Mortgage Prepayment Penalties Saint Louis MO

One of the most common terms found in a new home loan is a prepayment penalty. This type of penalty says that if the borrower pays off the loan early, commonly during the first five years of the loan, then the borrower will be responsible for paying a fee.

Local Companies

Joyce Hunter, Mortgage Consultant
314-450-4016
8125 Delmar Blvd.
St. Louis, MO
Midwest Mortgage Capital
314-787-2900
1227 Fern Ridge Pkwy Ste 200
St. Louis, MO
American Home Loans
314-835-0301
10777 Sunset Office Dr
St. Louis, MO
First American Lending
314-692-0444
2388 Schuetz Rd
St Louis, MO
Amstar Mortgage
(314) 647-4747
3413 Hampton Ave
Saint Louis, MO
Gateway Capital Mortgage Corporation
(314) 772-1840
1611 S Grand Blvd
Saint Louis, MO
St Louis Financial Services
(314) 996-2600
1866 Craig Park Ct
Saint Louis, MO
Prime Resource Corp
(314) 822-8861
13610 Barrett Office Dr
Saint Louis, MO
Executive Mortgage Group
(314) 453-9500
1000 Executive Parkway Dr
Saint Louis, MO
Charter Funding
(314) 843-0400
12300 Old Tesson Rd
Saint Louis, MO

You may plan on keeping the house for the entire duration of the prepayment penalty, and be tempted not to worry about it much. But sometimes life circumstances change, so it's wise to avoid any type of prepayment penalty if you can. A typical prepayment penalty might equal five months worth of monthly loan payments, so it's worth checking on. Of course, you should always ask (before you sign) if a new loan has a prepayment penalty. In fact, ask the lending officer to point out to you in the document where a prepayment penalty is discussed.

Most items in a loan are subject to negotiation. If you haven't signed loan papers yet, and you find that your loan has a prepayment penalty, you might offer to pay an additional closing point or so to see if it can be removed. The key at this stage is that if you agree to the prepayment penalty, you should try to find ways to reduce either the amount, the term, or both as much as possible.

If you already have a loan, you are bound by the terms of the document, unless you can negotiate them. There are perfectly legitimate reasons why you may want to pay off a note early - most often, due either to refinancing or selling the house. You may be able to contact your lender to see if they will waive the prepayment penalty if they are able to provide refinancing. If interest rates have dropped a lot, and you can't get out of the prepayment penalty, it may be worth rolling that amount into a new loan. And of course, try to get the new loan without a prepayment penalty.

About the Author:

Jakob Jelling is the founder of http://www.cashbazar.com. Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.


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Featured Local Company

Joyce Hunter, Mortgage Consultant

314-450-4016
8125 Delmar Blvd.
St. Louis, MO
www.FastMortgageLoanApprovals.com