Finance
What is 'prepayment penalty' in a mortgage and is it common in Idaho today?
AA fee charged for paying off a mortgage early; it was common historically but is prohibited or rare in most modern residential mortgages✓ Correct
BA penalty for making late payments
CA fee for paying an extra monthly payment
DA charge for pre-paying insurance premiums
Explanation
A prepayment penalty was historically common but is now prohibited or rare in most modern residential mortgages due to CFPB regulations (Qualified Mortgage rules). Dodd-Frank Act restrictions limit prepayment penalties on residential loans.
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