Can I pre-pay my mortgage? That was the question a former client called to ask this week. She received a letter stating that her loan had been sold to a new company. Then a few days later she received a statement from the new lender that discusses how payments could be made, contact information etc. Buried in the documentation was a sentenance that said she could not pre-pay the mortgage.
The answer for her question was simple. The terms of the mortgage are spelled out in the note that was signed at closing. It will state the amount of the loan, the interest and the repayment options. Regardless of what the lender said in the letter, the note should be the deciding factor. This was a standard conventional Fannie Mae loan product. There is NO pre-payment penalty.
If you aren't sure about the terms or conditions regarding your repayment, it is best to go back the closing documents. You should be able to find your answer there. If not, call a trust licensed mortgage loan originator for help.