Finance
What is 'prepayment penalty' in a Delaware mortgage, and are they permitted?
AA fee for paying off the loan before the term ends; prohibited on all Delaware mortgages
BA fee some lenders charge for paying off a mortgage early; allowed in some loan types but restricted or prohibited in FHA, VA, and Qualified Mortgage (QM) loans✓ Correct
CA mandatory fee for any early payment; allowed by Delaware law on all mortgages
DA fee paid to lock in the interest rate; always permitted
Explanation
Prepayment penalties are fees charged for paying off a mortgage before the scheduled end. FHA, VA, and most QM (Qualified Mortgage) loans prohibit or restrict prepayment penalties. Conventional non-QM loans may include them.
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