Think of this normal scenario: An enthusiastic African-Western friends gets good subprime home mortgage for $150,000 which have a twelve% interest rate
The new Punishment to own Enhanced Borrowing from the bank Although not, in the event that friends attempts to re-finance, they look for the present financing boasts a substantial prepayment penalty — accumulated in order to 5% of the mortgage balance, or about $seven,500*. Your family try forced to choose from paying the penalty out of the security otherwise proceeded to spend several% attention for 2 even more many years. What is a prepayment punishment?…
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