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I am a Real Estate agent and many clients have asked me this question
and it seems as though mortgage brokers avoid it. So I thought I would try
it here.
When do mortgage brokers decide that a particular loan is deserving of
the dreaded prepayment penalty?
It seems as though there would be added incentive by the lender that
the loan will eventually be sold to to have a prepayment penalty to
assure they would receive a certain amount of interest payments. Is
that incentive offered to the person brokering the loan? Similar to
YSP?
Also, anytime any of my clients have applied for a loan and have been
told they have a pre-pay penalty, I tell them to ask the broker if
he/she will remove it and almost invariably they do. So it doesn't
seem as though the pre-pay penalty is a mandatory item. It definitely
does not benefit the consumer, it does benefit the lender. I am
assuming it must also be a benefit to the broker.
Any answers would be greatly appreciated.
John
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When are prepayment penalties added to loan contracts?
