Will there always be a penalty for paying off a mortgage early?

Asked by Trulia Naples, Naples, FL Thu May 9, 2013

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Kathy Bogan…, , Naples, FL
Mon Jun 24, 2013
See my May answer to your question....KathyBC ...(6/24)
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Agnes Tabor, Agent, Naples, FL
Mon May 20, 2013

Every lender has different criteria loaded into their documents. It is important that you ALWAYS do your due diligence in every phase of the transaction whether a buyer or seller. I am a pro-active buyers agent who works at bringing information to my customers/clients early on. What I can say from my personal experience as a Florida Licensed Real Estate Professional, is that in the last 10 years none of my buyers have had that penalty included with their lender.

There are three (3) people that should always be included when you are working with real estate; your Agent, Mortgage broker and Attorney. This carefully chosen winning combination is sure to get you closed on the property of choice.
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Terence Trom…, Agent, Cape Coral, FL
Mon May 13, 2013
There are literally hundreds and hundreds of financial products available, some with and some without prepayment penalties. Your best and smartest choice would be to speak with a financial expert.

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Beverly Howe, Agent, Naples, FL
Sun May 12, 2013
There is a very common pre-payment penalty in almost all mortgages. That pre-payment penalty is in relationship to the last mortgage payment made to the lender (mortgagee) from the borrower (mortgagor) when the loan is paid off. If the borrower makes a payment due on the first of the month that payment has pre-paid interest to the end of the month. If the borrower pays off the loan on the 15th of the month, the lender does NOT typically pro-rate the pre-paid interest to give back to the borrower when the loan if paid off.

Ever borrower should request a copy of the Truth In Lending Statement required by law to be provided to the borrower prior to closing the loan. When they get it they should READ IT, and ask the loan officer questions about anything they do not under stand.

"The most important thing a buyer can do is work with a buyer broker." As stated by AARP and the Consumer Federation of America in REALTOR News.

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Kathy Bogan…, , Naples, FL
Fri May 10, 2013
Your lender is the best source of information on this question; so many variables. However, that said most don't carry prepayment penalities now....but the age of your mortgage affect that greatly.
Kathy BC 800-448-3411 ext 601...(5/10)
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Thomas Rosen, Agent, Naples, FL
Fri May 10, 2013
No, in fact, you should never get a mortgage that requires one.
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Antonio Vega…, Agent, Saint Cloud, FL
Fri May 10, 2013
In my experience most mortgages carry no prepayment penalties. It will depend on the institution who provides it. Read the small print.
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Sarah Garrett, Agent, Fort Myers, FL
Thu May 9, 2013
No not always and in most cases hardly ever unless it is disclosed at mortgage inception and documented with the % amount of the penalty.

Sarah Garrett, Realtor
"Chosen Best in Client Satisfaction 2006-2012" by Gulfshore Life Magazine
Web Access to MLS Listings:
0 votes
Michael Sopka, Agent, Naples, FL
Thu May 9, 2013
Most of the loans don't have a prepayment penalty. There are exceptions however it would need to be disclosed. Any more questions, please contact me.
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Lori Fowler, Agent, Naples, FL
Thu May 9, 2013
Currently, it depends on the loan and it is specified in the documents that you sign at closing. It is a very important question to ask. If you are not sure, you should contact the company servicing your mortgage. It is also wise to inquire about mortgage insurance. If it was required at the time of inception of the loan, you may have been paying your mortgage long enough now to have enough equity to request that it be removed from your payment. This creates a great opportunity to continue making the same level payment while attacking more of the principle each year.
Great inquiry. There are lots of ways to save and you should work with a Realtor and mortgage broker that can equip you with the tools to get the loan to purchase the home of your dreams while saving money over the life of your mortgage.
Good luck! If you need a guide, call me!
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Peggy Wagner-…, Agent, Bonita Springs, FL
Thu May 9, 2013
Of course not. There have been mortgages available for years without a prepayment penalty. But do your homework first and find a lender who has that product available. Just ask first.
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Michel Marab…, Agent, Highland, CA
Thu May 9, 2013
No, It will have to specifically state in the loan, that there is a prepayment penalty. If it is not in there you shouldn't be charged.
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