Posted on: 17th Oct, 2010 11:59 am
I recently paid off a mortgage that had a five year pre-payment penalty. The note was originally signed September 23, 2005 and paid off September 3, 2010. Would this pay-off not have been in the sixty-first month and therefore outside of the penalty range in that month increments are the measure rather than to the actual day of signing? The bank kept $5,000 as the penalty for the pay-off even though they had forced the house into foreclosure status and demanded payment or the house proceeds at sheriff's sale.
Hi goIROC,
The 5 year pre-payment penalty clause will end on the day when your mortgage completes the 5 year time period. If the loan was paid off before that time period, then the lender has the rights to ask you for pre-payment penalty.
The 5 year pre-payment penalty clause will end on the day when your mortgage completes the 5 year time period. If the loan was paid off before that time period, then the lender has the rights to ask you for pre-payment penalty.
Answer not addressing question asked as to time increments.
"Would this pay-off not have been in the sixty-first month and therefore outside of the penalty range in that month increments are the measure rather than to the actual day of signing?" This query is not clear to me. Can you explain your query in details so that members participating here can understand and give you their suggestions?