Pre-Payment Penalty (PPP)

A pre-payment penalty is a fee charged for paying off the balance of your mortgage before a specified time; it can be either a soft or hard penalty.  With a soft pre-payment penalty you can sell the property to a non-relative and not have to pay the penalty.  However, if you pay-down more than 20% of the outstanding principal balance before the specified period has expired, you will have to pay the penalty.  With a hard pre-payment penalty, you have to pay the pre-payment penalty whether you sell the home or pay-down the principal.

Direct Mortgage’s property loans DO NOT currently carry a pre-payment penalty.

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