Definition of "What are prepayment penalties?"

Tanya  Dorfman real estate agent

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Tanya Dorfmanelite badge icon

Coldwell Banker Residential Brokerage - Princeton Junction Office

A penalty fee charged for paying off a mortgage early, thus allowing banks to still make money off of the loan in the event that you inherit a small fortune. Most loans these days do not have prepayment penalties - and if they do, they are only applicable for the first few years of the loan.

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