Posted on: 11th Aug, 2010 12:23 pm
Terms of my proposed mortgage are a 7 year balloon with a 2 year prepay at 2%. I understand the balloon (83 payments with a large 84th payment) but what exactly does the rest of it mean? I think it means if I prepay the mortgage within the first 2 years, I'll pay a 2% fee on the balance. But not totally sure... Thanks in advance!
The prepayment disclosure should be in your Preliminary docs. I believe it's if you pay off the loan in full you will have to pay a 2% fee. Your LO should provide you with all the info regarding that prepayment penalty.