What is a prepayment penalty and should I have one?
A prepayment penalty allows the lender to charge the borrower a fee if they close their loan within a certain period, usually the first five years of the loan. This fee is usually equal to about six months worth of interest payments on a loan. In some cases you may be able to get a lower rate if the lender includes a prepayment penalty, but it is usually better to try and avoid it.
A prepayment penalty allows the lender to charge the borrower a fee if they close their low within a certain period, usually the first five years of the loan. This fee is usually equal to about six months worth of interest payments on a loan. In some cases you may be able to get a lower rate if the lender includes a prepayment penalty, but it is usually better to try and avoid it. What is the difference between pre-qualification and pre-approval? Pre-qualification is when a prospective buyer discloses, either verbally or by providing documentation of, their income, assets and credit so that a lender can determine how much a borrower will be likely to afford in loan payments. A pre-approval involves an underwriter and is a more formal review of your credit and income. A pre-qualification will commonly only provide you with an idea of what you can afford while a pre approval will actually guarantee you a loan of a certain amount. Am I required to get financing from the lender that my rea
