prepay: Under the Mortgage Microscope: Prepayment penalties understood.
- 02/27/07 07:12 PM
Despite consumers dislike for prepayment penalties lenders often make them a requirement of the loan. Nobody wants one; nobody likes them. So why can't we just get rid of them altogether? My rule of thumb is to generally avoid prepayment penalties when possible, but is there ever a time when it's advisable to accept a prepayment penalty? To answer this, we need to look at the big picture so that we can better understand the role of prepayment penalties in a loan. Sure, prepayment penalties exist to protect the lenders profit margin on a loan, but a closer look reveals that … (3 comments)
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Despite consumers dislike for prepayment penalties lenders often make them a requirement of the loan. Nobody wants one; nobody likes them. So why can't we just get rid of them altogether? My rule of thumb is to generally avoid prepayment penalties when possible, but is there ever a time when it's advisable to accept a prepayment penalty? 
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