provider and ask if they show a pre payment penalty.
Sam Sharp
Senior VP of Mortgage Lending
Guaranteed Rate
773 290 0455
0 votes
Maria Cipoll…, Agent, Coral Springs, FL
Thu Feb 28, 2013
Normally, there is not penalty. But, it is crucial that you review your mortgage documents before you decided to pay off your loan.

Best of Luck,

Maria Cipollone

Century 21 Tenace
0 votes
Robert Adams, Agent, Henderson, NV
Thu Feb 28, 2013
Some loans have prepayment penalties and some don't. You should be able to find out by reading your loan docs from when you purchased the property.

Best Regards,
Robert Adams
The Adams Team at
Rothwell Gornt Companies
0 votes
Manuel Brown, Agent, Chicago, IL
Thu Feb 28, 2013
Trulia Chicago,

Each loan has its own verbiage to whether or not the loan has a penalty for early payoffs before the tem of the loan. It is important the borrower understand what all the terms are for the load he or she is taking especially if the borrower has an inkling they will pay off the loan early.
0 votes
Jose Hernand…, Agent, Chicago, IL
Thu Feb 28, 2013
Check your mortgage documents, some have a pre-payment penalty.
0 votes
Matt Laricy, Agent, Chicago, IL
Thu Feb 28, 2013
A lot of banks have a pre payment penalty.
0 votes
Bill J Delig…, Agent, Naperville, IL
Thu Feb 28, 2013
As long as you do not have a pre-payment penalty, you can pay off the loan whenever you want.
0 votes
Christopher…, Mortgage Broker Or Lender, Chicago, IL
Thu Feb 28, 2013
It depends on your loan type. Most loans done today do not have a prepayment penalty. But, there were products that do carry prepayment penalties. Even if you do have a prepayment penalty, it usually phases out after 3-5 years. Hope this helps.
0 votes
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