No Pre-Payment Penalty

As the economy rebounds the household income in Oregon is increasing allowing borrowers to take advantage the no fee prepayment aspect of every VA Loan. A VA Loan with no prepayment penalty offers borrowers the ability to pay off the remainder of their loan, pay more towards their loan each month, or refinance their home without fear of incurring prepayment penalties which can cost borrowers thousands of dollars.


Just as an example if you had a 30 year mortgage for $200,000 with an interest rate of 3.125% your monthly payment would be around $857. If you were to pay $50 more a month for the lifetime of the loan you would pay off your loan 2 years and 7 months early saving approximately $10,600 in interest. I don’t recommend this as the most effective way to negotiate a loan and the numbers will differ with each individual mortgage, however, it does illustrate how beneficial paying off your loan ahead of schedule can be.


Prepayment Penalty Mortgages or PPMs will contain a clause requiring a fee that a borrower must pay if a loan is paid off early. Not all home loans are Prepayment Penalty Mortgages, however, Oregon mortgage Lenders are required by law to make borrowers aware if there is a fee involved. If you are looking around for different lending options make sure you’re covered and ask about a prepayment penalty clause in your loan agreement. Interest rates are constantly shifting and the chance to refinance your home without incurring prepayment fees is one of the many perks that a VA loan offers.
If you have any questions about VA Loans, or how a free prepayment loan might benefit you in the long run please feel free to give me a call.


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