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Prepayment Penalty Definition

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A prepayment penalty is a fee that lenders charge to borrowers who pay off loans "early." Loans like auto loans and home loans are typically scheduled to last for a certain number of years ( known as the term ), with the loan balance reaching zero at the end of the term.

Prepayment penalties are not permitted for consumer mortgages of any kind, unless they meet the fixed rate qualified mortgage (qm) definition.

Prepayment Penalty. A charge imposed by the lender if the borrower pays off the loan early. The charge is usually expressed as a percent of the loan balance at the time of prepayment or a specified number of months’ interest. Some part of the balance, usually 20%, can be prepaid without penalty.

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Definition of PREPAYMENT PENALTY: A penalty imposed on the borrower for the complete settlement of the loan before the expected payoff date. It is means of compensation for the lender as The Law Dictionary Featuring Black’s law dictionary free online Legal Dictionary 2nd Ed.

Prepayment penalty : read the definition of Prepayment penalty and 8,000+ other financial and investing terms in the NASDAQ.com Financial Glossary.

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Prepayment penalties paid on early extinguishment of debt of $1.3. with the current National Association of Real Estate Investment Trusts ("NAREIT") definition (as we do), or may interpret the.

THE DEFINITION OF interest is a fee charged by a lender for. WHEN A PROPERTY owner pays the lender a "prepayment penalty" for paying off an existing loan early, the prepayment penalty qualifies as.

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A prepayment penalty clause in a mortgage contract states that a penalty will be assessed if the loan is paid down or paid off within a certain.

A prepayment penalty, also known as a "prepay" in the industry, is an agreement between a borrower and a bank or mortgage lender that regulates what the borrower is allowed to pay off and when. Most mortgage lenders allow borrowers to pay off up to 20 percent of the loan balance each year.

prepayment penalty provision expires, or a yield maintenance. A small loan is defined as a mortgage loan for an apartment building with five.