Prepayment Penalty
15 definitions

Prepayment Penalty

With respect to any Mortgage Loan, a fee, equal to a specified percentage of the principal amount of the Mortgage Loan, that is required by the terms of the Mortgage Loan to be paid in connection with voluntary and certain involuntary prepayments.

Prepayment Penalty

A penalty imposed on a borrower for repaying the loan before its due date. (In the case of a mortgage, this applies when there is not a prepayment clause in the mortgage note to offset the penalty.)

Prepayment Penalty

A fee that a borrower may be required to pay to the lender, in the early years of a mortgage loan, for repaying the loan in full or pre- paying a substantial amount to reduce the unpaid principle balance.

Prepayment Penalty

A provision in some loans that charge a fee to a borrower who pays off a loan before it is due.

Prepayment Penalty

A fee charged to a homeowner who pays one or more monthly payments before the due date. It can also apply to principal reduction payments.

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About this term

Prepayment Penalty has been defined 15 different ways in documents like Base Offering Circular 2004, Dictionary of Banking Terms and Phrases, Real Estate Glossary, and 2 more.

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