FinanceQuestion 80 of 100
A prepayment penalty in a mortgage is a charge for:
a.Refinancing with a new appraisal
b.Making a late payment
c.Requesting an escrow analysis
d.Paying the loan off early
Explanation
A prepayment penalty is a fee some loans impose when a borrower pays off all or part of the loan ahead of schedule, compensating the lender for lost interest. Not all loans have them, and some are restricted by law. Borrowers should check whether their loan includes one.
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