Finance
In Minnesota, a prepayment penalty on a mortgage allows the lender to charge a fee if the borrower:
AMakes payments after the due date
BPays off the loan early or makes extra principal payments above specified limits✓ Correct
CRefinances more than three years after origination
DSells the property within the first year
Explanation
A prepayment penalty allows the lender to charge a fee when the borrower pays off the loan early or makes large extra principal payments. Qualified Mortgages (QMs) under Dodd-Frank generally cannot have prepayment penalties after the first three years. Many Minnesota borrowers avoid loans with prepayment penalties.
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