Finance
A 'prepayment penalty' in a Connecticut mortgage loan penalizes the borrower for:
AMaking payments later than the due date
BPaying off the loan balance early or making extra principal payments✓ Correct
CFailing to maintain homeowners insurance
DRequesting a loan modification
Explanation
A prepayment penalty is a fee charged to borrowers who pay off their mortgage balance early, as this reduces the lender's anticipated interest income. Many modern loans do not include prepayment penalties.
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