Did you use a Down Payment Assistance program when you purchased your home? Other than having to pay back the assistance, most loans do not have PPP anymore.
Marley said:
Don’t do a loan with a prepay penalty and you don’t have to worry about it. What kind of loan are you in that you have a PrePay penalty???
From my understanding, it’s law that you can’t have a prepayment penalty on a mortgage. My company has no prepayment fees, so I’ve never really had to consider it.
So you’re in the process of refinancing? And the Loan Officer said there was no prepayment penalty. He’s talking about the new loan surely.
So during the process, you got a payoff (for the current mortgage being paid off in the refinance?) and it includes a prepayment penalty? Is that accurate?
Find your Closing Disclosure from your original mortgage and look at the first page. It clearly states whether a prepayment penalty exists.
Wow! Haven’t seen a prepayment penalty on a mortgage in a really long time. Who’s the lender?
Is your loan less than 6 months old?
Did you check your original paperwork to see if you signed a prepayment penalty rider?
My suspicious mind is thinking that there may not be a specified prepayment penalty and your loan is less than 6 months old, so the original lender is trying to claw back some fees they give up if a loan isn’t kept on their books for a certain amount of time.
OR, as others have mentioned, you may have some kind of non-conventional loan. Even so, there should be a rider with your original paperwork indicating a prepayment penalty.