Most companies charge a certain percentage of the loan, often 1 percent or 2 percent, or the equivalent of six months of interest if the mortgage is paid off early — generally within two to five years.
Local loan experts say they’ve seen prepayment penalties range from $5,000 to as high as $30,000. A prepayment penalty on a subprime loan of $400,000 at 7.99 percent would total nearly $13,000, said Jeff Underwood, a loan officer with AmeriFirst Financial in Mesa.
One step borrowers can take to avoid getting caught off guard is choosing a loan officer they trust instead of just searching for the lowest rate, Underwood said.
BINGO!
If I am your Realtor, please contact some of the lenders on my list of preferred lenders. They’ve done a good job for my clients in the past and they certainly want to do a good job for you… otherwise I’ll quit referring my clients to them.
No referral fees
People are suspicious, as well they should be. Some people have thought that I referred them to particular mortgage lenders because the lenders would pay me a referral fee or something.
Absolutely not! It’s illegal under federal law for a lender to pay a Realtor a referral fee of any kind whatsoever.
The way lenders help me is by giving my clients great service and that helps me a lot.
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