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E-Mail 'When Is A Prepayment Penalty Worthwhile?' To A Friend

by Peter G. Miller
October 17th, 2007

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This entry was posted on Wednesday, October 17th, 2007 at 12:46 pm and is filed under , . You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

2 Responses to “When Is A Prepayment Penalty Worthwhile?”

  1. Chad Rupert Says:

    Hello,
    I have a question regarding prepayment penalties on a mortgage loan within my state of Pennsylvania! My wife and I have a sub-prime loan. This first lender is now out of business! When we got this loan, we were told we wouldn’t be able to get a loan ANYWHERE else for less than they were offering! I had a fixed rate before this at 5.75% and we ended up getting an ARM with a 7.9% interest rate for 3 years. Our adjustable rate period ends in February, 2009! My BIG question is we wanted a fixed rate loan and they couldn’t give us that! Instead we have an ARM with a prepayment penalty equal to 6 months interest! Is this illegal in the state of Pennsylvania to charge a prepayment penalty if we find a mortgage company thats willing to give us a FIXED rate! Our monthly payment is KILLING us! I heard that companies in your state can’t charge you interest BUT companies whose headquarters are in another state could charge you the penalty? I’m just confused with all the technical mortgage jargon! If you could provide me with ANY information, it would be greatly appreciated! I’m astonished with the amount of forclosures happening and the financial companies writing off BILLIONS due to this SUB-PRIME mess! The last thing my family wants to do is be forced to sell our home or worse forclose because we can’y afford to pay! Thanks for your time!!

  2. Kevin Fisher Says:

    Great post, thank you for the insight.

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