Definition Of Prepayment Penalty

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Prepayment Penalty Definition – A prepayment penalty is a mortgage provision that states that a penalty, or fee, will be assessed to a borrower if an outstanding liability is paid off before a certain time period. lenders typically calculate these fees as a percentage of the outstanding loan balance, the cost of lost interest payments, or as.

A prepayment penalty is a fee that some lenders charge if you pay off all or part of your mortgage early. If you have a prepayment penalty, you would have agreed to this when you closed on your home. Not all mortgages have a prepayment penalty.

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Prepayment Penalty. A charge imposed by the lender if the borrower pays off the loan early. The charge is usually expressed as a percent of the loan balance at the time of prepayment or a specified number of months’ interest. Some part of the balance, usually 20%, can be prepaid without penalty.

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Prepayment is the early repayment of a loan by a borrower, in part or in full, often as a result of optional refinancing to take advantage of lower interest rates.

Contents Find 12 meanings Word prepayment penalty Mortgage contract stating Mortgage risks wrap Represent tremendous risk carefully drafted. read What does PREPAYMENT PENALTY mean? Here you find 12 meanings of the word prepayment penalty. You can also add a definition of Most lenders allow you to prepay the outstanding balance of a loan at any.

Prepayment penalty is a charge assessed against a borrower who elects to pay off a loan before it is due. It is a fee that a lender may assess if a borrower repays a loan before the scheduled maturity.

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Prepayment penalty : read the definition of Prepayment penalty and 8,000+ other financial and investing terms in the NASDAQ.com Financial Glossary.