A quick question. I have my Truth in Lending Disclosure from a mortgage I have been approved for. It says, "If you pay off early, you will not be entitled to a refund of part of the finance charge." So can anyone tell me what that means to me? Thanks!
SOUNDS LIKE A "PRE-PAYMENT" PENALTY... I have one...but it is ONE MONTHS INTEREST...because you pay INTEREST IN ARREARS...APRIL'S PAYMENT IS FOR MARCH INTEREST...
Stymied Mortgages generally are simple interest loans. That means that you only pay interest on the unpaid principle. When you pay a mortgage early, there is no refund of the finance charge because you don't prepay interest the way you do with other types of loans. In addition, there are certain fees that you pay that are considered as finance charges. No portion of these fees will be refunded to you. Your TIL should also say that if you pay your mortgae early you will not have to pay a penalty. If it says that you may have to pay a penalty, then there is a prepayment penalty. fla-tan
